Auction Opportunities and Foreclosure Numbers

Auction investment opportunities continue to increase.
January brought an unexpected, across the board drop, in the total Notices of Default, Notices of Trustee Sale, and sales at auction, not only from the prior month, but year over year as well.

Even after accounting for the fact that January had two fewer days than December, only properties sold at auction saw a slight increase of 3.4 percent. Analyzing the data at the lender level, it appears these drops can be primarily attributed to the significant changes taking place among the country’s major lending institutions.

Wells Fargo, with its recent acquisition of Wachovia, saw a drop in Notice of Default filings of 46 percent, while JP Morgan, which acquired Washington Mutual, saw a drop of 49 percent. Bank of America, which earlier acquired Countrywide, saw a significant 281 percent increase in filings, though still below the levels Countrywide experienced in the second quarter of 2008. 

The number of properties sold to third parties at auction continues to rise – up 6.6 percent from December 2008 and more than doubling from January of last year. Lender discounts at auction statewide averaged 41.4 percent from the outstanding loan balance for January, a significant increase from the 16.1 percent average discount a year earlier.

Overall, lenders discounted their opening bid on 92 percent of properties taken to sale, making prices at auction reasonable for third party buyers.
High-level findings for January include:
-Notices of Default decreased 11.8 percent over Notices recorded for December, to a total of  36,138 default filings, a 10.6 percent decrease from January 2008. Due to the fact that January had two fewer recording days then December the average daily decrease was only 3 percent.
-The average daily volume for Notices of Trustee Sale filed from December to January decreased  8.3 percent, with a month over month total decline of 16.6 percent. The 22,328 Notice of Trustee Sale filings for January represent a 4.5 percent decrease from Notices of Trustee Sale recorded in January 2008.
-Properties taken to sale at auction decreased 6 percent from December to January; a 23.1 percent  decline from the same period last year, and a 46.8 percent decrease from peak volumes seen in July 2008. The 15,314 properties sold at auction represent $6.8 billion in loan value. Slightly more than 94 percent of these properties were sold back to the bank at auction.
Thomas Ray
Keller Williams/Marina
My Site: www.LAexclusiveProperty.com