As some of you may recall, for the past couple months, there has been very little NOD activity in the markets I track. The NOD count for Folsom, El Dorado Hills and Auburn, has basically been halved.
Prior to today, I attributed this drop-off to the new law that became effective in California, SB1137. But, best I can tell, that law only added 45 days to the process. Thus we would have expected a pick up in NOD activity around late-October, as lenders complied with the law that became effective Sept, 8, 2008.
But here is where my conspiracy minded brain starts to ruminate. It wasn't till this week, 75 days, after SB1137 went into effect, that I began to see a pick up in NOD activity. Hmm, perhaps these lenders were holding their breath, waiting for the government to relieve them of these troubled assets.
When Paulson announced that the TARP funds were no longer going to be used to purchase mortgage-assets, they went back to business as usual. This idea came to mind, primarily because I had heard rumors in the blogosphere that Countrywide was not foreclosing or sending NODs while it was in the process of being bought by BofA. No idea if any of this is true or even possible, but it does seem like a plausible explanation given the timing.
Coincidence or conspiracy......thoughts?
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So does anyone know what has happened to Housing Tracker? It was one of my favorite sites for historical context and housing statistics.
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I observed the same drop in NOD and NTS in Cameron Park, and the same pickup in activity about one week ago. I can't say its a conspiracy, but I think lenders made a knowing decision to hold off. I am guessing we will see a lot of action between now and the end of January due to (a) pent up lender foreclosure activity and (b) New Year's resolution activity by lenders.
I think you might be on to something. Regarding the delaying of foreclosures at least (not sure about NODs), I'm sure you saw that the GSEs intend to delay or halt foreclosures over the holidays to allow more time for workouts.
There really is only so much you can do to help people afford a home that they cannot afford though. Delay all you want, cut rates all you want, subsidize all you want, bail all you can - affordability still is what it is.
Maybe there are actually less people not making payments. Your conspiracy theories remind me of all the justifications for the bubble prices, but in reverse.
The mortgage reset chart shows a dip toward the end of 08. I have a copy but don't know how to attach here.
Here is some anecdotal evidence. Last week I had a few beers with some friends in Folsom.
The conversation touched on the housing market and two of my friends mentioned mutual acquaintances that have stopped paying on their mortgage and have yet to receive a NOD.
There were four persons mentioned and the one with the greatest amount of time without paying and no NOD was nine months. Countrywide was the lender in three of four of the persons mentioned.
Just thought I would share. Things are not what they seem to be. Not sure of any conspiracy, probably pure cost/benefit analysis coupled with risk from the lenders side.
I wouldn't go as far as conspiracy, but I have a feeling that banks were just holding their breath waiting for fee money. Also didn't Fannie Mae just suspend foreclosures for a time?
Housing tracker is down because the NAR retooled realtor.com. Don't ask me how I know this...
The GSEs have stopped foreclosures through the New Year, so they're probably just not filing NODs until then either. They also have to decide how to handle tenants in foreclosed properties, as Dodd has been pressing on the issue, so they're taking a breather. (The GSEs now control half the mortgages in the US.
The answer no one has thought of... bank window dressing for the end of the year. When a bank files an NOD, they are admitting they will not be able to collect the full amount of the loan and have to write a % off. At 90+ days late, the write off is smaller, meaning they will show a larger asset base for their EOY balance sheet.
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