Foreclosure starts continue to fall in Nevada, the West
Foreclosure starts continued to decline in Nevada and other Western states in April, offsetting small gains in new foreclosure filings from the previous month, ForeclosureRadar.com listing service reported Tuesday.
In Clark County, notice of default filings - the initial step in the foreclosure process - fell nearly 30 percent in April to 962, foreclosure sales declined 21.9 percent to 400, and time to foreclose increased 6.7 percent to 431 days.
In California, default filings are down 69.8 percent from the peak in March 2009, and down 15.8 percent from April 2011.
Foreclosure sales also declined. However, investors purchased a record percentage of the limited inventory that was actually sold. Nevada investors purchased 50.7 percent of foreclosure sales, followed by Arizona with 44.6 percent and California at 41.3 percent.
The low number of sales, combined with record purchases on the courthouse steps, left very little to become bank-owned, or real estate-owned. This further depletes the inventory as REO sales continue to outpace the addition of new inventory, said Sean O'Toole, chief executive officer of Discovery Bay, Calif.-based ForeclosureRadar.
Despite investors purchasing a higher percentage of foreclosure sales, margins have rapidly declined in recent months, he said. In both Arizona and Nevada, winning bids on the courthouse steps on average equal the current estimated value of those properties.
This leaves investors who intend to resell their purchases with record low profits after eviction, repairs and closing costs.
"Foreclosure declines would be wonderful news if they were being driven by a true market recovery in which hundreds of thousands were no longer unable to make payments, and millions were no longer upside down," O'Toole said. "That is not the reality today. Instead we are seeing unprecedented government intervention into the foreclosure process leaving underwater homeowners in limbo, while stealing opportunity from investors and first-time buyers."
California has pending legislation similar to the robo-signing law enacted in Nevada, which will almost certainly bring foreclosure activity to a near halt there if passed, O'Toole said.
"The reality is that these laws don't solve anything as they fail to address the real problem - negative equity," he said. "Instead they punish real estate professionals, homebuyers and investors far more than the banks they were aimed at."
In Clark County, notice of default filings - the initial step in the foreclosure process - fell nearly 30 percent in April to 962, foreclosure sales declined 21.9 percent to 400, and time to foreclose increased 6.7 percent to 431 days.
In California, default filings are down 69.8 percent from the peak in March 2009, and down 15.8 percent from April 2011.
Foreclosure sales also declined. However, investors purchased a record percentage of the limited inventory that was actually sold. Nevada investors purchased 50.7 percent of foreclosure sales, followed by Arizona with 44.6 percent and California at 41.3 percent.
The low number of sales, combined with record purchases on the courthouse steps, left very little to become bank-owned, or real estate-owned. This further depletes the inventory as REO sales continue to outpace the addition of new inventory, said Sean O'Toole, chief executive officer of Discovery Bay, Calif.-based ForeclosureRadar.
Despite investors purchasing a higher percentage of foreclosure sales, margins have rapidly declined in recent months, he said. In both Arizona and Nevada, winning bids on the courthouse steps on average equal the current estimated value of those properties.
This leaves investors who intend to resell their purchases with record low profits after eviction, repairs and closing costs.
"Foreclosure declines would be wonderful news if they were being driven by a true market recovery in which hundreds of thousands were no longer unable to make payments, and millions were no longer upside down," O'Toole said. "That is not the reality today. Instead we are seeing unprecedented government intervention into the foreclosure process leaving underwater homeowners in limbo, while stealing opportunity from investors and first-time buyers."
California has pending legislation similar to the robo-signing law enacted in Nevada, which will almost certainly bring foreclosure activity to a near halt there if passed, O'Toole said.
"The reality is that these laws don't solve anything as they fail to address the real problem - negative equity," he said. "Instead they punish real estate professionals, homebuyers and investors far more than the banks they were aimed at."
