I’m wondering if there is a way to measure distress accurately? My neighbor defaulted on a $500K loan 1 1/2 years ago. The first auction was stalled because of the moratorium. The most recent auction never happened, apparently because the bank doesn’t want to take it on the books.. I’m curious to see if the neighbor gets a full 2 years of free rent before the bank lightens up on the “extend and pretend” games..

I’ve never really understood banks and their foreclosure processes. Sometimes they are fast an inflexible when they don’t have much at risk at all, and sometimes they’re slow. One thing you might want to check though is whether your neighbor filed a bankruptcy case. If there’s a significant delay in a foreclosure, past 4 months from the original foreclosure date, often it would be due to a bankruptcy.

My neighbor on the other side defaulted on a $600K loan. His auction date came and went last summer. He’s still living there rent free with no word from the bank.

Are any distressed homes actually foreclosing? It makes me wonder if the banks are even sending out NTS’s anymore?

That being said, the Seattle area doesn’t have anywhere near the number of risky loans as the most bubbled up states, so I don’t expect things to get as bad here as elsewhere.

Tim has documented about 600 foreclosures per month in King County, but its dumb to compare that to all homes in King County. Using the 13,388 homes for sale in King County from Windmere:

http://eastsiderealestatebuzz.com/2009/10/01/in-king-county-less-homes-condos-is-more/

I’d use the fact that of the King County Homes for sale, 4.5% (600/13,388) of that quantity are numbered foreclosed homes as of Q3 2009.

Now that sounds much more horrifying (like 1 in 20), let’s be honest and pragmatic.

http://www.calculatedriskblog.com/2009/11/unsolicited-principal-reduction-offer.html

Two things we have NOT seen here at 500.

a) Principle reduction (Mtg Cramdown-if anyone has gotten this please advise) because in the end this is all that will work anyway. People must move. We are a mobile society and it will either be a short sale or foreclosure at some point this decade.

b) A Loan mod with a Cash out option……HAAA…You never know……..

I think many of them were biting off exactly how much the could chew, but any change could sink them.

I am personally aware of a SFD which sold to the bank on Friday Sept 25 in Pierce Co. Yet, the public record still shows the private owner of record.

When I contacted the Trustee to inquire about whether the sale had in fact occurred as I thought or perhaps it had been Postponed, his response about the delay in transferring title at the Auditors office was “ummm yes, that is up to the investor” (BOA).

I have observed that other Trustee sales appear on the public record rapidly. I wonder what the effect is on the statistics when lenders decline to record the Deed.