A few days ago on our June foreclosure update post, deejayoh pondered an interesting question:
Looks like you can also view the “Discontinuation of Trustee Sale” filings. There were 342 in the same time period. I wonder how that “cure rate” has changed over time.
Since the last time we looked at King County discontinuance notices was a year ago, I thought it might be nice to have another look. So, here’s a look at the total number of foreclosure notices, trustee deeds (i.e. – the bank repossesses the house), and discontinuance notices.
In order to try to get a better look at the “cure rate,” I’ve taken the number of trustee deeds and discontinuance notices for each month and expressed it as a percentage of the number of trustee sales notices sent out four months prior. I used a four-month offset because that’s how far apart last year’s peaks are on the raw notices and deeds lines above.
The repossession rate has been fairly steadily increasing over the last three and a half years, spending most of the last six months above 40%. Meanwhile, the “cure rate” had been falling at a relatively regular pace until it hit a low of 17% in October. Since then it has rapidly risen to nearly 50%.
I’m not sure exactly what’s going on here, but this is definitely something we’ll keep our eye on.
In somewhat related news, a few people have left comments or sent me emails regarding an article that claims that banks are withholding high-end foreclosures. In a table at the end of the article, they claim that there are only 51 repossessed homes on the market in Seattle, and only 8 priced above $300,000. Putting aside for a moment the fact that $300,000 is hardly the threshold for “high end” in Seattle, the numbers they are claiming for Seattle in that table are just plain wrong.
According to a Redfin search of “MLS-listed foreclosures” (i.e. – REO / bank-owned homes on the market), there are a total of 202 REO properties currently on the MLS in Seattle proper. Of those 202 homes, 86 are priced at $300,000 or higher. If you expand the search area to all of King County, there are 798 total and 261 over $300,000.
In the six-month period between November and April, a total of 2,113 homes were transferred with trustee deeds in King County. An on-market inventory of 798 represents roughly 38% of the total number of repossessions. That seems a bit low to me, as I doubt the banks have successfully resold over 60% of the homes they have repossessed over that period. However, it doesn’t really seem to add up to the conspiracy the author of that piece seems to be describing.