The Foreclosure Report - 2010 Summary

The first half of 2010 saw relatively good news for most participants in the foreclosure market. Foreclosure cancellations rose as homeowners saw more short sales and loan modifications approved. Investors quickly flipped their foreclosure purchases for solid profits as buyers hurried to take advantage of tax credits. As the tax credits expired, however, the market began to slow. Foreclosure cancellations also began to drop as the government push for loan modifications waned and short sales slowed with the rest of the housing market. Finally, in the beginning of the third quarter, the robo-signing scandal led to dramatically lower foreclosure sales, including a complete halt by Bank of America for nearly two months.

Foreclosure Starts 2007-2010
For the first time since the foreclosure crisis began, Arizona, California, and Nevada saw a drop in the filing of new foreclosure actions. Oregon and Washington, however, continued to climb, but with much lower percentage increases than the prior 2 years.

State		2007	2008	2009	2010
Arizona	# Starts	45,225	109,086	145,423	119,790
	% Change	n/a	+141%	+33%	-18%
California	# Starts	280,095	442,612	504,425	338,999
	% Change	n/a	+58%	+14%	-33%
Nevada	# Starts	38,690	75,814	106,425	86,010
	% Change	n/a	+96%	+40%	-19%
Oregon	# Starts	8,176	14,371	22,302	24,574
	% Change	n/a	+76%	+55%	+10%
Washington	# Starts	14,844	27,966	36,947	42,161
	% Change	n/a	+88%	+32%	+14%

Foreclosure Starts represent: Notice of Default filings in CA, NV and OR; Notice of Trustee Sale filings in AZ and WA.

Foreclosure Sales 2007-2010
Foreclosure sales dropped in 2010 for the first time in Arizona and Nevada. California dropped for the second year in a row, while Oregon and Washington both saw increased foreclosure sales.

State		2007	2008	2009	2010
Arizona	# Sales	18,775	66,685	94,979	70,588
	% Change	n/a	+255%	+42%	-26%
California	# Sales	96,901	251,544	202,215	189,810
	% Change	n/a	+160%	-20%	-6%
Nevada	# Sales	11,242	37,637	45,420	42,828
	% Change	n/a	+235%	21%	-6%
Oregon	# Sales	1,809	6,129	12,056	16,781
	% Change	n/a	+239%	+97%	+39%
Washington	# Sales	4,724	11,810	22,699	25,920
	% Change	n/a	+150%	+92%	+14%

Foreclosure Sales is based on auction sales either back to the bank or to a 3rd party. Numbers based on auction results excpet for 2007 to 2009 for states other than CA where we counted the filing of trustees deeds.

February 2005	Fed Chairman Alan Greenspan tells the US House Financial Services Committes that: "I don't expect that we will run into anything resembling a collapsing [housing] bubble."
February 2006	Fed Chairman Ben Bernanke says, "Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise, but not at the pace that they had been rising."
May 2007	Fed Chairman Ben Bernanke says, "We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system."
July 2008	The Housing Economic Recovery Act is signed into law. Clearly too little, too late.
September 2008	Fannie Mae and Freddie Mac are put into conservatorship by the US Treasury as concerns about their ability to raise capital and debt threaten to disrupt the US housing and financial markets.
September 2008	Treasury Secretary Henry Paulson announces the Troubled Assets Relief Program (TARP). Though in the end troubled assets were largely purchased by the Fed rather than through TARP, it signaled the beginning of significant government intervention into the foreclosure market.
September 2008	CA Senate Bill 1137 goes into affect. While intended to slow foreclosures and increase loan modifications, it accomplished little more than foreclosure delays.
February 2009	The American Recovery and Reinvestment Act offers tax credit for first-time homebuyers, which is later extended to April 2010 and expanded to include repeat buyers. Like cash-for-clunkers it provides short-term stimulus to the housing market.
March 2009	Obama Administration announces "Making Home Affordable" loan modification program (HAMP), creating the most exotic mortgage ever offered, and lawmakers request a voluntary foreclosure moratorium pending implementation.
April 2009	Financial Accounting Standards Board approves mark-to-model for mortgage-backed securities creating incentives for lenders to sit on bad loans rather than foreclose or approve short sales or loan modifications.
May 2009	The "Helping Families Save Their Homes Act of 2009" provides renters impacted by foreclosure with additional protections.
December 2009	Nationwide campaign to push the The Home Affordable Modification Program (HAMP) continues an artificial delay of foreclosures, but ultimately helps only a few.
April 2010	Home Affordable Foreclosure Alternatives (HAFA) promotes short sales and deeds-in-lieu of foreclosure, but has little impact beyond delaying the inevitable.
October 2010	Robo-signing scandal over documentation issues in judicial foreclosure filings leads to nationwide delays in foreclosure sales.