California Forclosure Market - Update & Opportunities by Sean O\'Toole

1. CA Foreclosure Market
Update & Opportunities
Sean O’Toole
Founder/CEO
ForeclosureRadar.com
May 12, 2011
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2. Market Update & Opportunities
• The Foreclosure Funnel
• Have we turned the corner?
• What to expect ahead
• Opportunities
• ForeclosureRadar
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3. The CA Foreclosure Funnel
• 8.6 Million Homes
• 6.8 Million Mortgages
• 2.2 Million Underwater
• 650 Thousand Delinquent
• 230 Thousand in Foreclosure
• 113 Thousand Bank Owned
• 20 Thousand Distressed Sales
Sources: ForeclosureRadar, CoreLogic, LPS, DataQuick
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4. The CA Foreclosure Funnel
• 8.6 Million Homes
• 6.8 Million Mortgages
• 2.2 Million Underwater
• 650 Thousand Delinquent
1 Million / 20 Thousand
• 230 Thousand in Foreclosure
= 50 Months
• 113 Thousand Bank Owned
• 20 Thousand Distressed Sales
Sources: ForeclosureRadar, CoreLogic, LPS, DataQuick
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5. The CA Foreclosure Funnel
Primarily Single Family Residential
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6. Have we turned the corner?
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7. Have we turned the corner?
Starts
Sales
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8. Have we turned the corner?
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- FHA Premium Increases
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- Pressure on Down Payments
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- Demand pulled forward last year
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- Unemployment remains high
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9. Have we turned the corner?
Yes or No?
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10. Foreclosure Intervention
Everything Changed September 2008
• Mark-to-Model
• FDIC Crippled
• Servicer & Investor Interests Not Aligned
• Fed rescues home lending !"#$%&'(&)*+,-$*./+,.&0,1*+,&2&(3,+&4,56,78,+9&:;;<&
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11. Foreclosure Intervention
Time to Foreclose Still Rising!
Over 2500
Countrywide
loans with NOD
from 2008 going
to auction now
Average Days Delinquent 398
Average Days to Foreclose 312
----------------------------------------------
Total -- Nearly 2 years!!!! 710
and still rising
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12. Where are we headed?
• While increases are possible we won’t see “wave” of
REO’s or short sales - though we certainly should
• Foreclosure & shadow inventory “problem” will
continue for years... we’ll muddle through as banks
trickle inventory out
• Greatest weakness likely in higher priced homes and
areas
• Primary risk to home values in CA is further tightening
of lending standards NOT foreclosures
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13. Where are we headed?
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14. Where are we headed?
• The borrower’s income, employment and
credit determine risk of default
• But area incomes, economic outlook and
direction of lending standards determine
risk of loss
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15. Where are we headed?
• Leaders will have to choose:
–Maintain Home Values
–Let Markets Correct & Take Losses
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16. Opportunities - Trustee Sale Buyers
Investors Spending ~$900M / month
Average Hold Time 156 Days
Roughly $4.1 Billion Invested Now
$$$
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17. Opportunities - Trustee Sale Buyers
Majority still go
back to the bank
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18. Opportunities - Trustee Sale Buyers
• Finding Buyers:
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19. Opportunities - Trustee Sale Buyers
• Majority of auction investors flip
• Margins are getting thin for investors
–Idea: Help real estate brokers buy listings
• Lobby to improve trustee sale process &
increase opportunity
–Idea: Require early opening bids
–Idea: Require smaller upfront payment
Arizona requires opening bids to be posted 1 day prior to
auction, and buying only requires $10k deposit
Result: More investor purchases!
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20. Introduction to ForeclosureRadar®
• MLS like system for Foreclosures
• Tracks every Foreclosure in California
–Public Record Notices
• Notice of Default and Notice of Trustee Sale
–Daily Auction Results
• Current status on each foreclosure
• Includes new REO’s weeks before other services
• Deep search capabilities
• Tracking and analysis built-in
• Lead generation & Marketing for Realtors

21. How to Get Started
FREE 3 Day Trial
$49.95/Mo.
Visit: www.ForeclosureRadar.com
or email: support@foreclosureradar.com
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