Where did all the foreclosures go?


Every day I get a call or email from an agent somwhere in the country wondering why the banks are holding their REO off the market.

Apparently they haven’t been paying attention to what’s going on, that the marketplace is finally recovering.  That the banks are smarter than they used to be.  That loss mitigation efforts further upstream are working.  That short sale volumes are increasing, modifications are sticking, and prices are on the rise.

Heck, banks are even determining the highest price they can bid at foreclosure auction to not be the winner, in hopes of an investor taking control of a property before it ever has to hit the books.

And that’s if they decide to foreclose at all; we’re seeing some banks opting to forgo the effort altogether on low-valued properties and just release the lien from the collateral…and then pursue the defualted borrower now or at some point down the road.

In any event, I urge agents to get used to it.  The new normal means that banks and servicers have a shiny new toolbox to help prevent the kind of mess we’ve witnessed over the last 6 or 7 years.

It couldn’t last forever.  Apparently it hasn’t.  And isn’t that a good thing?