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Saturday, September 01, 2012 1:51 PM


Foreclosure Stats From You Walk Away


Here are some interesting stats courtesy of Jon Maddux, CEO of You Walk Away.

State% of You Walk Away Clients With No Foreclosure NoticeAverage Months Without Foreclosure Notice
Washington79%13
Nevada79%13
Georgia75%12
Michigan73%18
Virginia72%18
Oregon69%13
Pennsylvania66%12
Hawaii60%21
California59%15
New York57%16
New Jersey53%14
Arizona52%14
Colorado52%8
Florida45%17
Ohio37%19

Says Maddux
In Florida, 45% of our clients are in pre-foreclosure status. On average, these Florida homeowners are 17 months delinquent and have yet to receive even their first formal foreclosure notice. 59% of our California clients are in pre-foreclosure status. These California borrowers are an average of 15 months delinquent and also have yet to receive their first formal foreclosure notice. Eighty-five percent of the homeowners we’re working with are in pre-foreclosure and have not made a mortgage payment for an average of 14 months.
Structural Issues

  • Kids graduating from college are deep in debt and holding off home buying, getting married, and starting families.
  • Boomers looking to retire and downsize have few candidates able and willing to buy larger homes, even with deep discounts
  • Shadow inventory and the pent-up foreclosure list are huge forces in play.

Maddux believes the data points to significant backlog, eventual foreclosure activity and a drop in value for home prices.

I think home prices are bottoming in many areas, but even if so, prices in general are not going anywhere fast because of aforementioned structural issues.

Addendum

Questions came up regarding the size of the sample.

You Walk Away has 7,000 clients.

Is that a representative enough sample?

I do not know. It is certainly not scientific sampling. However, I suspect it is at least reasonable.

From Maddux ...
Information Regarding Our Methodology:

YouWalkAway.com has worked with over 7000 clients nationwide. One part of the service includes monitoring their foreclosure and providing weekly updates and a personalized foreclosure timeline. Once enrolled, we begin by asking each client when was the date of their last mortgage payment and weekly research each client’s property to determine if a foreclosure start notice has been filed. We then continue to monitor every property and record each milestone of the foreclosure process until the home goes back to the bank or is sold in a short sale.

The data was compiled using our current client database we compiled lists of the number of active clients in every state and compared the number of borrowers who had received their foreclosure start notice and those who have defaulted, but not yet received the foreclosure start notice. This was done to see what percentage of our clients had defaulted, but were not yet in the formal foreclosure process. After realizing that the numbers were higher than expected, especially in light of recent news indicating that lenders had picked up the pace as a result of the $26 billion mortgage settlement, we decided to see how many months delinquent on average these “pre-foreclosure” borrowers were. Again, the numbers came back much higher than expected. This indicates that, while there may have been a recent uptick in foreclosure filings, lenders are still dealing with years of backlog.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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