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Foreclosures.  We have a love hate relationship with them.  We generally love the rock bottom prices that they command, but that often comes along with a 15 page bank addendum offering the bank the right to harvest your organs for use by the CEO’s of the banks.

You’ve all heard of MERS, the Mortgage Electronic Registration System.  This is the system that banks used to funnel and split up mortgage notes to investors without recording the change with the counties.  Why should you care?  Well, beside the serious legal ramifications, you should care if you plan to buy or sell in the next 5 years because of distressed inventory.

Last year, 2010, 48% of the notice of defaults served in Salem proper were by MERS.  48%. So far this year, only 6%.   On March 5th of this year, it was reported that MERS foreclosure filings were stopped while the legalities were worked out.  What this means is that we would automatically see a drop in notice of defaults as MERS holdings aren’t going to be filed.  It looks like distressed inventory is going down, but in reality it was just pushed forward into the future a bit.  In the first quarter of this year, 297 NOD’s were filed for Salem homes.  If they were on pace for the same percentage as last year, that number should be around 421 with the missing MERS filings.  While this would still be down from the peaks of 2009, we don’t have a really good gauge on what that inventory is doing and how long it will take to hit the market.  

With the legal issues surrounding MERS ability to serve foreclosure notices, that leaves transferring the title with the seller at the helm.  It seems to me that the only “easy” way for MERS to handle their legal debacle is to get the sellers to sell or legally transfer them the property with a deed-in-lieu of foreclosure.  I have noticed that banks are really interested in the deed-in-lieu’s these days, as I would expect that it corrects for the legal issues that they created with MERS. I can also say that the banks responsiveness on short sales has improved significantly.

The take away from my ramblings here?  Bargain hunters don’t worry.  The market isn’t going anywhere fast and this may have pushed out those offerings that might have hit the market this year, into next year.  This is good news for people that sold short due to a job loss or some other hardship.  When you are eligible to buy again in a couple of years, there should still be some bargains out there in the distressed property market.   Sellers?  Still don’t have good news for you.

If you are thinking of buying a foreclosed home in Salem, watch the slide show below for a sample of the current inventory. You can sign up to get all the foreclosures emailed to your inbox as they hit the market.

Foreclosures going up.  Foreclosures going down. What to believe?

My advice?  Don’t read the national media stuff regarding foreclosures.  What matters is what is happening here locally in Salem Oregon.  So, what’s happening?

Salem Oregon Foreclosures

In 2010, the amount of notice of defaults filed with the county clerk’s office dropped by 8.7% over 2009.  While, they are still running about 4 times normal, ANY kind of decline is a good thing in this particular market sector.

The 4th quarter foreclosures dropped to 313 which is down from 4th quarter 09 by 38.5%.  There was a two week moratorium on filings by Fannie and Freddie for the holidays, but that wouldn’t have a huge impact on these numbers.

So, despite what you might have read regarding foreclosures, at least in Salem Oregon our numbers in 2010 were better than 2009.    It will still take several years ahead of us to work through all of this inventory, but at least we can say we are heading in the right direction.

Sometimes I think I should just write “same ol’ same ol’” hit publish and be done with my blog for that day.  There’s only so many ways you can say “market is still out of whack and it will be for a while.”

I’ve been distracted with other things lately which will make blog fodder, I’m sure, at some point in the future, but I did want to chat about the present just briefly.  It seems like with our recent elections the angst of Oregonians is really apparent due to the closeness of the governor’s race.    Unemployment is high, those who are employed may be underemployed or had pay cuts, and housing, of course, is still in turmoil.

Enter foreclosures…

Foreclosure notices in Salem Oregon

I had been really excited about the drop in the number of homes served with foreclosure notices in Salem Oregon.  We had two quarters of pretty substantial drops in notices served and this past quarter had a bump up of 6.5%.  Keep in mind that this bump is still down 22.8% from the worst quarter so that is still a good thing.

The closing of one of the prison’s doesn’t help the local job situation, but the Home Depot distribution center is getting ready to hire. I think we are going to be in a job gained, job lost situation for a while, which means our unemployment numbers are probably going to hang up high for a while.  Obviously the higher the unemployment numbers the worse our foreclosures will look.

I don’t think we will spike back up to those 500 notices of default kind of quarters, but we still have a few years ahead of us in working all of these homes through the system.  As of the minute I typed this post, (that’s how totally up to date I am), 14.2% of homes sold to date in Salem Oregon were foreclosures or short sales.  For all the home buyers out there that think that every seller is in foreclosure, only 14.2% of active listings are short sales or foreclosures.  So 85% of home sellers…not in foreclosure.

So other than these juicy little tidbits of data, I’ve got nothing new for you.

Same ol’ same ol’.

Bargain hunters…See the Salem Oregon foreclosed homes and then you know the drill…call me.

Foreclosure data is calculated from information received from Fidelity National Title Co.  Sales data is calculated from the WVMLS.