Video Closed Caption:
good morning good afternoon good evening
folks michael zuber one rental at a time
uh we’re going to take a look at some
foreclosure statistics if you are in the
real estate market one of the things
that we are undoubtedly going to hear a
lot about in the very near future if not
already
is foreclosures or spiking foreclosures
or problem delinquencies
all of those things we’re likely going
to hear that foreclosures will probably
lead to price crashes
so what i thought i would do is just
look at the actual information
having been an investor who bought some
foreclosures
i could tell you you’re absolutely right
foreclosures short sales typically come
with a significant discount
they are often in a distressed state so
they’re most likely not perfect
in fact i don’t remember buying a
foreclosed property that didn’t require
tens of thousands of dollars in cleanup
and repair
but that said uh i think it is important
to look at the actual information and uh
we’re gonna do that by looking at some
information from black knight i like to
use black knight because uh a they track
the stuff they have historical relevance
and they don’t have a bias
black knight is not a real estate
organization that will tell you
prices are going up prices are going up
they’re not in the real estate crash
camp price is going down prices going
down
they’re more like hey here’s the data
here’s the seasonality here’s the
historical information so i like to look
at black knight because they are
non-biased so let’s take a look
again this comes from an article uh from
someone i follow on twitter uh we’ll
give him his props real quick
um
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calculated risk is the blog it is why am
i not seeing his name
one sec i will go to my phone because i
just got it it’s bill mcbride bill
mcbride sorry i should have had that
handy bill mcbride so again we’re
looking at mortgage delinquency rates
for july it was just published on the
24th so this is
this is like
three hours old
so the first thing to look at is the
national delinquency rate delinquency is
missed a payment
it is not only mis you know doesn’t have
to be foreclosure so we’re looking at
early in the process so delinquency rate
is 2.89 in july
there was a four percent increase in
early delinquencies think missed one
payment missed two
uh it is 14 uh basis points higher than
a record low of may so
it is still statistically relevant at a
record low
serious delinquencies these are three
months remember folks we’ve talked about
the foreclosure process it doesn’t
actually it’s not even legal to start
until you’re three months down hint
called serious delinquent
uh loans that are 90 more days past due
but not yet active in foreclosure has
pulled back
after worsening for the first time in 22
months so it got a little worse in june
but got better in july really what we’re
seeing here folks is banks are acting
different
as an investor and buyer through the
last crisis i can tell you this is not
how banks operated last time
the number of seriously delinquent loans
curing which means getting fixed or
addressed has dropped steadily over the
recent months after peaking at 104 now
down to 58 so they’re
curing slower total volumes but again as
you’ll see the base is actually much
smaller as well
foreclosure starts retreated 25
i’ll say that again foreclosures down 25
from the june total of 17 grand
17 000 folks 17 000 we used to do 200
000
we are 55 below pre-pandemic levels
equating to just three percent so again
not the big wave that people keep
talking about but that doesn’t mean they
won’t keep talking
we are still at record lows right spread
more terms for brain forbidden
forbearance protections number loans
active foreclosure declined slightly to
six thousand
six thousand
prepayment activity dropped another 18
percent in july is down 67 that’s just
refi and sales so again black knight is
basically saying
uh the link so here’s the math right
here here’s their chart we’ll just close
with this so we have july of 22 june of
22 july of 21 july of 20.
so we can go back and look at last month
last year and two years ago the
delinquency rate is slightly higher than
last month right 2.89
but significantly lower
than the pandemic
foreclosures are better
they went down slightly not just barely
half a percent
properties that are delinquent
basically 1.5 million
we were as high as almost 3.7 million in
july of 2020
properties in foreclosure 184 000.
just 184 000.
so total properties in trouble about 1.7
million
so again folks
you’ve undoubtedly seen
articles about foreclosures up 400
percent 100 percent
we’re talking very small numbers there
will undoubtedly be an increase in
foreclosures i’m not here to tell you it
won’t be
but they will be double you know triple
digit 100 150 off very very small
numbers
as somebody who was buying in the last
crisis the big difference there’s two
big differences
one
banks are fundamentally
different
in the last crisis if you were 90
90 days late
you were over 90 percent likely to be
foreclosed
today you get 90 days late you’re likely
to get a loan workout
or a forbearance
banks are acting banks will just simply
not foreclose like last time i’m sorry
it’s not going to be the way that we all
want or hope for
second the loan product
last time the loan was toxic
these teaser rates would reset and the
loan payments would explode
today if you get in trouble you probably
have equity but if you don’t have equity
you probably have a fixed rate mortgage
which is probably valuable to someone
so there will be more foreclosures
undoubtedly there will be more pain
there will be more job losses it’s just
not going to be
2010 in 2011
all over again so let me know what you
think this again is sourced from black
knight black knights data take care of
yourself have a wonderful day