U.S. Foreclosure Outlook - NACo › sites › default › files › documents...2006 Q3 2006 Q4 2007 Q1 2007 Q2 2007 Q3 2007 Q4 2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2 2009

©Copyright RealtyTrac Inc. 2010

To: Company Name Here

Date: Goes Here

U.S. Foreclosure Outlook

Where we’ve been, where we are, and where we’re going


A brief note on methodology

RealtyTrac collects foreclosure documents, postings

and published notices from about 2,200 counties

nationwide.

Counties account for over 92 percent of all U.S. housing

units

Data is collected primarily by network of abstractors

Monthly counts are based on date the

document/posting/notice was uploaded into the

RealtyTrac database, not the recording date


Where we’ve been: 2005-2010 Foreclosure Review

An historically unprecedented cycle

First wave not started by usual economic trends, but by unsustainable home prices and high-risk monetary and underwriting practices

Sub-prime loans started the wave, and provided the “tipping point” for the mortgage market meltdown

Properties with foreclosure filings have exceeded 300,000 for 20 consecutive months through Oct. 2010

March 2010 was the highest month ever in terms of foreclosure activity, with over 367,000 U.S. households receiving a foreclosure notice

That will trend will be broken in November because of fallout from “robo-signing” controversy


U.S. foreclosure activity over last five years

0

50000

100000

150000

200000

250000

300000

350000

400000

U.S. Monthly Foreclosure Activity

Default Auction REO

March 2010 highest monthly

total with 367,056


The “Delay and Pray” strategy usually doesn’t work

-

20,000

40,000

60,000

80,000

100,000

120,000

Apr

-05

Jun-

05

Aug

-05

Oct

-05

Dec

-05

Feb-

06

Apr

-06

Jun-

06

Aug

-06

Oct

-06

Dec

-06

Feb-

07

Apr

-07

Jun-

07

Aug

-07

Oct

-07

Dec

-07

Feb-

08

Apr

-08

Jun-

08

Aug

-08

Oct

-08

Dec

-08

Feb-

09

Apr

-09

Jun-

09

Aug

-09

Oct

-09

Dec

-09

Feb-

10

Apr

-10

Jun-

10

Aug

-10

Oct

-10

Default Auction REOSB 1137 takes

effect in Sep 2008


Where we’ve been: foreclosure sales skyrocketing

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

2005 Q1

2005 Q2

2005 Q3

2005 Q4

2006 Q1

2006 Q2

2006 Q3

2006 Q4

2007 Q1

2007 Q2

2007 Q3

2007 Q4

2008 Q1

2008 Q2

2008 Q3

2008 Q4

2009 Q1

2009 Q2

2009 Q3

2009 Q4

2010 Q1

2010 Q2

2010 Q3

Perc

ent o

f All

Sale

s

Tota

l For

eclo

sure

Sal

es

U.S. Total Foreclosure Sales Activity# of Sales Pct. of All Sales


Where we are

At or near the “technical” peak of foreclosure activity

U.S. foreclosure activity has decreased on annual basis

in five of last seven months

New foreclosure starts have decreased on annual basis

for nine straight months

But risk remains in market

High unemployment

Underwater homeowners (20% plus)

Toxic loans still lingering

Backlog of bank-owned inventory


Where we are: Foreclosure Starts decreasing

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

Annual Percent Change in Foreclosure Activity by Type

Default YOY Auction YOY REO YOY


Where we are: Top 10 State Foreclosure Rates


Where we are: backlog of bank-owned inventory

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

2005 Q2

2005 Q3

2005 Q4

2006 Q1

2006 Q2

2006 Q3

2006 Q4

2007 Q1

2007 Q2

2007 Q3

2007 Q4

2008 Q1

2008 Q2

2008 Q3

2008 Q4

2009 Q1

2009 Q2

2009 Q3

2009 Q4

2010 Q1

2010 Q2

2010 Q3

2010 Q4

RealtyTrac New REO Activity RealtyTrac # of REO Sales

Since Q2 2005, 1.7 million more REOs

have been created than have been sold


Where we are: more shadow inventory

New Home Sales,

307,000, 3%

REO, 900,000, 8%

Properties in

Foreclosure Process,

1,200,000, 10%

Delinquent,

5,000,000, 41%

Exhisting Home

Sales, 4,530,000,

38%

59% of the housing market, or 7.1 million, are in some stage of distress


Where we are: toxic loans lingering

SOURCE: Amherst Securities, Loan Performance

14


Where we’re going

Foreclosure levels remain at a high plateau in 2011

Unemployment will drive high levels of foreclosure

activity through 2011

Resetting option ARMs could also contribute to

continued high foreclosure levels

Foreclosure activity turns corner 2012 to 2014

Optimistically, levels could start declining consistently in

2012, which would match the typical seven-year window

we have seen with high foreclosure cycles in the past.

Pessimistically, the cycle pushed out up to two years

because of the delays we’ve seen over the past two

years in getting the distressed inventory cleared.


Where we’re going: 2010 and 2011 projections

717,522

1,285,873

2,330,483

2,824,6742,900,000

3,000,000

1,259,118

2,203,295

3,157,806

3,957,643 4,000,000 4,100,000

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

2006 2007 2008 2009 2010 (p) 2011 (p)

U.S. Properties with FC Filings Total FC Filings



Date: Goes Here

Charting foreclosures by county


Charting foreclosure rates by county – October 2010


2006


2007


2008


2009


2010 Year-End Projection


Hope for first-time homebuyers



Date: Goes Here

Contact Information

Daren Blomquist

Director of Marketing Communications

949-502-8300 Ext. 115

[email protected]

mailto:[email protected]

Documents

U.S. Foreclosure Outlook - NACo › sites › default › files › documents...2006 Q3 2006 Q4 2007 Q1 2007 Q2 2007 Q3 2007 Q4 2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2 2009