It just keeps getting worse: Foreclosures in CA
Mr. Mortgage reports: "July was another record month for foreclosures in the state of CA with all hell breaking lose and banks taking back roughly 26,500 homes for $12.5 billion. ’Record-breaking’ is not a good thing in the foreclosure universe. This 25% increase breaks all records ever posted and all foreclosure estimates. "
"To clarify, when I say ‘loans taken back by banks’, these are actual foreclosures. When a home goes to the auction block the bank puts up the opening bid. If no 3rd party bidder comes in, the bank buys it back. All year long in CA at least, banks have been buying back roughly 97-98% of all homes that go on the auction block. That is an astounding figure in and of itself!"
To all you who think a bottom is in the banks and that homebuilders are about to turn. If there is this much inventory, how does a homebuilder make money? Banks can't sell 98% of their homes--why build new ones?! And banks, oh the banks. If they can't raise any money from foreclosing on homes, what are they going to do? The longer you own a home and don't sell it, the worse it gets. Animals and Bums move in, it gets damaged (in Florida mold will destroy it within a year or two) and you have to pay property taxes. What ends up happening? Foreclosed unsellable houses get bullzoed--kind of like a bank's stock price.
Financials set to rally, this is a generational buying opportunity! Hohoho no! We're heading lower, much lower.
Mr. Mortgage's site: http://mrmortgage.ml-implode.com/2008/08/07/record-foreclosures-sweep-ca-in-july-breaking-news/