Repo Homes Listings
There are discrepancies in the repo homes listings - as pointed out by many data collecting firms. The realtors too are of the same opinion. They are saying that after the bank takes over the foreclosed house the repo home listings do not always show up all the properties. Some are kept back. The rule is that within three months the foreclosure should show in the books as being sold or having become bank repossessed.
But statistics are showing wide gaps between the foreclosures repossessed and the number showed in the repo homes listings. The banks are keeping these in the sidelines waiting in the wings afraid that if exposed on the stage then prices will take drastic tumbles - much worse than what it is now. Thus the repo homes listings do not give the true picture - it is much more than shown on the listings and in the long run dangerous for the economy. The present risk is that without true numbers assessment of the situation is difficult.
The banks however do not want to admit this about the repo homes listings. Tom Kelly speaking for JPMorgan Chase of Chicago said, "We try not to be in the business of owning homes," he said. "Our goal is to get them back on the market as quickly as possible. We want to maximize what we sell them for and yet do it quickly." However Kelly could not give a satisfactory explanation for the 'shadow inventory phenomenon.' He said, "The inventory might be growing because there is just a lot of volume coming in. That would not surprise me."
The latest statistics show that the foreclosure numbers have decreased considerably since the peaks reached in August 2007. But observers say that the recent fall in numbers was because of artificial moratoriums induced during the last few months.
DataQuick made a survey of all the houses repossessed by the banks in the Bay Area since 1st August 2007 to 31st January 2009. The findings were that 65.5% of the houses had been sold by the middle of March 2009.
Another firm, Foreclosure Radar.com found less than one fifth of the foreclosures ultimately showed up on repo homes listings. Sean O'Toole of the firm said that the number of foreclosures is artificially depressed. He calculates that the hidden numbers will be about 100,000 houses in California.
The danger is that any day the snakes might hiss out of hibernation and further mire the critical situation catching the economy unawares.