Sunday, May 06, 2007

Where are the VA Foreclosures?

I was just dusting off my real estate license and wondering how many VA repos were for sale in San Diego. It's kind of weird, only 3 for the whole state of California. Florida had 20 and Arizona had 1. The nice thing about VA Repos as a real estate agent, you get both sides of the commission. You get the full 6%.

Back in 1999 it was normal to see anywhere from 20 to 50 properties listed every two weeks for the San Diego area alone. The big thing about VA Repos, was that they could set the comps for a particular area in a fast way.

From the looks of the present figures, there is a couple of years of agony in this market before it even gets to the 1999 figures. The peculiar thing is that Realtytrac has 6,100 houses listed as REO's in the San Diego area. You'd kind of guess that maybe about 50 of them ought to be VA.

Here's a neat site for California readers. It lists the REO's, NOT's, and NOD's for an area (you only get 20 in an 8 mile radius unless you want to pay for the service) Foreclosure Radar. My wife went through our whole address book on this web site, and it does not look good anywhere in LA or San Diego (at least for the people we know).


Anonymous said...

San Diego foreclosures SKYROCKET today. 191 today alone in San Diego county. Why today?

Jim in San Marcos said...

I noticed some discrepancy's also. the number of foreclosures dropped from 25,673 to 23,885 when we went into May.

I would guess that there are not enough people typing in the data on a consistent basis and that's what we are looking at. There are those houses that drop off the list and those that are added. Looks like the increase in volume might have something to do with it.

Anonymous said...

With the loose lending standards of the sub and alt-A market, the average "Joe" with a job did not need the VA to buy a house.

does the VA even offer a 2 year ARM or interest only? I think the only way a person in the service could afford a 600 K house is an intrest only loan.

Or, like Jim said, the VA could be "behind".

Jim in San Marcos said...

Anon Raises a good point the max VA loan amount is 203K. I do remember showing some condo's in 1999 that had a foreclosure note amounts over 280k.

I know that the VA guarantees the original bank loan up to 203K. But if you read the fine print that the banker gets, The VA insures the bank against loss on the first 20% of the loan amount. So on a 200k loan, the VA is insuring 40k of the note.

I see 3 listed today for Kalifornia, ranging from 180-329K.

So there is a pretty good reason why there aren't very many VA foreclosures in California (Its spelled with a K if you voted for Schwartzie).

So to answer my own question "Where are the VA Foreclosures?" Not in Kalifornia for a while! I missed the obvious answer by a mile! It's humble pie for me tonight.

Jim Driscoll said...

The answer is simple, and contained in the last comment: VA loans are limited in amount. In California, that amount is SO small, you can't buy a house. I found this out in 2005 when I went to use my one time VA loan benefit. My broker was polite, but you could tell she was laughing on the inside :-)

Jim in San Marcos said...

Jim D

I know what you mean. It use to be the other way around.

In 1999, I wrote a VA contract to a guy with two divorces, he was a cosigner on the house with the second wife, with child support for 3 kids, and a new wife, after a bankruptcy (7 years before), and they accepted his bid. It was Christmas week and I think we were the only bidders, because I low balled their asking price by 20%.

So I guess that maybe the VA started the ball rolling, and they got lost in the dust.

The playing field is going to level. My neighbor bought his house for 650K and I live next door and only pay $1,600 per month rent. I know his taxes are 6,500 and his mello roose is 4K so he got a big bill to pay.

Hard to believe isn't it?