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MailTribune.com
  • 'Shadow inventory' of homes falls in U.S.

    These are houses repossessed by lenders but no put on market yet; decline tops 10 percent
  • The residential real-estate fear factor known as the "shadow inventory" decreased nationally during the latest measuring period, according to CoreLogic.
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  • The residential real-estate fear factor known as the "shadow inventory" decreased nationally during the latest measuring period, according to CoreLogic.
    The Irvine, Calif., data provider reported Tuesday the national residential shadow inventory — houses that have been repossessed by lenders but not yet put on the market — declined 10.2 percent to 2.3 million units as of July, down from 2.6 million units in July 2011. The figure represents six months of housing sales.
    CoreLogic said the flow of loans that are more than 90 days late and going into default has been roughly offset by the equal volume of distressed sales — foreclosures and short sales.
    Colin Mullane, a spokesman for the Rogue Valley Association of Realtors, said Southern Oregon's shadow inventory has receded deeper into the shadows after the Legislature passed a bill earlier this year requiring major lenders to offer mediation to borrowers facing foreclosure.
    "I hear all kinds of numbers, but I haven't heard anyone present them in a way where it seems realistic to me," Mullane said.
    When SB 1552 went into effect this summer, the weekly default reports compiled by title companies dried up as the financial disease plaguing many homeowners seemingly went into remission.
    "We see houses from big banks as well as small banks, fairly consistently, and they are selling them once they go through foreclosure," Mullane said.
    "My caution in Oregon is the fact there haven't been many, if any, nonjudicial foreclosures in Jackson County and many other counties around the state since then."
    The foreclosure process inevitably will grind back into action, he said.
    "Looking at other states that have gone down a similar path, typically foreclosure proceedings are stalled, then the process resumes in five or six months," Mullane said. "If their course of action is resolved, then in December, January or February, when banks figure out whether they will either go through a judicial foreclosure process or mediate with people, we'll see the inventory building up again."
    CoreLogic said the dollar volume of the shadow inventory was $382 billion nationally as of July 2012, down from $397 billion a year ago and $385 billion last month.
    Delinquencies of 90 days or more, which are the main driver of the shadow inventory, declined the most from April to July in Arizona (3.2 percent), Pennsylvania (2.8 percent) and New Jersey (2.3 percent).
    During July, Florida, California, Illinois, New York and New Jersey accounted for 45 percent of all distressed properties in the country.
    Reach reporter Greg Stiles at 541-776-4463 or email business@mailtribune.com.
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