Here They Come.

It looks like BofA is ramping up the foreclosure engine as reported a few posts ago. That post from IHB said that BofA expected to increase foreclosures by 600% by years end. This report from The San Diego North County Times indicates the increase has begun. Riverside saw a 67% increase from Feb to March. Most of those homes will not hit the market for a few months though.


Bank of America, the nation's largest mortgage lender, ramped up its foreclosure activity in March, sending hundreds of letters warning delinquent borrowers in the region that it could sell their homes at auction in as little as three weeks, according to North County Times analysis of data from ForeclosureRadar.
The bank said the increased activity was a natural consequence of borrowers running out of options. Analysts and real estate agents said the moves by the Charlotte, N.C., banking giant, which controls a large share of the Southern California mortgage market, could signal a final reckoning for homeowners who have been protected by government programs for months or even years.

Last month, a Bank of America division called ReconTrust N.A. sent out a flurry of "notices of auction," which alert owners of the date their homes could be sold in foreclosure proceedings.The notices went to 230 homeowners in North San Diego County, a 69 percent increase from February, and to 391 owners in Southwest Riverside County, up 67 percent from February. By comparison, in March 2009, ReconTrust sent a total of 31 such letters to both regions combined.
ReconTrust was formed as the foreclosure division of Countrywide Financial Services Inc., the company that helped drive the real estate boom of the 2000s with its no-documentation "liar loans" and enormous subprime portfolio.

More foreclosures expected
When Bank of America agreed to take over Countrywide in January 2008, Countrywide said it managed 9 million loans valued at $1.5 trillion. Richard Simon, a Bank of America spokesman, wrote in an e-mail that he couldn't speak to the sharp increase of notices in San Diego and Riverside counties, but that the bank has expected more foreclosure activity.
"We have reported recently that we anticipate a rise in foreclosure activity through the coming months as homeowners are unable to qualify for loan modifications, fall out of modification programs or go into delinquency due to the ongoing stress in the economy," he said.
Bank of America has permanently lowered monthly payments for 12,700 borrowers through the Treasury Department's Home Affordable Modification Program, more than any other lender. But the program as a whole is widely deemed a failure, because just 17 percent of applicants nationally have managed to qualify and keep up their payments, according to the latest Treasury report.

Data showing that Bank of America borrowers were falling out of HAMP and into foreclosure in rising numbers didn't surprise analysts. "That makes sense," said Jamie Peters, a financial analyst who covers Bank of America for the investment research firm Morningstar Inc. "'We've given them the chance, it hasn't worked, we need to move ahead' type of idea," Peters said.
Another analyst who tracks Bank of America, Shannon Stemm of investment bank Edward Jones, said the loans now being foreclosed are "older," meaning borrowers had plenty of time to try a modification, and the bank had to get the delinquent loans off their books. "A lot of the bad loans we're seeing from a couple of quarters ago are getting to a place where (Bank of America) need to make a decision for what to do with that bad loan," she said. Morningstar's Peters thought the bank might be taking advantage of a strengthening California housing market.
"My Bank of America asset manager told me we'd really start to get hit with inventory in mid-May to June," said Teri Garcia, a real estate agent based in Escondido who sells Bank of America foreclosures.

"If they're sending notices of auction in March, that about fits," she said. Garcia said the local supply of foreclosed homes has been low all through the winter. She was thrilled to hear that more homes might be coming onto the market this summer. "Let's get them on the market, get them sold, and get through all this," she said.