Why Is – Or Isn’t – Real Estate Rebounding? James Saccacio, CEO RealtyTrac

A BRIEF INTRODUCTION TO REALTYTRAC 2 ©RealtyTrac Inc. 2011, Not for Distribution James J. Saccacio CEO, RealtyTrac Ext. 104 Facebook.com/realtytrac Blogs.forbes.com/jimsacaccio

RealtyTrac publishes the country’s largest database of foreclosure and bank-owned properties –Data from over 2,200 counties, covering over 92% of U.S. housing units #1 online Foreclosure marketplace – over 2 million foreclosure and bank-owned properties nationwide Unmatched property evaluation and transactional tools –HomeScore, Equity & Loan Info, Property Analyzer, Online Offers, Foreclosure-MLS Match, and much more 90 Million Assessor Property Records just added! ABOUT REALTYTRAC 3 ©RealtyTrac Inc. 2011, Not for Distribution

WHO RELIES ON REALTYTRAC DATA 4 ©RealtyTrac Inc. 2011, Not for Distribution

WHO RELIES ON REALTYTRAC DATA 5 ©RealtyTrac Inc. 2011, Not for Distribution

WHO RELIES ON REALTYTRAC DATA ©RealtyTrac Inc. 2011, Not for Distribution 6

WHAT WE’LL COVER TODAY Why is – or isn’t – real estate rebounding? In-depth look at Shadow Inventory –Nationwide –California 7 ©RealtyTrac Inc. 2011, Not for Distribution

WHY IS - OR ISN’T - REAL ESTATE REBOUNDING? 8 ©RealtyTrac Inc. 2011, Not for Distribution

WEAK U.S. DEMAND 9 ©RealtyTrac Inc. 2011, Not for Distribution

GOVERNMENT INTERVENTION : Neighborhood Stabilization Program –$7 billion awarded to states and local governments to purchase and redevelop foreclosures and abandoned homes 2009: Modification Incentives (HAMP): : Short Sale Incentives (HAFA): : Help for unemployed homeowners (EHLP) –Up to $50,000 to help unemployed borrowers pay mortgage –Alabama received $162 million for unemployed borrowers Numerous state laws extending foreclosure process Alabama is one of a few exceptions with no big changes to state foreclosure law HARP II: Refinancing for underwater homeowners who are current on their mortgages, with no cap on LTV ©RealtyTrac Inc. 2011, Not for Distribution

MEDIAN PRICE VS. MEDIAN INCOME ©RealtyTrac Inc. 2011, Not for Distribution 11

SLOPPY FORECLOSURE PRACTICES ©RealtyTrac Inc. 2011, Not for Distribution 12 Artificial drop-off in foreclosure activity triggered by robo-signing U.S. Monthly Foreclosure Activity

LONGER FORECLOSURE TIMELINES ©RealtyTrac Inc. 2011, Not for Distribution 13 California timeline about at national average N.Y. timeline longest in country

IN-DEPTH LOOK AT SHADOW INVENTORY 14 ©RealtyTrac Inc. 2011, Not for Distribution

SHADOW INVENTORY OF SUPPLY 15 ©RealtyTrac Inc. 2011, Not for Distribution Built by Skyrocketing Foreclosures & Plummeting Home Prices Up 0.2 percent from July to August 2011

U.S. SHADOW INVENTORY OF SUPPLY 16 ©RealtyTrac Inc. 2011, Not for Distribution 10 Percent Jump in Default Notices in October SOURCE: RealtyTrac U.S. Foreclosure Market Report

U.S. SHADOW INVENTORY OF SUPPLY 17 SOURCE: Mortgage Bankers Association Q National Delinquency Survey ©RealtyTrac Inc. 2011, Not for Distribution

U.S. SHADOW INVENTORY OF SUPPLY 18 Loans with an LTV of at least 125 percent as of Sept 2011 ©RealtyTrac Inc. 2011, Not for Distribution SOURCE: RealtyTrac U.S. Foreclosure Market Report

COMING OUT OF A RAIN DELAY ©RealtyTrac Inc. 2011, Not for Distribution 19

U.S. SHADOW INVENTORY OF SUPPLY 20 ©RealtyTrac Inc. 2011, Not for Distribution

U.S. SHADOW INVENTORY OF SUPPLY 21 Avg. REO prices 40% lower than avg. prices of non-foreclosures ©RealtyTrac Inc. 2011, Not for Distribution

U.S. SHADOW INVENTORY OF SUPPLY Percent Increase from Q1 to Q2 ©RealtyTrac Inc. 2011, Not for Distribution

U.S. SHADOW INVENTORY OF SUPPLY 23 Tied record- high for short sale discount in Q ©RealtyTrac Inc. 2011, Not for Distribution

IMPLICATIONS FOR THE HOUSING MARKET 24 ©RealtyTrac Inc. 2011, Not for Distribution

ESTIMATED ABSORPTION RATES ©RealtyTrac Inc. 2011, Not for Distribution month supply of bank-owned REOs 17-month supply of default & auction properties 41-month supply of delinquent properties 30- to 45-month supply of distressed property Based on 265,000 distressed properties sold each quarter SOURCE: RealtyTrac

CALIFORNIA SHADOW INVENTORY OF SUPPLY 26 ©RealtyTrac Inc. 2011, Not for Distribution

COMING OUT OF A RAIN DELAY ©RealtyTrac Inc. 2011, Not for Distribution 27

CALIFORNIA SHADOW INVENTORY OF SUPPLY ©RealtyTrac Inc. 2011, Not for Distribution Percent Jump in Default Notices in October 2011 SOURCE: RealtyTrac U.S. Foreclosure Market Report

CALIFORNIA SHADOW INVENTORY OF SUPPLY ©RealtyTrac Inc. 2011, Not for Distribution 29 SOURCE: Mortgage Bankers Association, Q National Delinquency Survey

SERIOUSLY UNDERWATER CALIFORNIA LOANS: 2 MILLION ©RealtyTrac Inc. 2011, Not for Distribution percent of all outstanding California mortgages had an LTV of at least 125 percent as of Sept SOURCE: RealtyTrac

THE MOST DEPRESSED HOUSING MARKETS ©RealtyTrac Inc. 2011, Not for Distribution 31 SOURCE: CoreLogic, Zelman & Associates

CALIFORNIA BANK-OWNED SALES ©RealtyTrac Inc. 2011, Not for Distribution 32

CALIFORNIA BANK-OWNED SALES ©RealtyTrac Inc. 2011, Not for Distribution 33

©RealtyTrac Inc. 2011, Not for Distribution 34 CALIFORNIA PRE-FORECLOSURE SALES

CALIFORNIA PRE-FORECLOSURE SALES AVG PRICES & DISCOUNTS ©RealtyTrac Inc. 2011, Not for Distribution 35

CALIFORNIA UNEMPLOYMENT RATE ©RealtyTrac Inc. 2011, Not for Distribution 36 California Unemployment Rate – 11.9% in Sept SOURCE: U.S. Bureau of Labor Statistics

ESTIMATED CALIFORNIA ABSORPTION RATES ©RealtyTrac Inc. 2011, Not for Distribution 37 9-month supply of bank-owned properties 14-month supply of default & auction properties 19-month supply of delinquent properties 28- to 33-month supply of distressed properties Based on 69,897 distressed sales per quarter SOURCE: RealtyTrac

2010 MIGRATION PATTERNS ©RealtyTrac Inc. 2011, Not for Distribution 38 SOURCE: United Van Lines, January 2011

JIM’S CALIFORNIA SCORE CARD National Average Days to Foreclose:336 Days California Average Days to Foreclose:363 Days+ Short Sale Discount:35%+ REO Discount:50%+ Annualized Home Sales:409,000+ Delinquency Trends:Flat- Default Trends:Rising- Delinquency/Default Direction:Rising- Home Price Direction:Down- Unemployment Rate: (Above Natl. Avg.)11.9%- Migration Pattern:neutral GRADE:ABCDF ©RealtyTrac Inc. 2011, Not for Distribution 39

THANK YOU! 40 ©RealtyTrac Inc. 2011, Not for Distribution James J. Saccacio CEO, RealtyTrac Ext. 104 Facebook.com/realtytrac Blogs.forbes.com/jimsacaccio