Mortgagee property sales are at an all time high, according to new data released today in the Terralink Mortgagee Sales Report.
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The latest figures available show that during December 2008, there were 191 registered mortgagee sales, the highest number in the 15 years the figures have been recorded.
Terralink International Managing Director Mike Donald said the number represented a 289% increase from December 2007 when there were 66 mortgagee sales.
“Year on year, from 2007 to 2008, there has been a 275% increase in the total annual number of mortgagee sales. And, while the actual number of mortgagee sales is relatively low, the percentage of sales which are mortgagee is increasing dramatically. In 2007 mortgagee sales were 0.25% of all house sales, but for the month of December 2008 mortgagee sales were 4.4% of all sales."
Donald says Terralink data showed that a disproportionate number of mortgagee sales were being driven by second tier lenders such as smaller finance companies.
“Second tier lenders’ proportion of mortgagee sales is much higher than their overall market share. This could indicate that smaller lenders are more distressed or that their loan books are riskier than their big trading bank competitors,” he said.
Terralink derives its mortgagee sales data from legal registrations of actual mortgagee sales.
“There’s been some speculation about increasing mortgagee sales based on anecdotal evidence of how property sales are marketed. This is the first actual evidence based on legal title registrations,” Donald said.