Sorting through the foreclosure mess
Sean O’Toole, who spent 15 years working at software companies, started researching foreclosures in 2002 as he built up a portfolio of rental properties. Over the next three years, he bought about 150 homes, but was unhappy with the data sources and business management tools available to professional investors in foreclosure properties. So he started ForeclosureRadar in 2006, predicting that a high tide of foreclosures was on the way, and “people would need tools to track this stuff.”
Based in Discovery Bay, the company has focused on delivering information about California foreclosure properties to subscribers, including professional investors, real estate agents and even government agencies. This month, ForeclosureRadar announced expansion into Arizona, Nevada, Oregon and Washington.
O’Toole spoke with Mercury News reporter Sue McAllister about foreclosures in California and why buying such properties can be tricky. The conversation has been edited for length and clarity.
Q What’s the latest trend in California foreclosures?
A The big picture is that we know we have an unprecedented portion of the population underwater in their homes. We have a ridiculously high number of folks who aren’t making their payments, as reflected in the Mortgage Bankers Association delinquency data. We have a record number of homes in the foreclosure process, and we have relatively few foreclosures being finalized. So we know we have a foreclosure problem, but it’s not necessarily resulting in the impact we would expect.
The big question remains, will we see a big wave of these things pushed through, or will it trickle out over time? The third possibility is we do something to fix the fundamental problem, which is negative equity.
