"This is not the result of a person evaluating these deals on a case-by-case basis," Bosch said. "This is a computer working off a formula."
The major lenders are reluctant to talk about their foreclosure strategies. Officials at Calabasas-based Countrywide Financial Corp., whose inventory in California exceeds 2,300 foreclosed homes, declined to be interviewed.
At Wells Fargo, spokesman Kevin Waetke said, "We price our properties in accordance with the local market and expect to sell at market value." One of the lender's explicit goals: maintaining the vitality of the neighborhood. Wells Fargo's website lists 3,400 foreclosed properties for sale in California.
Other major lenders, including GMAC Mortgage and Washington Mutual, declined to release their foreclosure numbers.
Neil Gitnick at Value Home Loan, a small Woodland Hills lender, has a handful of foreclosures -- 27, nearly all in California. But the market's troubles haven't dented his faith in the state's prospects.
"We price our foreclosed houses high, at full market value," he said. "We don't accept offers which come from speculators lowballing us. We're not desperate, and I'm sure Countrywide is far from desperate."
Gitnick is keeping a dozen of his foreclosed homes in his portfolio as rentals. He figures they'll be worth more in a few years, and in the meantime will bring in income. Four others are on the market, with the rest to follow.
With the lenders pricing in line with the market, sales have stalled.
"Buyers are only interested in the lender-owned houses because that's where they think the bargains are," said Sylvia Tudor, a Victorville agent who sells foreclosed properties for Countrywide and others. Then they see the prices, she said, and back off.
Business might be bad, Tudor said -- she estimated there were 25 homes on the market in the high desert for every serious buyer -- but the agent had a certain sympathy for the lenders' predicament.
"They're trapped in a Catch-22," she said. "If the market goes down too quick, there will be more foreclosures. People won't be able to refinance or make their payments. Isn't that how this all started?"
A wild card in this gloomy scenario is the liquidity worries that are gripping Wall Street.
When money becomes scarce, it gets more expensive. Interest rates on so-called jumbo mortgage loans -- those of more than $417,000 -- have risen steeply in recent weeks. At all levels, marginal buyers are being eliminated.
It's got to get worse before it gets better, said Michael Davin, executive vice president of Catalist Homes in Hermosa Beach, echoing the new mantra of the real estate business.
"We need a shakeout to stabilize the market," he said. "Lenders are going to have to start cutting prices big time."
