Tag: foreclosures

Foreclosures Off 30% This Year

Foreclosures off 30% this year

By Les Christie, staff writer

April 14, 2011

NEW YORK (CNNMoney) — On the surface, the foreclosure crisis seems to be easing. The number of foreclosure notices filed during the first three months of 2011 fell 27% compared with the first quarter of 2010, according to a report from RealtyTrac released Thursday.

Only 681,000 properties got hit with some type of filing — a notice of default, a scheduled auction or a foreclosure sale — during the quarter, one for every 191 households.

There were 215,046 borrowers who lost their homes, down 17% year-over-year.

That improvement was in sharp contrast to other recent housing market metrics, with sales of existing and new homes very weak and home prices still sliding.

“The nation’s housing market continued to languish in the first quarter, even as foreclosure activity fell to a three-year low,” said James Saccacio, RealtyTrac’s CEO.

The explanation for this contradiction is that the foreclosure improvement has been artificial, fueled by banks reacting to paperwork processing issues — the infamous “robo-signing” scandal — by cutting back on filings until they can clean up their procedures.

According to RealtyTrac spokesman Rick Sharga, without the cutback there would have been 900,000 filings during the quarter instead of 681,000. There would have been 280,000 to 300,000 bank repossessions instead of 215,000, he added.

Houses: What a million dollars buys

Fewer homes were repossessed even though banks are modifying fewer loans to make them more affordable. Hope Now, a coalition of servicers, community groups and mortgage investors working to stem foreclosures reported last week that its members had modified 87,000 loans in February compared with 110,000 in December 2010.

Hope Now’s director, Faith Schwartz, said fewer mods hardly means that the foreclosure crisis is clearing. “In the midst of all the disruptions, it’s difficult to pinpoint a trend,” she said.

The big positive that Schwartz cites is the significant month-over-month drops in both new foreclosures and in the number of borrowers who are 60 days or more late with payments. If fewer borrowers are entering the foreclosure process, fewer should eventually lose their homes.

On the other hand, said Schwartz, the severity of the delinquencies is increasing, with these borrowers falling 527 days past due, on average.

In New York and New Jersey, according to Sharga, it’s more than 800 days now between when a typical delinquent borrower first receives a notice of default to when the home goes to a sheriff’s sale.

“It’s likely that most of those are not making any mortgage payments” during that period, he said.

The drop in foreclosures is widespread. RealtyTrac reported that filings dropped in each of the 20 hardest-hit metro areas. Year-over-year declines reached as high as 59% in Cape Coral, Fla., for the quarter. Even in Las Vegas, ground zero for the mortgage meltdown over the past few years, filings fell 8%.

Nevada, Arizona and California continued to rank as the states with the highest foreclosure rates. They came in 1-2-3 both for the quarter and for the month of March. The Fourth Horseman of the Foreclosure Apocalypse, Florida, has dropped down in the standings, to eighth place for the quarter and ninth for the month.

Las Vegas is once again the highest ranked metro area in per-capita foreclosures. One of every 31 homes absorbed a filing during the quarter, about six times the national norm. Modesto, Calif. (one in 46), Stockton, Calif. (one in 47), Vallejo. Calif., and Phoenix (both one in 48) filled out the top five.

http://money.cnn.com/2011/04/14/real_estate/foreclosures_first_quarter_2011/index.htm

Things To Know About Buying Foreclosures

Things to Know about Buying Foreclosures

Are you thinking about buying a foreclosed home for yourself or as an investment? Due to the fact that foreclosures are sold below market price, you will definitely get a great investment when purchasing a foreclosed home.

Even though you might not spend as much money on a foreclosed home as you would on a conventional home, before making a lifetime investment you should know in what you invest. Therefore you should start getting familiar with foreclosures and how to prevent from the risk to invest in the wrong property.

What does foreclosed mean?

Foreclosed means, that a borrower/owner cannot pay the loan or mortgage payments back. The lender has to secure the loan and starts the foreclosure process.

The pre-foreclosure process in California starts from the time the borrow/owner misses his first payment. The owner will receive a “Notice of Default”. From then on the owner has 90 days time to find the missing payment, within this 90 days of notice the mortgage company will prepare to bring the home on the market. The foreclosure sets in after the 90 days and the owner will receive a “Notice of Sale”.

How you benefit from buying a foreclosed home

  • Buying a foreclosed home means you spend less money on a property with more market value
  • Some lenders are willing to lower the down payment or interest rate or will not charge closing costs since the mortgage is in default
  • You have a wide selection on foreclosed homes
  • The property can be sold for more money later

What you should know before buying

It’s important that you work with an agent or broker who is experienced with the process of buying foreclosed homes.

Before putting down an offer you need to know what you are buying. It is important that you have the property inspected by a home inspector and find out about the real conditions of the property.

Don’t buy a property you have never seen at an auction. Instead buy REOs through a real estate agent.

The foreclosure process has 4 steps. For you the buyer it is important to know in which state the property is for your strategy to buy.

You need to know that many laws that usually protect you in a conventional real estate transaction do not apply to a foreclosed property.

The property will be sold under market price but might need some renovations. When buying a foreclosed property you have to keep that in mind when making your calculations.

Always do a title search on a property. You have to know if there are any existing encumbrances or liens on the property. Oftentimes property taxes need to be considered.

In some cases the previous owner refused to move out and vacant the property even after the title was transferred. This will lead to an eviction process and you as the new owner have to evict the tenant.