Foreclosure

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10 05, 2013

May 2013 RealtyTrac Foreclosure Report Shows Strength For The US Housing Market

May 2013 RealtyTrac Foreclosure Report Shows Strength For The US Housing MarketRealtyTrac recently reported that national foreclosure filings are down while foreclosure filings are seeing marked increases in some states.

There are two systems for foreclosing residential real estate in the United States; judicial and non-judicial foreclosure. The states individually decide which foreclosure process will be followed in their state.

Click Here To Download An Overview Of The Foreclosure Process

Judicial foreclosure requires action by the courts because the mortgage is not written including a “power of sale clause”. Judicial foreclosure proceedings generally take longer than non-judicial processes due to this court involvement.

A log-jam of delayed judicial foreclosures are beginning to move through backlogged courts with the result of higher numbers of foreclosures started, foreclosure auctions scheduled, and properties either sold to third parties at foreclosure auctions or repossessed by mortgage lenders.

In states allowing non-judicial foreclosure, the matter may be handled outside of the judicial system as the mortgage is written with the power of sale clause which allows the lender to take control of the mortgaged property to satisfy the outstanding lien.

Here are highlights of April’s foreclosure report:

Nationally, 144,790 foreclosure filings were made in April, a decrease of 5 percent compared to March and representing an annual decrease of 23 percent year-over-year. 

Overall, April’s residential foreclosure activity was at its lowest since February 2007. About one of every 905 U.S. housing units had a foreclosure filing during April.

Due to the aforementioned backlog of judicial foreclosures, scheduled foreclosure auctions hit a 30-month high in April rising by 22 percent between March and April.

Some states had markedly higher rates of foreclosure sales scheduled in April 2013 as compared to April 2012. Examples include Maryland (+199 percent), New Jersey (+91 percent), Ohio (+73 percent), Oklahoma (+57 percent), and Florida (+55 percent)

Foreclosure auctions scheduled in non-judicial states were 7 percent lower in April as compared to March, and were an encouraging 43 percent lower in April 2013 as compared to April 2012; this was the lowest reading for non-judicial foreclosure sales scheduled since December of 2005.

Non-judicial foreclosure sales were impacted in some states as the result of legislation affecting foreclosure procedures. Affected states included Arkansas, California, Nevada, Oregon and Washington.

70,133 U.S. homes went into foreclosure in April 2013, which is 40 percent lower than for March 2013 and 28 percent lower than during April 2012.

With home values increasing and large numbers of delayed foreclosures clearing the books, this data offers further evidence that the U.S. real estate market is steadily improving.  As more foreclosures are removed from the housing inventory, home prices should continue to stabilize and increase.

14 03, 2013

4 Critical Tips When Purchasing Foreclosure Real Estate

Buying A Home In ForeclosureBuying a foreclosed property can be different than buying other types of real estate.

In many cases you will be able to get a fantastic deal on a home, but you will need to go through quite a bit of work and negotiation.

Here are four tips to help you navigate the foreclosure buying process:

Find the right real estate agent

The first thing to keep in mind is that your real estate broker will deal directly with the bank that owns the foreclosed property.

The bank has the final say in whether they’ll accept your bid – so you want an agent who has developed a good relationship with them.

Know that cheap doesn’t mean good value

Sometimes the tiny price tag on a foreclosed property can be very tempting, but make sure you are asking questions about the value and the potential expenses of the house.

Will it require extensive repairs?

Will you be able to find a tenant?

Does the property have potential for appreciation over time?

Perform a house inspection

If the previous owners were foreclosed on because they couldn’t make their mortgage payments, it’s possible they didn’t have enough money to give the home the proper maintenance it needed.

Make sure you have the property inspected by a professional to spot any problems.

Take extra care if the house has been empty for a while, as there could be problems with plumbing, insects or mold.

Look for intentional damage

Keep in mind that many owners were forced out of their property by the bank, so they might have removed as many appliances, light fixtures and other items as they could which usually means the house is stripped bare.

The previous owners might have been angry and felt justified in damaging the property.

Make sure to do a thorough inspection to find out what appliances you’ll need to buy and messes you’ll need to clean up.

If you are considering buying a home in foreclosure, you could possibly get a great deal on a house with a lot of potential.

Make sure you follow these tips and contact your licensed and trusted real estate professional for more information about buying a foreclosed property.

8 02, 2013

When Can You Buy Real Estate After Foreclosure?

Waiting Periods After ForeclosureIf you lost your home due to foreclosure, you probably haven’t given up on the dream of owning a new home. The good news is that a number of guidelines have changed which may allow  you an opportunity to buy that new home sooner than you think.  

There are a few guidelines that lenders follow to determine when you’ll qualify for financing after foreclosure. Arming yourself with this information may help you qualify again for a mortgage.

Foreclosure With Extenuating Circumstances

Generally, lenders will take into consideration any extenuating circumstances surrounding the foreclosure on your real estate.

Was there a death or illness that prevented you from earning money to pay your mortgage? Did you have a job transfer that came with a steep pay cut? Were you severely injured and temporarily disabled as a result?

You can add a memo that explains any lapses in credit worthiness to potential lenders. This report can be as long or as short as needed.

Many lenders will shorten the waiting period for documented extenuating circumstances. Traditionally the waiting period after a foreclosure is seven years. However, these waiting period guidelines may change and you would be best served by getting up to date information from a qualified mortgage professional.

Deed-in-Lieu of Foreclosure and Short Sale

You may be wondering what the waiting period for financing is if you have exercised a deed-in-lieu of foreclosure or successfully negotiated a short sale. Fortunately many lenders offer options if you were able to avoid an actual foreclosure.

Traditionally the waiting period for a deed-in-lieu of foreclosure can be four to seven years. If there were special circumstances surrounding the deal, you might be able to qualify in as little as two years. The lender may have certain down payment or credit score requirements as a condition of approval.

Getting financing after a short sale generally has the shortest waiting time before qualifying for a new home loan. Generally the lender will only require a two-year waiting period before they’ll approve financing. Once again, a call to a licensed mortgage professional will give you the most up-to-date information.

The good news about financing after foreclosure is that it is possible. Your dreams of owning a home can be fulfilled even if  you have experienced a foreclosure in your past.

20 12, 2012

3 Ways To Purchase Foreclosed Properties

Foreclosure signThe process of buying a foreclosed home is slightly different from the process of buying a non-foreclosure home.  If you want to invest in foreclosures, therefore, it is important to understand the different ways by which to purchase a foreclosed home.

There are three main ways to buy a foreclosed home.

Buying before the auction
Some delinquent homeowners may want to sell their homes before facing an actual foreclosure.In this instance, the homeowner, in agreement with the lender, agrees to sell the home for less than the amount owed on the mortgage.This is called a short sale. Short sales are “pre-foreclosures”, of sorts. By broadening your home search to include short sales, you can identify homes that may be sold at a discount.

Buying at the auction
Another way by which you can invest in foreclosure homes is by buying the home at auction. From area to area, the legal requirements for the sale of a foreclosed home at auction may differ. If you plan to buy at auction, you’ll want to be familiar with your area’s customary judicial proceedings.

Buying after the auction
Buying after the auction means buying bank-owned properties. This can be the most lucrative and safest means of investing foreclosure properties. This is because lenders often reduce the sales prices of their home inventory in order to “sell it quickly”. It can be expensive for banks to own foreclosed homes, and few banks are equipped for managing owned homes. Check with your local real estate agent to see what, if any, bank-owned homes are available for sale in your area.

The process of buying a distressed home is different from the process of buying a “traditional” one. Therefore, regardless of which path you follow to buy a foreclosed property, have an experienced real estate professional on your team.

18 12, 2012

Short Sales Outnumber Foreclosure Sales For Third Straight Quarter

Short sales risingForeclosure-tracker RealtyTrac reports falling foreclosure sales nationwide as banks get better at selling homes via short sale.

In its Q3 2012 report, RealtyTrac says that 193,059 homes in some stage of foreclosure were sold, accounting for 19% of all residential home sales. In addition, pre-foreclosure sales — also known as “short sales” — climbed 22% on a year-over-year basis.

For the first time since 2007, the number of short sales outnumbered the number of homes sold in foreclosure over three consecutive quarters.

The average price of a short sale home fell by 5 percent as compared to a year ago which may reflect an eagerness on the part of mortgage lenders to dispose of distressed properties before they fall into foreclosure. Foreclosures can increase a lender’s losses, and foreclosed properties be expensive to manage.

Compare the average Q3 2012 sale price of a home in short sale versus one in foreclosure :

  • Average sale price of a residential property in short sale : $191,025
  • Average sale price of a residential property in foreclosure : $161,954

It’s not just the higher home sale prices that have pushing banks to settle on short sales, either. Short sales are less costly, too. Foreclosing on a home requires banks to pay court costs, among other fees, and which positions the short sale outcome as a clear winner for many banks. 

For homebuyers , the banking industry’s shift toward short sales is welcome news.

Buying a short sale has been a notoriously slow process with a lack of defined timeline. As banks improve their distressed sales division, they’re getting faster and more efficient. This makes it “easier” for a buyer to buy a home in short sale.

However, don’t buy a short sale without the help of an experienced, licensed real estate professional.

The negotiation process is different for a short sale than with a “traditional” home purchase. Time lines are different, responsibilities are different, and purchase contract language may be different, too. The same is true for buying a foreclosure.

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