Tag Archives: foreclosure

Owners Missing Money at Foreclosure Auctions

December 24, 2016 jd

Because there’s strong demand for affordable residences in markets that are seeing home prices surge, some homes sold at foreclosure auctions are netting more than what the lender is owed. Once debts, liens, and fees are paid off, the home owner who’d fallen behind in their mortgage payments is entitled to the remainder. But here’s the kicker: Many home owners don’t realize their rights, which means much of the money is going uncollected.

For example, Denver County, Colo., officials say they have nearly $1.5 million in uncollected surpluses from the sale of about 50 foreclosed homes.

“In the past, people who lost their homes to auctions were typically underwater. [Now] prices have risen so that real estate investors, especially at auctions, are sometimes willing to pay more than what the [homeowner] lost it for,” says Brandon Turner, author of “The Book on Rental Property Investing.”

Portland, Ore., Denver, Seattle, and Miami are all places where home prices are rising fast, and struggling homeowners may find more windfall profits in foreclosure auctions.

“Denver is one of the hottest real estate markets in the nation right now,” says Mica Ward, spokeswoman for the public trustee of Denver County. “So when a home does have to sell at a foreclosure auction, we’re consistently seeing that the home is selling for more than what is owed.” She estimates that about 80 percent of foreclosure auctions in Denver County result in surpluses over the original debt. She returned up to $169,000 to one foreclosed homeowner this year following an auction.

Source: Realtor.com

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Real Estate

‘Zombies’ Make Up 21% of Foreclosures

June 30, 2014 jd

Photo courtesy of: https://www.overseassingaporean.sg/public/forum/upload/index.php?/topic/3893-going-home/

Zombie foreclosures are still haunting the housing market, representing one in every five foreclosures nationally, according to RealtyTrac, a housing data firm. “Zombie foreclosure” is a term coined to describe properties where the foreclosure process has been started and the home owner vacates, but the foreclosure has never been completed. As such, the distressed home owners who vacate eventually find they still own the home, and are often unaware they are still responsible for it.

Find out how the Consumer Financial Protection Bureau is targeting zombie foreclosures.

The vacated properties can become eyesores in neighborhoods and drive down nearby property values. They also take a big chunk out of local government revenue in the form of unpaid property taxes. RealtyTrac estimates that more than $400 million in property tax revenue is likely delinquent due to zombie foreclosures. Still, the zombie foreclosure rate has shown some improvement, falling 7 percent compared to the first quarter of this year and dropping 16 percent from year-ago levels.

Florida has the highest number of zombie foreclosures, accounting for more than one-third of all zombie foreclosures nationwide. New York, New Jersey, Illinois, and Ohio also have some of the highest numbers of zombie foreclosures across the country.

“Most of these states have seen an increase in new foreclosure activity over the past year, creating a more fertile breeding ground for zombie foreclosures,” says Daren Blomquist, vice president at RealtyTrac.

Some states, such as Florida and Illinois, are looking to combat zombie foreclosures by weighing legislation that could help “fast track” foreclosures and move the abandoned properties through the system more quickly, RealtyTrac reports. New York is also considering legislation that would make lenders responsible for the upkeep of zombie foreclosures. Some local governments—such as in Cleveland and Detroit—also are creating land banks that would include zombie foreclosures, allowing city officials to rehab properties or demolish them.

Where Zombie Foreclosures Are Highest

On a metro level, the seven markets with the highest number of zombie foreclosures, according to RealtyTrac’s second quarter report, are:

New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa.
Miami-Fort Lauderdale-Pompano Beach, Fla.
Chicago-Naperville-Joliet, Ill.-Ind.-Wis.
Tampa-St. Petersburg-Clearwater, Fla.
Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.
Orlando-Kissimmee, Fla.
Jacksonville, Fla.

Meanwhile, California posted the largest drop in zombie foreclosures, down 57 percent in the past year. Other states posting large decreases are Arizona, Nevada, and Washington.

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Real Estate

Had Your House Foreclosed? You May Have a Second Chance for Homeownership Soon

December 2, 2013 jd

Photo courtesy of Highland Home Inspections. http://highlandhomeinspections.net/contact-us.php.

Those who lost their home due to financial hardships may get another shot at being home owners again soon. The Federal Housing Administration recently announced that they would shorten the waiting period for qualified borrowers who’ve had a bankruptcy, foreclosure, deed in lieu of foreclosure, or short sale who want to buy a home again. Under the FHA’s Back-to-Work program, home owners must show that they have their finances back in order and they must receive counseling from a HUD-approved agency. Those who meet the requirements can apply to buy a property in as little as a year.

“The Back to Work program is a great opportunity for us to help those impacted by the recent housing crisis,” Heather Shanahan, a representative with a HUD-approved housing counseling agency called Springboard, told HousingWire. “Our goal in our counseling sessions is to enable the borrower to better understand their loan options and the obligations.”

Counselors provide borrowers with a customized action plan that reflects household budgets and shows borrowers how they can meet their financial obligations to prevent default again in the future.

The Back-to-Work program is also helping borrowers purchase their first homes, in some cases.

Source: “Springboard helps formerly distressed borrowers get back on track,” HousingWire (Nov. 19, 2013)

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Real Estate

Home Owners Equity Rising Above Water

September 8, 2013 jd

Jenga Style Homes Photo courtesy of Pleated-jeans.com

In the next 15 months, 8.3 million home owners — about 18 percent of home owners who have a mortgage — are expected to gain enough equity to be in a better position to sell their homes, according to RealtyTrac’s September report on home equity.

“Steadily rising home prices are lifting all boats in this housing market and should spill over into more inventory of homes for sale in the coming months,” says Daren Blomquist, vice president at RealtyTrac. “Home owners who already have ample equity are quickly building on that equity, while the 8.3 million homeowners on the fence with little or no equity are on track to regain enough equity to sell before 2015 if home prices continue to increase at the rate of 1.33 percent per month that they have since bottoming out in March 2012.

The 8.3 million of home owners have a range of 10 percent negative equity to 10 percent positive equity, according to RealtyTrac. Home owners with low equity may face challenges in selling a home due to the cost of the sale and having a down payment on a new home. As equity rises, more home owners are in the position to sell their home without having to resort such actions as a short sale.

The report also notes that one in four home owners in foreclosure also were found to have positive equity. Home owners with equity may have a better chance at selling their homes before letting the foreclosure process run its course, Blomquist says.

But that’s “assuming they realize they have equity and don’t miss the opportunity to leverage that equity,” Blomquist says. “Even home owners deeply underwater have reason for hope, with about 150,000 each month rising past the 25 percent negative equity milestone — although it will certainly take years rather than months before most of those homeowners have enough equity to sell other than via short sale.”

Source: National Association of Realtor©

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Real Estate

Foreclosures Rise in June, But See Big Drop for Year

July 31, 2013 jd

Completed foreclosures rose 2.5 percent in June from May, CoreLogic reported Tuesday. Its report follows another recent one from Lending Processing Services that showed nearly a 10 percent rise in the national delinquency rate in June compared to May.

About 1 million homes are in the foreclosure inventory as of June, CoreLogic reports. That does mark a 28 percent decrease in the foreclosure inventory compared to last year.

Forty-nine states reported a year-over-year decline in foreclosure rates in June.

“The housing market is clearly on the mend, but we expect the ultimate conclusion of the present housing down cycle to be another several years away,” says Anand Nallathambi, president and CEO of CoreLogic.

CoreLogic reports the five states with the largest foreclosure inventories — as a percentage of mortgaged homes — in June were:

Florida: 8.6%
New Jersey: 6%
New York: 4.8%
Connecticut: 4.2%
Maine: 4.1%

Source: “Foreclosures Increase Again in June – CoreLogic,” Mortgage News Daily (July 30, 2013)

Real Estate

Foreclosures Down 29% From Year Ago

July 10, 2013 jd

Photo credit: http://www.freeimageslive.com/galleries/buildings/structures/pics/oldbridge.jpg

Foreclosures are continuing a steady fall, as home prices rise and the housing market picks up nationwide.

About 1 million homes were in some stage of foreclosure in May, down from 1.4 million in May 2012, a 29 percent decline, according to CoreLogic’s latest foreclosure report. As of May, the foreclosure inventory represented 2.6 percent of all homes with a mortgage — down from 3.5 percent a year prior.

There were 52,000 foreclosures completed nationwide in May, down 27 percent year over year. However, the numbers are still elevated compared to what’s considered normal for the market. Prior to the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month between 2000 and 2006, according to CoreLogic.

Since September 2008 — the start of the financial crisis — about 4.4 million foreclosures have been completed, CoreLogic’s data shows.

Meanwhile, shadow inventory is down 34 percent from reaching its 2010 peak. It was under 2 million units in April, representing a 5.3 month supply.

“We continue to see a sharp drop in foreclosures around the country and, with it, a decrease in the size of the shadow inventory,” says Anand Nallathambi, president and CEO of CoreLogic. “Affordability, despite the rise in home prices over the past year, and consumer confidence are big contributors to these positive trends. We are particularly encouraged by the broad-based nature of the housing market recovery so far in 2013.”

The stock of seriously delinquent homes, which is the main driver of shadow inventory, is at the lowest level since December 2008, adds Mark Fleming, chief economist for CoreLogic. “Over the last year, it has decreased in 42 states by double-digit figures, resulting in rapid declines in shadow inventory for the first quarter of 2013,” Fleming says.

The following five states account for nearly half of all completed foreclosures nationally and had the highest number of completed foreclosures in the last 12 months ending in May:

Florida
California
Michigan
Texas
Georgia

Source: CoreLogic

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Real Estate

Large Number of Foreclose Homes Are Vacant

June 21, 2013 jd

Is anyone home? Apparently not in a large share of foreclosed homes. Twenty percent of foreclosures nationwide are abandoned by their owners and left vacant, according to RealtyTrac.

It’s important to move vacant foreclosures quickly so that they don’t negatively impact surrounding real estate values, says Daren Blomquist, vice president of RealtyTrac. Bank of America, GMAC, Chase, Wells Fargo and Citi hold the highest number of vacant foreclosures.

Twenty-nine percent of the vacant foreclosed homes are priced below $50,000; 25 percent are between $50,000 to $100,000; and 12 percent are in the $1 million-plus range, according to RealtyTrac.

The states with some of the highest percentages of vacant foreclosures are:

Indiana: 32%
Oregon: 28%
Nevada: 28%
Washington: 27%
Georgia: 27%

Still, “even if all these homes flooded the market simultaneously, they would likely not cause the once-feared double dip in prices given supply constraints from non-distressed sellers and stronger demand,” Blomquist says.

Source: “RealtyTrac: 20% of Foreclosures Remain Vacant After Owner Departs,” HousingWire (June 20, 2013)

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Real Estate

Foreclosure Activity Back on the Rise

June 15, 2013 jd

Foreclosure filings—which include default notices, scheduled auctions, and bank repossessions—increased 2 percent in May, rising from a 75-month low in April, according to the latest foreclosure report from RealtyTrac. Still, foreclosure filings are down 28 percent from a year ago.

The May increase was largely attributed to an 11 percent increase in bank repossessions. Foreclosure starts also ticked up 4 percent in May over last month, with 26 states posting increases, according to the report.

“Foreclosure activity continued to bounce back in some markets where it may have appeared the foreclosure problem had been knocked out by an aggressive combination of foreclosure prevention efforts over the past two years,” says Daren Blomquist, vice president at RealtyTrac. “Places like Nevada, where foreclosure starts increased to a 20-month high, and Maryland, where overall foreclosure activity increased to a 33-month high. Still, the emerging housing recovery has strengthened most local markets enough to quickly shake off a few more blows from these nagging foreclosures.”

The top foreclosure rates in the country were in Florida, Nevada, and Ohio. Florida saw a 20 percent increase in foreclosure activity in May, accelerating it to the highest foreclosure rate in the country for the month. One in every 302 Florida households received a foreclosure filing in May—nearly triple the national average.

After 27 months of decreases, Nevada foreclosure activity rose in May, with one in every 305 households receiving a foreclosure filing. The increase was driven by an 81 percent year-over-year increase in foreclosure starts, which reached a 20-month high in May, RealtyTrac reports.

Ohio posted the third-highest foreclosure rate in the country, where one in every 584 households received a foreclosure filing during May. Still, that’s a 27 percent decrease from a 31-month high the state reached in April.

Source: RealtyTrac

Real Estate

It’s Not Over: Report Warns Shadow Inventory Threat Remains

June 3, 2013 jd

Home for sale cheap, might need a little paint. Photo credit: http://funnychill.com/ — Home for sale cheap, might need a little paint.
Photo credit: http://funnychill.com/

Foreclosures have been falling in recent months, but two government watchdogs warn that the foreclosure crisis isn’t over yet. About 1.7 million borrowers have missed more than one payment on their government-backed mortgages, according to a newly released report by the inspectors general of the Federal Housing Finance Agency and Department of Housing and Urban Development.

The shadow inventory is made up of loans that have been delinquent for at least 90 days. If these delinquent loans become foreclosures, they could pose significant financial challenges to mortgage giants Fannie Mae, Freddie Mac, or other federal housing agencies, the report notes.

“Not only are current REO inventory levels elevated … they may rise over the next several years depending on the number of shadow inventory properties that are ultimately foreclosed on,” the report stated.

According to the report, the shadow inventory is more than seven times the inventory of REOs that Fannie Mae, Freddie Mac, and HUD currently own.

“Even a fraction of the shadow inventory falling into foreclosure could considerably swell … inventories of REO properties,” the report notes.

Source: “‘Shadow’ homes could burden U.S. housing agencies: report,” Reuters (May 31, 2013)

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Is The Foreclosure Crisis Disappearing?

April 24, 2013 jd

Foreclosures are falling quickly as more borrowers keep up with their mortgage payments and banks complete more loan modifications or approve short sales to avoid foreclosures on their books.

For the first time since 2008, the number of borrowers who are behind on their payments or in foreclosure dropped below 5 million, according to a new report reflecting March data by Lender Processing Services.

The number of mortgages in foreclosure dropped to below 1.69 million in March, which marks the lowest level in nearly four years and a drop of nearly 20 percent compared to one year ago.

About 3.4 percent of all U.S. mortgages were in foreclosure by the end of March, which is a decrease from 4.2 percent a year ago, Lender Processing Services reports.

In March, about 6.6 percent of all borrowers were in some stage of delinquency, excluding those in foreclosure. That percentage is down by 3 percent from a year ago, but is still high by historical standards. Prior to the housing crisis, about 5 percent of all borrowers were delinquent on their mortgages and 1 percent of loans were in foreclosure, LPS reports.

Source: “Bad Mortgages Hit Lowest Level Since 2008,” The Wall Street Journal (April 23, 2013)

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