Why Are Foreclosures Dropping?

Posted by Duke Rountree on

Is Foreclosure Crisis Finally Fading?

According to research by CoreLogic foreclosures decreased by 8.4% or 130,000 in 2011. Mark Fleming, chief economist with CoreLogic, says “This is the first time in a year that REO sales (those bank-owned properties) have outpaced completed foreclosures.” There were 103 sales of bank owned homes for every 100 homes in foreclosure inventory in December 2011. Compared to November 2010 when there were 94 REO sales for every 100 in the foreclosure process.

Banks are also doing more loan modifications to prevent the foreclosure process. Banks are also encouraging the use of short sales to try and help reduce the number of foreclosure. Another reason could be banks are stricter with credit conditions and choosier about approving loan applicants, reserving approvals for mostly low-risk borrowers with low chance of default and foreclosure.

Does This Mean the End to High Foreclosure Rates?

In my opinion only time will tell. If you drive around any neighborhood in Ocala, Marion County there are still many many vacant homes unkept and due to hit the market in the future. The banks are taking their time in processing these foreclosures and we should see a steady dose of them to come for any years. There are simply to many homes vacant to say we are even close to seeing a huge drop in foreclosures.

However! Any Drop in Foreclosure Numbers is a GOOD Thing for Owners, Sellers and Neighborhoods.

The negative effects from foreclosures is far reaching and I believe the banks will soon realize it is better to work with existing struggling homeowners to refinance and reduce the principal amount owed, to qualifying homeowners, rather than short sale or foreclose. How does it make sense to remove homeowners, who are willing to stay and pay their mortgage. ONLY, to sell the property for less money to a new buyer. Can we not figure out a better way, for folks who can qualify and afford the home now at a much reduced value. Common sense is gone in today’s business world. I’M just Sayin!

“Until Next time”

 

 

Source: “Homes in Foreclosure Decline by 130,000,” CNNMoney (Feb. 8, 2012)

© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688

Florida Housing Market Bouncing Back….

Posted by Duke Rountree on

Florida Housing Market Bouncing Back….

Florida’s real estate market is entering 2012 on an upward trend, according to three leading U.S. economists. Florida Realtors Chief Economist Dr. John Tuccillo says, “Our sate is in a mini-recovery” and “sales are trending up, listing inventories have fallen, the supply of lender-related properties has stabalized, and we are seeing multiple offers on home in some local markets.”

In Fact…

Dr. Tuccillo says homes in Florida may be undervalued. “That may sound like a drastic statement,” he said. ” But a buyer who plans to own the home for 5-7 years can get some great bargains today.” Interesting statistic from South Florida I heard yesterday said at one point Miami had 9 years worth of inventory, now with decreased number of homes on the market and high buyer activity has dropped that number to less than one year. The South Florida economy is growing  based on relationships with Latin America and the Carribbean. Dr. Lawrence Yun says, “Don’t be surprised to see a gain in home prices in the Miami and Naples markets in the next 18 months.””From there, the recovery is likely to roll northward to Central Florida and then North Florida.”International buyers are driving the market in South Florida and other areas of the state.”

What about Ocala….

We are seeing positive signs locally including a drop in unemployment and reduced housing inventory. Banks are slowly releasing foreclosed/REO homes on the market and this is creating a negotiating competition between buyers. Many of the more inexpensive homes are only on the market for 1-2 weeks. We are still facing challenges getting buyers qualified for financing, however with the USDA loan programs and FHA there is great opportunity. Another key factor is the high price for rentals and availability. In todays market you can buy a home for the same or lower than you can rent. The benefits of buying to renting can create tax benefits, provide stability because there is no landlord who can ever raise your rent or sell the home without your approval.

If you are interested in receiving a monthly “Market Trend Report” please call, text, or email me anytime.

“Until Next Time”

Florida Still Highest Among Foreclosures

Posted by Duke Rountree on

Florida Still Highest Among Foreclosures

Almost 1 in 4 mortgages are either past due or already in foreclosure during the second quarter, according to Mortgage Bankers Association. We also have the highest inventory of homes in foreclosure currently at 14.4%. The national average delinquency rate was 8.44% in the second quarter and up slightly from the first quarter.

Foreclosures continue to be found in just a few states, with ONLY five states accounting for 52 percent of the foreclosure inventory in second quarter.

1. Florida (14.4%)

2. Nevada (8.2%)

3. New Jersey (8%)

4. Illinois (7%)

5. Maine and New York (5.5%)

 

Source: Realtor Magazine August 23, 2011 http://realtormag.realtor.org/daily-news/2011/08/23/which-state-has-highest-foreclosure-inventory

What is REO? What Effect Will REO Have on Housing Recovery?

Posted by Duke Rountree on

Real estate owned or REO…is a class of property owned by a lender typically a bank, government agency, or government loan insurer, after an unsuccessful sale at a foreclosure auction[1]. When a lender/ beneficiary finishes the foreclosure process the property can then be listed as an REO property.That is the technical definition, however most people know them as foreclosures. Most of the larger banks and government institutions have REO/Asset Management companies who handle departments that field bids and offers, oversee upkeep, and handle sales. Most REO properties are listed with local MLS(Multiple Listing Services by REALTORS for marketing properties.) Bank properties are typically in need of repair and/or maintenance and the cost of these items is the responsibility of the mortgage servicer(bank or government agency.)

What Effect Will REO Have on Housing Recovery?…The nation’s largest banks and mortgage holders currently own over 872,000 homes which were repossessed through foreclosure or other means. That is nearly 2x the amount foreclosed on in 2007, when the financial crisis began. Unfortunately, that may not be the worst news because the same lenders are ready to repossess over 1,000,000 more homes according to RealtyTrac reports. The huge number of currently banked owned foreclosures and the large pending amount are causing economist to fear a double dip in the real estate market. According to Treep, a leading real estate research firm, will force the lender-owned homes to sell for deep discounts over the next 2 years and at a cost of almost $40 billion in losses. The opinion of REALTORS is that lenders are overwhelmed with the huge inventory which many times the homes are outdated, often overpriced by 10% or more and lenders take to long to accept or reject the offer. The largest problem is it takes over 400 days to foreclose and on average 176 days to sell.

My personal opinion is we are a long way from a housing recovery being done and it will continue to be a buyers market for some time to come. Marion County has some of the best prices in the state. Many can buy a home for less than the cost to rent in the area. Want to learn more or have questions, please call, text, chat or email me.

“Until Next Time”


[1] William Roark (2006), Concise Encyclopedia of Real Estate Business Terms ISBN 0-7890-2341-5

Source; “As Lenders Hold Homes in Foreclosure, Sales Are Hurt, New York Times May 23,2011