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Archive for the ‘FORECLOSURES’ Category

Most of us know the housing bubble of 2002-2006 and the subsequent housing crash that followed in 2007 was caused by the deregulation of the lending industry by the government, which brought into the market many sub-prime lenders offering no-downpayment-interest-only-loans,  ARM loans and option ARM loans, and other “exotic” loans.

This easy credit and availability of money artificially increased demand for homes, which in turn artificially increased home prices until they became unsustainable, which led to the housing crash – all in a span of a few short years. (more…)

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Foreclosures can offer big bargains, but buyers need to be careful that they don’t get over their heads in purchasing a home that may need more repairs than they bargained for.

Foreclosures are usually sold as-is, and homes that are left vacant standing too long can have a lot of maintenance problems.

Real estate experts suggest buyers consider the following questions:

1. How long has the home been vacant? Be cautious of a foreclosed home that has stood vacant for more than a few weeks or had its utilities shut off a long time. A home can deteriorate quickly when heating, cooling, electricity, and running water have been turned off for awhile.

2. How old is the home? Homes that are more than 50 years old may have a failing plumbing system or inadequate electrical wiring.

3. How does the home look? Are there broken windows, gutters hanging down, or damaged siding?  Buyers need to trust their instincts. If the house looks bad from the outside, it’s probably equally bad or worse inside.

4. Is there anything missing? Sometimes former owners remove anything of value from the home, such as built-in light fixtures, bathroom tile, water heaters, air-conditioning units, and hardwoods, says Bill Jacques, president-elect of the American Society of Home Inspectors.

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Housing experts encourage buyers to get a home inspector to look at the property, even if it is sold as-is, so that home buyers know any repairs needed and cost estimates before they purchase the home.

“Buying a bank-owned home gives you the opportunity to enter the market at a very low price level,” says Dorcas Helfant, a past president of the National Association of REALTORS®. “You can find terrific values among foreclosures, especially if they’re not in too bad shape. But, remember, these houses are discounted for a reason.”

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SOURCE: “Foreclosed Homes May Need Extensive Repairs,” The Oklahoman

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For the fifth consecutive year, Nevada continues to have the highest foreclosure rate in the country, despite a 31 percent drop in the state’s foreclosure activity from 2010 to 2011, RealtyTrac reported.

Several states continue to see a large amount of foreclosures, which are putting downward pressure on overall home prices.

The states with the highest foreclosure rates for 2011 are:

  1. Nevada: 6% (1 in 16 housing units received at least one foreclosure filing in 2011)
  2. Arizona: 4.14% (or 1 in 24)
  3. California: 3.19% (or 1 in 31)
  4. Georgia: 2.71% (or 1 in 37)
  5. Utah: 2.32% (or 1 in 43)
  6. Michigan: 2.21%
  7. Florida: 2.06%
  8. Illinois: 1.95%
  9. Colorado: 1.78%
  10. Idaho: 1.77%

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Nationwide, 1 in 69 housing units or 1.45 percent of home owners received at least one foreclosure filing during 2011, which is down from 2.23 percent in 2010 according to RealtyTrac.

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SOURCE: RealtyTrac

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Underpricing a home is NOT a popular idea with most home sellers.

However, sometimes it is the only option available in this difficult market – especially if the homeowner carries TWO mortgages, one on the old home they are trying to sell and another mortgage on their new home.

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While home sellers are not too happy about the idea of underpricing, housing experts in an article at CNNMoney say that underpricing a home by 10 percent may help it sell faster. And while sellers may lose out on thousands from the sale, they likely will avoid months of carrying costs from the home lingering on the market to offset that loss.

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The high inventory of foreclosures on the market is making it difficult for sellers to compete against these ultra-low prices. Therefore, “listing your home for less than comparable ones in your neighborhood is the best way of unloading it as quickly as possible,” according to the article.

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You could even attract a bidding war, says Steve Murray, editor of the Real Trends newsletter.

Furthermore, it may take the property a lot less time to sell. For example, a home underpriced by 10 percent may sell in a few days rather than in several months to one year.

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For home owner who carries two mortgages, underpricing by 10% may be the winning strategy in the long run.

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SOURCE: CNNMoney

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The housing crisis will spark a wave of lawsuits filed by lenders seeking to recoup loses on home sales and foreclosure auctions that do not return enough money to pay the mortgages in full, according to real estate and legal experts.

Experts predict that mortgage companies will begin to sue home owners in the next two years, including borrowers who ransack a house that has been lost to foreclosure and those who walk away from “underwater mortgages,” with hopes of discouraging others from such behavior.

Lenders are unlikely to target borrowers who negotiate in good faith or have defaulted on their home due to job loss or other unforeseen circumstances; other borrowers could be hounded by collection agencies that have purchased their mortgage debt from their lender.

SOURCE: RISMedia

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