The Gate Arty Blog - Foreclosure Archive
National Home Sales Report
Saturday, February 13, 2010 - By Gate Arty
According to the latest survey by the National Association of Realtors (NAR), sales increased from the third quarter in 48 states. Of those states, 32 realized double-digit gains. Existing-home sales, including single-family and condo, jumped 13.9 percent to a adjusted annual rate of 6.03 million in the fourth quarter from 5.29 million in the third quarter, and are 27.2% above the 4.74 million-unit level in the fourth quarter of 2008. It is believed that distressed properties accounted for 32% of fourth quarter transactions. This is a decrease from the 37% a year earlier.
del.icio.us
Reddit
FacebookJanuary 2010 Foreclosure Report
Friday, February 12, 2010 - By Gate Arty
RealtyTrac reports that foreclosure rates fell in January compared to December, but remained sharply higher than a year ago. This is thought to be a temporary incident most likely a product of the holiday season & office closings. The number of Americans receiving foreclosure notices was down 9.7 percent in January from December 2009, but 15 percent higher than last January. All told, 315,716 properties generated a foreclosure notice. That means one in every 409 homes in America received a foreclosure notice. The top five states in foreclosures respectively are: Nevada, Arizona, California, Florida, & Utah. Which sate had the least? South Dakota is the winner. Foreclosures don't appaer to be going away anytime soon as a report found one in five US mortgages were “underwater" during the fourth quarter.
Tags: , foreclosure, real estate
90 Day FHA Rule is Waived
Wednesday, January 20, 2010 - By Gate Arty
HUD has taken a major step to stabilize the real estate market by waiving the “90 day flip rule” effective February 1st, 2010. Currently, FHA prohibits insuring a mortgage on a home owned by the seller for less than 90 days. Originally the 90 day rule was put in place to protect FHA borrowers against predatory practices of "flipping" where properties are quickly resold at INFLATED prices to unsuspecting borrowers. This act will give FHA borrowers access to a broader array of recently foreclosed properties. The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities. To qualify these conditions must be met:
• All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
• In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.
• The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.
This waiver will be a major coup for real estate investors because the pool of available buyers is substantially increased. Before, investors had to wait 90 days before listing a property in MLS or hold a property for 90 days before selling to a FHA buyer – something most are unwilling to do because of holding costs & risks associated with delayed closings. This should be a major shot in the arm & should drastically reduce the “days on market” for home inventory.
Tags: buying, fha, home value, HUD, mls, mortgage, real estate. real estate investor, selling
Growing Number of Foreclosures
Tuesday, January 12, 2010 - By Gate Arty
Statistics from Lender Processing Services indicate that as of November 30th 2009, one in every 7.5 homeowners either fell into delinquency or foreclosure. The total number of delinquencies reached a record high of 9.97%, a 5.46% increase from the previous month and a 21.29% increase from November 2008. Loans falling into more severe delinquent categories reached 5.01% through November, compared to 1.52% of loans improved toward a current status. That's compared to November’s mortgage monitor report, when 4.02% of current mortgages through December 2008 fell into delinquency by October 2009. The states with the most non-current loans were Florida, Nevada and Mississippi. Those with the fewest were North Dakota, South Dakota and Alaska.
High-Water Mark for Foreclosures
Friday, October 16, 2009 - By Gate Arty
Foreclosures are at an ALL-TIME HIGH. In the 3rd quarter of this year 937,84 homes received a foreclosure letter. How do you put this in perspective? Well, that means that 1 in every 136 homes were in foreclosure. That’s a 5% increase from the 2nd quarter. It’s also a whopping 24% leap from this point in 2008! These numbers represent the worst 3 month stretch in terms of foreclosures ever. The foreclosure toll this year is reported to be 623,852 & climbing. Perhaps with these numbers on the rise, banks will begin being more cooperative with short-sales? Wouldn't that be rational? Either way, the real estate investors will be back in full-force to pick up REO properties & pre-foreclosures that are indeed priced to sell. Check out investing opportunities at MidFloridaREO.com.
High-End Mortgage Foreclosures
Tuesday, October 13, 2009 - By Gate Arty
Recent statistics have shown that the trend of foreclosures is now hitting the top-tier of mortgages. In June 30% of foreclosures involved homes that were in the top 1/3 of local residential values. When the foreclosure crisis began 3 years ago, this figure was around 16%. On the opposite end of the spectrum, the bottom 1/3 of the residential market only accounts for 35% of foreclosures now. This figure is way down from 55% in 2006.
Tags: finance, foreclosures, home values, mortgage, statistics
Mortgage Deliquency Rises
Thursday, August 20, 2009 - By Gate Arty
The mortgage delinquency rate, which is defined as the percentage of mortgage holders who are over 60 days or more late on their payments, rose for the tenth consecutive quarter (thru 2nd QTR, 2009). It is now at an all-time high of 5.81%. How should we put this figure in perspective? Well, that is an increase of 65% from the same time period last year. Nevada, Florida, California, & Arizona led the way with the highest foreclosure rates. North & South Dakota and Alaska had the lowest rates.
Don't forget to visit Central Florida's premier real estate website for all your Lakeland Real Estate needs including Lakeland Foreclosures
Tags: lakeland bank foreclosures, lakeland fl foreclosures, lakeland florida foreclosures, lakeland forclosure homes, lakeland foreclosed homes, lakeland foreclosed homes for sale, lakeland foreclosure, lakeland foreclosure listings, lakeland foreclosures cities in polk county, lakeland home foreclosures, lakeland houses for sale, lakeland real estate, pre-foreclosure, real estate foreclosures lakeland florida
Foreclosure News - 2nd Quarter 2009
Thursday, August 13, 2009 - By Gate Arty
Foreclosures continue to be the driving force in today’s real estate market. In the 2nd quarter, foreclosures & distressed sales accounted for over a third of all sales! According to recent statistics, the rate of foreclosures jumped another 7% in July from June. This also represents a 32% increase from the same time period last year. More than 360,000 homes with mortgages received foreclosure filings in July. This was the highest point since January 2005. California, Florida, Arizona, & Nevada accounted for an astounding 57% of July foreclosures nationwide! Many factors contribute to the tidal wave of foreclosures like: tighter lending guidelines & unemployment, but chiefly responsible is the negative home equity that many homeowners now have. Many homeowners are finding it “easier” to go into foreclosure than ride out the market waiting for values to rebound or restructure the loan.
Homes Sales Increase Again
Thursday, August 13, 2009 - By Gate Arty
Homes sales increased 3.8% in the 2nd quarter of 2009 from the 1st quarter. The annual adjusted rate was 4.76 million in the 2nd quarter & 4.58 million in the first quarter. What is accounting for this rise in activity? No doubt, the great values in the housing market are beginning to capture the attention of prospective home buyers. The $8000 tax credit that will expire on November 30th is also a major motivation. The median sales price in the first quarter was $174,100, which represents a decrease of 16% below this time one year ago. “With low interest rates, lower home prices and a first-time buyer tax credit, we’ve been seeing healthy increases in home sales, which are a hopeful sign for the economy,” said Lawrence Yun, NAR’s chief economist.
Homes Getting Smaller
Wednesday, August 12, 2009 - By Gate Arty
We have all heard that the demand for new home construction has shrunk due to home buyers targeting foreclosures & short sales rather than building new homes. Did you know, however, that the actual size of new homes is shrinking as well? I mean literally. The U.S. Census Bureau reports that the median size of new homes has dropped to 2,065 square feet. This represents a 7% drop in size compared with this time last year. Most industry professionals attribute the reduction in home size to the economic downturn. “Home size gains flatten out or decline during recessions, and we're in the midst of the most serious housing recession in decades," said Kermit Baker, the chief economist for the American Institute of Architects.
Momentum for Home Sales
Tuesday, August 04, 2009 - By Gate Arty
The Natiional Association of Realtors has reported that the pending home sales index rose again for the fifth consecutive month. It rose 3.6% (94.6 from 91.3) in June from May. The pending home sales index tracks signed home purchase contracts and is considered a leading indicator of activity. What is driving this upward momentum? Simply put, distress sales (like short-sales) & foreclosures continue to drive real estate prices downward to levels where buyers can no longer ignore the values. Most people consider this a "once in a lifetime" buyer's market. Let's look at some of the positives: record low interest rates, $8000 tax government credit, large selection of properties available for sale, & discounted property values. The time to buy is NOW!
Foreclosure Report - June 2009
Friday, July 17, 2009 - By Gate Arty
It appears that the wave of foreclosures is still building. Nationwide, there were 1.5 million foreclosures in the first half of 2009 alone. This represents an increase of 15% from last year. Foreclosure filings increased an astounding 33% in June from the year prior. Nevada is still the clear leader in foreclosures. Their foreclosure rate for the first half of 2009 was well over 6%. Rounding out the top 5 were Arizona, Florida, California, and finally Utah.
Tags: business, florida real estate, foreclosure
New Construction Sales Down
Friday, June 26, 2009 - By Gate Arty
Sales of new construction homes fell 0.6% in May from April. The median home sales price was $212,600 in April, but rose to $221,600 in May. Meanwhile inventories of these new homes continue to fall to 292,000 units for the month of May. If sales were to hold at their current pace, it would take approximately 10 months to completely clear out the inventory of unsold homes. Builders have experienced intense competition & pressure from the sale of distressed properties & foreclosure that drive prices down, overall.
Neighborhood Stabilization Program
Wednesday, June 24, 2009 - By Gate Arty
The Obama administration has made up to $6 billion available for redevelopment of foreclosed homes & distressed properties. The Neighborhood Stabilization Program is intended to help communities that have suffered from foreclosures & abandonment, & the hope is that it will facilitate purchases & neighborhood revitalization. Nearly $4 billion of the proposed NSP funding will come from the Economic Recovery Act of 2008. Funds will be used for activities including: redevelopment of foreclosed residential properties, purchase of abandoned properties, demolition of properties, & financing programs. Current guidelines state that funds will go to households earning less than 120% of the median income of the area, with 25% of the funds going towards households earning less than half the median.
Foreclosures in May 2009
Friday, June 12, 2009 - By Gate Arty
Foreclosure filings dip for the month of May. RealtyTrac, a national leader of foreclosure data, announced that filings fell over 6% from April to May. Although a total of 321,480 properties received default notifications, which represents am 18% increase from a year ago, it is the smallest annual gain since mid-2006. There is a silver lining! Florida is still in the Top 3 nationally in foreclosures. Nevada has the most, followed by California. To put it in perspective, on average there is 1 foreclosure per 398 households nationally. In Nevada, that number is 1 in 64. That is 6 times the national average! California has 1 in 144 & Florida has one in 148.
Tags: business, florida real estate, foreclosure
Foreclosure Property Search Made Easy
Friday, June 12, 2009 - By Gate Arty
When real estate is discussed nowadays, it seems as if the topics foreclosures & short sales are never far behind. Government and Bank-owned foreclosures offer tremendous home-buying opportunities for investors of all types. These foreclosures are called REO (Real Estate Owned) properties. These distress sales have the savvy investors licking their chops as property values are once again affordable, & instant equity is attainable on a large scale. Now the only challenge investors have is actually finding & identifying great values underneath the mountains of available homes for sale. Well, if you are searching for homes in Central Florida, a new website, midfloridareo.com, has made it easy. If you are considering buying an investment property, or simply looking for a good bargain, I suggest checking out this site.
Market Activity Affected by Economy
Wednesday, May 27, 2009 - By Gate Arty
As the unemployment rate hovers around 9%, most economists expect that the rate of foreclosures will account for approximately 60% of mortgage defaults this year alone. The next wave of foreclosures is expected to include not only the “sub-prime” mortgages, but also those who have been traditionally financially healthy, but have been affected by job-loss. As a result of these foreclosures, housing prices are expected to decline overall. Do not expect to see price declines at ALL price points however. Many realtors have expressed that in some of the moderate price ranges, prices have become so attractive that buyers are jumping back into the fray in waves. In many instances buyers & sellers are once again involved in “multiple offer negotiations.” This has been scarce since the real estate boom of 2006. The home price decline that has resulted from the increasing number of foreclosures, tighter lending standards, & large supply of unsold inventory will eventually spur activity. With mortgage interest rates still at all-time lows, many buyers are viewing NOW as the time to act upon golden buying opportunities. According to Standard & Poor's/Case-Shiller Home Price Indices, home prices in the U.S. fell by 18.7% in March from a year earlier.
Tags: buying a home, economy, finance, home prices, mortgage, real estate, realtors, selling a home
Foreclosures Jump in April
Wednesday, May 13, 2009 - By Gate Arty
April was a huge month for foreclosures. RealtyTrac, an internet foreclosure marketing website, reported that 1 in every 374 homes in the United States received foreclosure filings in April. Foreclosures spiked an overwhelming 32% in April. An astounding 10 states accounted for 75% of all the foreclosure activity. What is your foreclosure top 10?
1. California with nearly 100,000 filings.
2. Florida
3. Nevada
4. Arizona
5. Illinois
6. Ohio
7. Michigan
8. Georgia
9. Texas
10. Virginia
Tags: business, florida real estate, foreclosure
Building Permits Down Locally & Nationally
Thursday, April 30, 2009 - By Gate Arty
It was a case of good news . . . bad news for local builders in Polk County when we review their March 2009 numbers. The good news? Well, the month of March marked their peak for the entire year. The total permits were 102 which was up from 89 in February and 80 in January. The 102 permits represent a 35% decrease from the previous year and marked the lowest March total since 1995. When you compare these numbers on a nationwide scale, they look quite healthy, though. Nationally, housing starts fell almost 50% in March year-on-year. They slid approximately 11% from February 2009. Builders across the nation are fighting to compete with the falling prices of distressed properties & foreclosures & tightening of available credit from the banking industry.
Housing Vacancy
Monday, April 13, 2009 - By Gate Arty
The United States Cencus Bureau has reported that one in every 9 homes in the nation is sitting vacant . Leading economists are predicting that this won't change for at least several more years. Take this math into consideration . . . . between the years 2002 until 2007, the number of housing units increased by a whopping 8.65 million. By comparison, the number of households only increased by 6.7 million. Even if you factor in an estimate of 500,000 homes being torn down or lost, that still leaves over 1.3 million homes! Now those are scary numbers.
Tags: , cencus, homes, housing, us economy
Foreclosure Search
Tuesday, March 10, 2009 - By Gate Arty
Like searching the web for new property listings? Statistics indicate you are a part of a growing segment of consumers that make their initial property research online. Recent studies indicate that 97% of buyers search for real estate information on the internet first! That's even before they contact a licensed professional REALTOR for assistance. Well here at gatearty.com, we have added a new feature that we are very excited about. With the overwhelming influx of foreclosures in today's market, there is increased demand for information on new foreclosures. Now you can find them! With our MAP SEARCH feature, you can specifically identify "FORECLOSURES" as a search function. So you can search & receive e-mail notifications once a property comes on the market that meets your specifications. Of course the most up-to-date information is available thru contact with your REALTOR, as the MLS database will feature the properties the instant they hit the market.
More Foreclosures
Wednesday, March 04, 2009 - By Gate Arty
National filings of foreclosure exceeded 3 million in the 2008. Sound like a lot? Let's put this into some context. That figure represents a staggering 81% increase from the already trying year in 2007. What's even worse that that is it's an astonishing 225% increase over 2006. If you are an investor looking for the "PERFECT" time to jump into the market, that time is NOW! With mortgage rates as low as they are, it is the perfect storm for the savvy investor or entrepreneur. The bold buyers must seize the opportunity because markets like this only come around once in a great while.
Freddie Mac . . . your landlord?
Friday, January 30, 2009 - By Gate Arty
Freddie Mac announced today that it would permit homeowners who have lost their home to foreclosure to actually turn around and rent them back from Freddie Mac. "Keeping foreclosed properties occupied and in better repair will support local property values and promote a faster recovery in the housing market," said Freddie Mac CEO David Moffett.
Tags: foreclosure, freddie mac, real estate
Foreclosures up Again
Thursday, October 23, 2008 - By Gate Arty
RealtyTrac announced today that foreclosure filings were up 71% nationwide, in the third quarter over the same period last year. Astoundingly, approximately 766,000 homeowners had a sheriff show up at the door and with a foreclosure complaint in hand! Six states made up for nearly 60% of the list: Arizona, California, Florida, Michigan, Ohio, and Nevada. Most respected experts believe that this trend will continue well into 2010 as the market absorbs the inventory that is just now coming online.
Tags: foreclosure, homeowner, homes, real estate florida
Market Turmoil
Wednesday, September 17, 2008 - By Gate Arty
The recent turmoil in the financial markets has been nothing but staggering. Storied institutions such as Bear Stearns and Lehman Brothers are essentially gone. Merrill Lynch was scooped up by Bank of America for a song. The US government has come into rescue Fannie Mae and Freddie Mac, but it figured at some point there is a risk of doing too much bailout.
What does all this mean for the real estate industry?
Get ready for more wild rides. Now that equity markets have proven an unsafe and risky investment, more and more real estate investors will be coming out to play. And now that financial institutions are filing for bankruptcy, this will setup even greater liquidation among those real estate assets.
Which means that more wealth will be created for some individuals now than ever before, and frankly this type of wealth creating wasn't even possible when things were considered "good." Sure things are plain awful out there for some investors, but for others this is the opportunity that comes around only once a decade, or perhaps a century. The only thing that resembles this is the S&L crisis in the 1980s, where 747 savings and loan associations failed.
Will there be more government subsidized bailouts? Many are asking why Lehman Brothers was not rescued. Well, enter the economic concept of moral hazard.
Let me ask you a question. Have you ever bought rental car insurance? You know, after you pay for it you feel a little free when your driving someone else's car, right? I know with rental cars I love to take the corners sharper, gun the engine, and basically get “my monies worth,” knowing full well that if I bang up the car, I've got nothing to lose (other than my health if I bang it up too much!). Now please don't forward this e-mail to Avis and get me on their blacklist!
Same concept for the government. They bailed out Bear Stearns. They bailed out Fannie Mae and Freddie Mac. But if they were to bail out yet another financial institution, particularly one that we can all live without, there would be a sense of carelessness that would encourage future speculators.
So what's the story here? In this case, the government wants them not to intentionally cut off their toes, but rather if they see gangrene they go to the hospital rather than awaiting their financial windfall. Lehman Brothers financial woes, due in large part to bad bets on real estate and its related securities, means that the economy is frankly in worse shape than many think. There will be more collateral damage. Lehman's unwinding will cause damage to other financial institutions as inevitably the interest rate swaps (which the Wall Street Journal reported may run into the millions) and other financial instruments affect other institutions, too.
Foreclosure vs. Short Sale
Sunday, August 24, 2008 - By Gate Arty
What follows is a brief synopsis of the differences between a FORECLOSURE and a SHORT SALE and their affects on certain issues.
Fannie Mae Loan: A homeowner who loses a home to foreclosure is ineligible for a Fannie Mae backed mortgage for a period of 5 years. Homeowners who successfully negotiate & close a short sale will be eligible for A Fannie Mae backed mortgage after only 2 years. For investors that allow a property to go to foreclosure, a Fannie Mae backed investment mortgage will be unattainable for 7 years!
On any future 1003 application, a prospective borrower will have to answer "YES" to question C in Section VIII of the standard 1003 that asks: "Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?" There is no similar declaration or question currently regarding a short sale.
Credit Score: A foreclosure can lower a credit score anywhere from 250 to over 300 points. Typically this will affect a score for about 3 years. A short sale will only affect your credit report to the extent that late payments will be reported. The satisfaction of the mortgage resulting from a short sale will be reported as paid or negotiated. This can lower the credit score as little as 50 points just as long as all other payments are being made. The affect of a short sale can be as brief as 12 to 18 months.
Credit History: Foreclosure will remain as a public record on an individual's credit history for 10 years or more. A short sale is NOT reported on a credit history. In this instance, the loan is typically reported, "paid in full, settled."
Market Update - July Real Estate Sales
Wednesday, August 20, 2008 - By Gate Arty
The MidFlorida MLS reports that the Lakeland Association of Realtors closed 164 homes & the East Polk board reported 120 sales in June. Overall there were 284 homes sold in Polk, up from 282 homes last month. A year ago in June 2007 there were 275 homes sold, so the news should be reported that Polk sales are up from last year!
The average list price in Lakeland decreased to $180,303 from $183,672 last month, and the average sales price decreased to $169,351 from $171,773 last month. The average days on the market increased to 134 from 124 last month. In East Polk, the average list price decreased to $147,019 from $165,987 last month. The average sales price dropped to $136,876 from $153,489 last month. The average days on market decreased to 151 from 155 a month earlier.
What price categories sold last month? In Lakeland the majority of sales occurred in the $140,000-$159,999 price range, which represented 11.59% of all sales (19 units). Both the ranges of $120,000 - $139,9999 price range and $160,000 - $179,999 represented 10.37% of sales, or 17 units sold. The upper end market remained sluggish, with only one home selling for over $800,000 and 13 homes selling for over $350,000 (last month 11 homes sold for more than $350k).
In East Polk there were 18 sales in the $120,000 - $139,999 price range, which represented 15.00% of total sales. The second most popular category was $140,000-$159,999, which represented 12.50% of the market (15 sales). The upper end also was sluggish, with only 2 homes selling for over $350,000, down from 6 last month.
Foreclosures continued to dominate Polk County and we haven't seen much sign of a significant slow down. In July there were 755 foreclosures, down from the record setting number of 888 foreclosures in June. If you consider that all of Polk County sold 284 homes last month, and there were 4,706 Lis Pendens filed so far for the year . . . . WOW! Just to put things in a bit of perspective, however, Hillsborough County had 1,767 Lis Pendens filed. This was up from 1,659 the prior month. Short Sales (Pre-Foreclosures) & other distressed sales will continue to dominate this market for some time.
Housing and Economic Recovery Act of 2008
Friday, August 01, 2008 - By Gate Arty
On July 30th, President Bush signed the Housing and Economic Recovery Act of 2008. All provision details are not yet available, but the major components included broad authority for the Treasury Department to safeguard the nation’s two largest mortgage finance giants (Fannie Mae and Freddie Mac) and a plan to help hundreds of thousands of troubled homeowners avoid foreclosure.
As anticipated, all seller-funded DPA programs will be abolished October 1st, 2008. Meaning the minimum cash investment requirement will increase to 3.5% of the purchase price.
More news to come on this as it becomes available!
Tags: business, down payment, economy, fannie mae, finance, freddie mac, mortgage, real estate
Real Estate Foreclosure Opportunities
Monday, July 14, 2008 - By Gate Arty
A turbulent real estate market has presented opportunity for local investors. Polk County has never had as many real estate foreclosures as our present day market. In June alone there were 815 foreclosures. In June of 2007, there were only 381 filings . . . a whopping 114% increase! In all of 2007, there were 5132 foreclosures. Thru June there have already been 4,481.
So what of this opportunity? Buyers, specifically investors, have a treasure trove of real estate inventory to select from. Banks are not in the business of owning real estate. Once a property is foreclosed & in their ownership they will either sell the property at auction, or typically secure the services of a REALTOR to sell the property. It is wise to consult with a REALTOR adept at handling foreclosures, known in the real estate profession as REO (real estate owned) properties. Typically these REALTORS work with several banks & are often the first to know about a property before it even hits the multiple listing service (MLS) database. Working with a REO professional could give you insight on market conditions, incoming inventory, potential resale values, & financing options on rehab properties.
Debt Forgiveness
Friday, April 11, 2008 - By Gate Arty
In my last post, I described the short sale process. Some have expressed concerns about the effect the resulting debt-forgiveness of a short sale has on your tax situation. In prior years, any form of debt-forgiveness on a mortgage was considered earned income. Now, however, the Mortgage Forgiveness Debt Relief Act of 2007 allows a 3-year window for homeowners to refinance their mortgage with no tax penalty on any debt relief that is received. This act will increase the incentive for borrowers & lenders to work together to refinance loans , and realtors to negotiate short sales to avoid foreclosure. This act only applies to principal (homestead) property.
Click here for more information on the Mortgage Forgiveness Debt Relief Act.
What is a short sale?
Wednesday, April 09, 2008 - By Gate Arty
A "short sale" or "pre-foreclosure" occurs when a bank (or lien-holder) agrees to accept a discounted pay-off of a mortgage. In other words, the bank(s) will release the lien(s) that is secured on the real estate, upon receipt of LESS money than is actually owed. Why would any bank accept less than what is owed? Well, it must make financial sense for this to occur. Here's a scenario . . .assuming there is an offer, of course!
First off, the mortgage(s) in question is typically in some stage of default. The bank, faced with a mortgage that is not being paid, must decide whether selling at a discount makes better financial sense than actually going through a long & costly foreclosure process. In our current real estate climate (because of the increasing alarming rate of bank foreclosed properties), most institutions are deciding that short sales are a viable route. Remember, banks and other lending institutions are not in the business of owning real estate. They want good mortgages. Foreclosures are not only time-consuming, but they are expensive.
The bank will not accept just any offer, however. They will have the property appraised to establish approximate market value. If they can negotiate a sales price "close" to that figure, a short sale may then be consummated. If the short-sale offer is not considered valuable enough, then they may opt to foreclose, and eventually sell the property on the retail market once they obtain "possession." This is what we know of as a foreclosure property.
Short sales represent a tremendous purchase opportunity for buyers and especially investors. Since most transactions occur on a distressed level, many sales prices occur below appraised value giving the buyer "instant equity."
- March 2010 (1)
- February 2010 (3)
- January 2010 (5)
- November 2009 (2)
- October 2009 (2)
- September 2009 (1)
- August 2009 (8)
- July 2009 (2)
- June 2009 (9)
- May 2009 (10)
- April 2009 (13)
- March 2009 (10)
- February 2009 (6)
- January 2009 (6)
- December 2008 (1)
- November 2008 (8)
- October 2008 (7)
- September 2008 (14)
- August 2008 (11)
- July 2008 (9)
- May 2008 (2)
- April 2008 (8)
- March 2008 (5)
- Arts and Culture (32)
- Business (63)
- Buying (68)
- Central Florida (69)
- CSX Rail (2)
- Downtown Lakeland (42)
- Events and Activities (51)
- First Friday (15)
- Florida Southern College (2)
- Foreclosure (35)
- Lake Hollingsworth (4)
- Lake Mirror (18)
- Lake Morton (5)
- Lakeland (71)
- Mayfaire by-the-Lake (4)
- Mortgage and Finance (46)
- Pre-Foreclosure (14)
- Public Parks (31)
- Public Safety (6)
- Real Estate (90)
- Schools (5)
- Selling (68)
- Short Sales (9)
- Sports (6)
- Sun n' Fun Fly-In (2)
- Tax Issues (10)
- Virtual Tours (38)
View RSS/XML Feed