Where to Find Foreclosures

When the housing bubble burst in 2007 and more than six million families lost their homes, the pain was greatest in markets where lax lending standards (which have since been outlawed) were the most widespread. Florida, Nevada, Arizona, and California—the so-called “sand states”—led the nation in foreclosures.

What has changed since then?

Today, the foreclosure picture has changed dramatically. Last year’s number of 1.1 million foreclosure filings was the lowest annual total since 2006, the year the housing bubble began to burst.[1] The number of completed foreclosures in January 2016 was down 67.6 percent from the peak of 117,743 in September 2010.[2]

The geography of foreclosures also has changed. Today, Florida and California remain in the top five states for foreclosures. The five states with the highest number of completed foreclosures for the 12 months ending in January 2016 were:

1. Florida (74,000)
2. Michigan (49,000)
3. Texas (29,000)
4. California (25,000)
5. Ohio (24,000)
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These five states accounted for almost half of all completed foreclosures nationally.

“In 2015 we saw a return to normal, healthy foreclosure activity in many markets even as banks continued to clean up some of the last vestiges of distress left over from the last housing crisis,” said Daren Blomquist, vice president at RealtyTrac. “The increase in bank repossessions that we saw for the year was evidence of this cleanup phase, which largely involves completing foreclosure on highly distressed, low-value properties.[3]

“Meanwhile, local economic problems became a larger driver of foreclosure activity in 2015,” Blomquist said. “Examples of this are Atlantic City, New Jersey, which posted the nation’s highest metro foreclosure rate for the year, along with several heavy oil-producing markets in Texas and Oklahoma where foreclosure activity increased in 2015, counter to the national trend.”

Foreclosure rates are on the rise in other areas

In 24 states and the District of Columbia—many of which missed the massive defaults seven years ago—there was an increase in foreclosure activity in 2015 compared to 2014. These included Northeastern states like Massachusetts (up 55 percent) and New York (up 24 percent), where home price increases have lagged and states suffering from the downturn in oil prices like Oklahoma (up 36 percent),) and Texas (up 16 percent). States with the highest foreclosure rates in 2015 were New Jersey (1.91 percent of housing units with a foreclosure filing), Florida (1.77 percent), Maryland (1.60 percent), Nevada (1.40 percent), and Illinois (1.26 percent). 

 

Among the nation’s 20 largest metro areas, six posted year-over-year increases in foreclosure activity in 2015: Boston (up 44 percent, St. Louis (up 38 percent), Dallas (up 25 percent), Detroit (up 22 percent), New York (up 9 percent), and Houston (up less than 1 percent).[4]

Metro areas with the highest foreclosure rates in 2015 were Atlantic City, New Jersey (3.43 percent of housing units with a foreclosure filing); Trenton, New Jersey (2.14 percent); Tampa Bay-St. Petersburg-Clearwater, Florida (2.03 percent); Jacksonville, Florida (2.02 percent); and Miami (1.98 percent).

What does this mean for you?

If you’re considering an investment in a foreclosure, you may no longer be limited to searching in areas that were hardest hit by the housing crisis. That may mean that you find a greater variety of foreclosures in more popular neighborhoods.

It may also, however, mean more competition. And when the process of buying a foreclosure is already so complex, more competition isn’t exactly welcome.

source: totalmortgage.com

What is the Fannie Mae HomePath?

Fannie Mae takes many precautions to decrease the chance of properties with their mortgages foreclosing. However, it isn’t possible to stop all foreclosures.

So when it inevitably does happen, the best thing is to sell that home quickly.

That’s the goal of the Fannie Mae HomePath program—to resell foreclosed homes in a timely manner so as to minimize the negative impact on communities.


How foreclosures negatively affect communities

1. Lower housing values

It’s been demonstrated that foreclosures bring down property levels of nearby homes. It’s different in every area, but the most common reasons for this are “distress sales” of foreclosed properties, the eyesore abandoned homes can create, vandalism, and increases in crime.

2. Harm the broader economy
 
Falling home values kicks off a domino effect that ultimately impacts the whole economy. Consumer spending and new construction both take hits, which spurs jobs loss and unemployment. The snowball gets bigger as more homes are then foreclosed, leading to less spending and investment all around.

3. Decrease revenue for local governments

Property tax is a major source of revenue for local governments. So when foreclosed homes bring down the value of surrounding properties, the local government can see significant losses. In addition, local governments will often have to pay for the upkeep of foreclosed homes until they’re sold.

Clearly, foreclosed homes create many far-reaching problems.


How the Fannie Mae HomePath helps


1. Online directory

With thousands of homes in an online directory, the HomePath program allows buyers to easily browse available foreclosed homes. All of the filters a buyer would want, such as price, number of beds/baths, property type are available under advanced search. There are also pictures with every listing, making it easy for buyers to quickly get a feel for the property.


2. Upkeep

Maintenance standards are another important aspect of the HomePath program. All properties are kept in line with local codes, and requirements and are maintained so as to be ready for sale at a moment’s notice.

Fannie Mae works with maintenance workers on the local, state, and national level to make sure all properties get the care they need, from removing trash, to securing the property, and seasonal care like winterization.

To ensure the upkeep is done in line with quality standards, Fannie Mae has their own agents and quality control specialists inspect the properties, as well as third party inspectors. Not only does this upkeep help homes sell faster, but it also supports neighborhood stabilization.

In the past, real estate owned (REO) properties—such as foreclosures—have had a stigma attached to them that can dissuade buyers from purchasing. The Fannie Mae HomePath program, with its focus on upkeep and selling homes quickly, has done much to reverse that image and make foreclosures a serious consideration among homebuyers.

source: totalmortgage.com

5 Things to Consider When Buying a Foreclosure

Buying a home in foreclosure may seem like a good way to get in on some cheap real-estate, but with all the possible headaches, is it worth it? Ultimately, that’s for you to decide, but if you do choose to give it a go, keep these five thoughts in mind.

1. Find a real estate broker who specializes in foreclosed homes

Having an expert on hand is always a good thing. They’ll provide useful insight, and a lot of times, they’ll be aware of homes that haven’t even reached the market yet.

2. Get a pre-approval from a lender

Most buyers want to shop around, find their perfect home, and then work out the financing. However, with foreclosed homes, the deals move quickly, and if you aren’t pre-approved, that extra time could cost you your desired home.

3. Prices can change

Just because it’s a foreclosed home doesn’t mean the price is set in stone; there can still be multiple offers that drive the price up. Do your research, and find out the recent prices of comparable properties (comps) to make sure your offer is on point.

4. Plan for the long-run

If you’re only goal is to make a quick flip, you could end up with regrets if your plan falls through. To avoid such a tragedy, have a back-up plan that accounts for you holding onto the property for at least five years.

5. It’s going to need work

Foreclosed homes are sold as they stand, and this almost always means you’ll be doing some renovating. If you aren’t friends with a skilled tradesman, or don’t like DIY projects, foreclosed homes may not be for you.

source: totalmortgage.com