Distressed Properties Sale Articles

Once again, Oregon is in the throes of rising REO properties for sale. A May market data showed that the state’s foreclosure filings inched up by 89.8 percent compared to a year ago figures.

Industry experts pointed out that unless authorities, mortgage lenders and homeowners do something to address the rising defaults in the state, Oregon’s foreclosure filings will surge beyond the mark of one out of 525 houses facing the potential of being added on REO properties for sale.

Also last month, Oregon saw a rise of almost 90 percent in property losses. Furthermore, over 3,000 distressed homeowners across the state received notices of default or foreclosure auction or were repossessed. The figures represented a slight decline from April but were 20 percent above the same-time level a year ago.

In the first quarter of this year, foreclosure filings were issued on 10,547 distressed homeowners, a 29 percent jump from the last quarter of the previous year and a whopping 151 percent increase from the year-ago first quarter. The drastic increase in the state’s unemployment rate is being blamed for putting Oregon on the throes of the foreclosure crisis.

Several efforts are being made to help homeowners save their properties from foreclosures. The Senate Bill 628 aims to stave off REO properties for sale in Oregon. Under the bill, banks would be required to discuss with distressed homeowners possible solutions to avoid foreclosures.

The meeting between lenders and homeowners will be made before trained mediators who would help work out affordable payment plans. In the event that lending institutions and banks failed to come in an agreement with distressed homeowners, banks will be required to pay a fee if they decide to resell the distressed properties.

Nationwide, the Obama Administration launched the Making Home Affordable program in an effort to reduce the number of homeowners losing their properties to foreclosure. According to the Department of Treasury, over 120.000 borrowers were able to renegotiate for affordable payment plans with their lenders since the program was launched.

However, despite efforts of the national government to contain foreclosures, about 1 million houses became REO properties for sale since March. And it is expected that more and more Americans will see their houses go into foreclosure proceedings in the coming months.

Because home appraisers base their home valuations on foreclosure listing prices and other previous home sales prices, distressed sales and foreclosure properties sales still affect homebuilders weeks or months after the distressed homes are sold.

Appraisers used previous home sales to gauge trends in home values, which have been deteriorating in many housing markets because of falling home prices.

Home builders have been struggling to survive as low foreclosure listing prices continue to clobber their new home sales and force them to reduce new home prices to break-even points and even force them to sell homes past break-even points to cut their losses.

Robert Curran, home building analyst at Fitch Ratings, said that homebuilders have been struggling against foreclosure listing prices since the foreclosure crisis began. He said that many homebuilders are even competing with their own company-built homes, which are being sold at low prices.

Oftentimes also, low past foreclosure listing prices are considered in appraisals, further reducing home valuations. According to Bill Garber, head of external relations at the Appraisal Institute, most mortgage lenders require appraisers to use home sales completed within 3 months, instead of the 6 or more months required before the foreclosure crisis began.

With the increase in foreclosure listing sales in recent months, the home sales data usually considered by appraisers include low-priced foreclosures, especially in foreclosure-battered markets like Phoenix, Las Vegas and the Inland Empire region of California.

David Ledford, a top executive of the National Association of Home Builders, said that mortgage lenders have been burned by appraisers who inflated home values during the housing boom, so now lenders are pressuring these appraisers to make very conservative estimates. Ledford insisted that making conservative estimates is contributing to the downward direction of home values.

Homebuilders also charge that most appraisers do not consider added values when appraising a new home, such as energy efficiency features.

In response to homebuilders’ contention about appraisers, Garber of the Appraisal Institute said that appraisers do not make the housing market and that they simply translate into numbers what is happening in the market.

Even so, both homebuilders and appraisers agree that falling home valuations are largely caused by falling home prices, particularly foreclosure listing prices. The Standard & Poor’s/Case-Shiller Price Index in the first three months of this year showed a decline of 19.1 percent in home prices in major U.S. cities.

In May, the number of foreclosure notices filed in Florida dropped from the April total, but the state is still second among all states in number of filings including foreclosed property units, according to a foreclosure report released this week by California-based real estate research service RealtyTrac.

The city council of Shoreview, Minnesota is planning to require owners of abandoned, vacant and repossession homes to register their properties to prevent them from becoming blights in neighborhoods and communities in the area.

Short sale and foreclosure are very different from each other. This is what Lincoln Calder, president of Park City Board of Realtors in Utah, wants homeowners to know. He is concerned about some of the misunderstandings surrounding short sales.

Reverse mortgages may pose the same compliance risks as subprime loans, according to Comptroller of the Currency (OCC) John Dugan. He also criticized his agency for responding too slow to the growing repo properties problem which led to the collapse of the housing market.

Starting July 1, Connecticut’s voluntary mediation program to prevent foreclosures will become mandatory after the state General Assembly passed a bill making foreclosure mediations mandatory.

Mortgage Help Services Inc., an REO property prevention firm, has been ordered by Superior Court Judge Howard Manning to stop operating in North Carolina. Attorney General Roy Cooper requested Manning to order Mortgage Help and Nathaniel Livingston, its chief executive officer, to stop operating in the state.

The U.S. Federal Trade Commission (FTC) wants to have a hand on regulating companies that offer repossession houses rescue and loan modification services. The agency has started drafting tougher rules as more and more companies emerge to offer foreclosure prevention and loan modification services.

The continued rise in foreclosed properties in Florida clouded the speech of Governor Charlie Crist last week at the signing of Florida’s budget of $66.5 billion.