Distressed Properties Sale Articles

Foreclosure houses in Worcester, Massachusetts are being sold at prices lower than tax assessments made by the city’s tax assessors.

A foreclosed two-family house on Lenox Street was appraised by the city’s tax assessors at $442,800, but it was later sold for only $200,000.

A foreclosed apartment complex on Dewey Street was sold for $197,500 after it was earlier appraised by the city at $308,000.

There are many other cases where the tax assessments were much higher than the actual sales prices. A single-family house was sold for $119,500 after being appraised at $159,200. A two-family house was sold for $269,000 after being appraised at $309,600. A single-family house was sold for $122,000 after being valuated at $222,800. Another single-family house was sold for $165,000 after being appraised at $199,500. A three-family house was sold for $100,000 after being valuated at $246,500.

In many similar instances, houses have been sold for around 10 to 20 percent less than the current tax assessments made by city assessors.

Last year, total tax assessments for properties across Worcester dropped by 4.63 percent, the first decrease in 12 years, according to Robert J. Allard who was then the city assessor. That time, he expressed concern that the slowdown in Worcester economy and the continued foreclosure filings were pushing down property values. He also predicted that the slide in property values could continue for several years.

In the meantime, homeowners who are expecting lower property tax payments for 2009 because of the sharp decline in home values could be surprised when their tax bills arrive because their tax payments may have increased instead or just remained the same as last year.

One significant problem in comparing tax assessments and home values is the tax assessment lag. Under state law, all tax assessments are set as of January 1 of every year. Tax assessments this year are based on tax valuations set as of January 1 last year. It is not surprising then that the difference between current home values and tax assessments are substantial, in addition to the value reduction effects of foreclosure properties.

Tax assessments set as of January 1 this year will only begin to be applied in the fiscal third quarter of 2010. Homeowners will see these assessments in December this year when the city sends its tax bills to taxpayers for fiscal 2010.

Banks in Missouri suffered losses in the second quarter as the high number of foreclosed houses across the state pressured the banks to increase their reserves and their write offs for delinquent loans.

Commercial banks in the state reported a total loss of $67 million during the second quarter this year. In contrast, these banks gained a total of $152 million during the second quarter of 2008.

Savings and loans institutions however posted profits in the second quarter. They earned $11 million, which is a big contrast to their $8 million loss in the second quarter of last year.

As the number of foreclosures continued to put pressure on the financial sector, banks in Missouri made 1.27-percent write-offs on loans and leases in the second quarter. This marked a 0.62 percent from the total write-offs in the second quarter of 2008. The percentage of delinquent loans rose to 2.7 percent, so they also stepped up their reserves for future losses in bad loans, allocating a total of $395 million.

Despite the profits posted by thrifts, they also stepped up their write-offs for bad loans and leases, writing off 1.98 percent. This marked a rise from the 0.64 percent in the same quarter of 2008. They reported 3.7 percent of their total assets as nonperforming and allocated $185.3 million for their reserves for delinquent loan losses. Their loan loss reserves one year ago were only $75 million.

Of the 321 total of commercial banks in the state in the second quarter, 22 percent posted losses, a significant increase from the 14 percent in the second quarter last year. The percentage of commercial banks posting increased profits dropped to 30 percent, a sharp decrease from 45 percent one year ago and nearly 34 percent in the first quarter. A total of six banks closed over the year.

Of the 28 Missouri thrift institutions, 25 percent reported losses in the second quarter this year, a rise from the 20 percent in the same quarter last year. In contrast, the percentage of thrift institutions which posted increased profits rose to 46 percent compared to 43 percent during the second quarter of 2008. Two thrifts closed their operations over the year.

On a positive note, Missouri commercial banks and thrifts increased their deposits, with commercial banks increasing their deposits to $117.6 billion from $109.7 billion in last year’s second quarter. Thrifts meanwhile increased their deposits to $9.3 billion, a stunning increase of 66 percent.

Following the examples of Saginaw, Genesee and Sanilac counties, Bay County has established its own land bank aimed at buying foreclosed properties for sale.

Public foreclosure property auctions in Texas could face legal challenges and other difficulties after the enactment of a new law that takes effect this September.

Another bank was downed by assets in foreclosure for sale, putting the tally of failed banks in Georgia in 2009 at 17 and total failed banks in the U.S. this year at 78.

Foreclosed homes auctions in the coming months in New York may include high-end condo units at the Carriage House in Chelsea after the condominium complex became the target of foreclosure and payment lawsuits by lenders and contractors for non-payment of loans and bills totaling more than $20 million.

A number of foreclosed homes auctions are being planned by the city officials of Saint Paul, Minnesota to reduce the number of vacant and foreclosed homes across the city.

Repo homes lists will soar and will contain around 1.15 million residential properties in the middle of 2010 because of the inability of homeowners to catch up on their monthly payments, according to Baclays Capital.

Investment banking corporations have been repackaging securities backed by both good mortgages and mortgages at risk of foreclosures to reduce bad debt levels that have been blocking the recovery of the mortgage market.

Foreclosure for sale took the lion share in the total home sale deals in Polk County, Florida in July. Last month, 385 existing properties were sold in Polk County, representing a 23 percent increase from the same month last year’s 313 sales deals.