OfflineMany people ask me about my thoughts on foreclosures drying up during this upswing market that we are currently in. People naturally thing that when the market is going up, that the number of foreclosures will be going down. Believe it or not, the number of foreclosures are on the rise and will be for some time. Event when the market is going up. I was doing some research, and found this awesome article that talks about this exact question. It’s a quick read, but has some great information in it that supports what I am talking about. Enjoy!
By Amber Nelson | Mortgage101
The number of homes repossessed by lenders rose in May, according to foreclosure data company RealtyTrac, as did foreclosure starts and filings, an indication that banks want to take advantage of rising home prices to push out their inventory.
In May, bank repossessions grew to 39,000, up 11 percent from April, with 33 states posting increases. North Carolina had the biggest monthly gain with a 60 percent increase in May, followed by Oregon with a 57 percent leap and Wisconsin and Illinois with a 44 percent increase each in repossessions.
Foreclosure starts also increased across the country, rising 4 percent from April. Compared with last year however starts are still down 33 percent. One in every 885 U.S. households underwent some form of foreclosure action in May with total foreclosure filings, including default notices, scheduled auctions, and bank repossessions rising 2 percent in May to 148,054. That reversed a long downward trend and inched back up from April’s 75-month low. Still, filings in May were down 28 percent from May 2012.
Many banks may be eager to push forward on their foreclosure backlogs as home prices continue to rise quickly and inventory has been depleted. Distressed properties are in great demand in the markets now, something that hasn’t been the case since the beginning of the Great Recession.
By state, Florida had the highest foreclosure rate with one in every 302 households receiving a filing in May, but foreclosures starts dropped 17 percent from the year before. Nevada’s rate was a close second with filings going out to one in every 305 households. Foreclosure starts there jumped 81 percent from May 2012. Third was Ohio with a foreclosure rate of one out of every 584 households.
“Foreclosure activity continued to bounce back in some markets where it may have appeared the foreclosure problem had been knocked out by an aggressive combination of foreclosure prevention efforts over the past two years,” said Daren Blomquist, RealtyTrac vice president in a press release, but he added, “the emerging housing recovery has strengthened most local markets enough to quickly shake off a few more blows from these nagging foreclosures.”
Are Foreclosures Going Dry? Think Again,,,,,,
Posted on: Thu, 06/20/2013 - 14:26
Are Foreclosures Going Dry? Think Again,,,,,,
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On a related note. I read an article recently that stated, over 60% of the loans, that the borrowers did loan modifications on, are in default again.
It's interesting how they won't let people who pay their mortgages on time get the loan mod, but someone who doesn't can.
What makes the government think they will pay their bills just because they have a cheaper interest rate.
If there is a positive side to this, I guess it would be that there will be more opportunities for us to make more money buying the REO's and short sales.
God bless America.
You are right! That's exactly what it means. Inventory is not going anywhere. I hear all the time from newer investors and many real estate agents out there (who obviously don't work with investors) that the inventory is going away which means we have to make more aggressive offers (higher) to get deals. WRONG!!!!!
Yes the market is changing, and we are paying a bit more for properties now than we were last year, but these types of upswing markets are a wholesalers dream because the buyers are more plentiful. Buyer Confidence goes up, and investors who were "sitting on their money" until the market started to improve again are now getting off of the pile of cash they were keeping warm like a mother hen and putting that money back into the market. So get out there and find those buyers and enjoy!
Happy Investing!
I see plenty of houses from shadow inventory popping up in my area; they're easy to spot because usually the for sale signs in front of the properties are not from your typical known realty agencies (ie. Remax, Century 21, etc) but from smaller unknown or non local agencies.
Also, there are some private companies out there who are buying reo properties and selling to investors, and they have plenty of inventory, so they will continue to be in existence as long as there are foreclosures...
Valerie
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This is exactly why I love spending time on Deans Forum.
The insight from experts like you teach me so much.
I love learning from students as I share insight at the same time.
Everything we can do to continue finding deals that other people can't find and watch for the diamonds in the rough, we will be able to do this the right way.
Please keep participating in this forum which will allow you to learn and share knowledge at the same time. This is exactly how we will pull ourselves out of the recession market that we are in. Thanks again for the input.
Happy Investing!
Matt
I drive the areas I am interested in on trash days. I find shadow inventory almost every time I go out. I do the research to see who owns it and any foreclosure information and bird dog it on to local investors as well as a realtor who I have an agreement with. They're hard to make any money on as a bird dog unless you have someone who will go directly to the bank and try to buy it or a realtor who can try for the listing. Any other ideas on what to do with them would be appreciated.
But there is no shortage that I see in my area.
Wendy
"Faith is taking the first step even when you can't see the whole staircase."
~ Martin Luther King, Jr. (1929-1968)
www.beaconinvestorsgroup.com
You will find that they will all come on the market eventually. And all of them will be listed. You may try the small local banks and credit unions. That is the only possible exception I can think of. You may want to talk to these banks and see. You might be able to buy direct from them.
In my experience, and I have been buying/selling REO's for years, there is only a few agents that have contracts with the different banks, and government entities to sell all of their properties. That is why they are all listed.
If you watch close, or have an agent who really has their hand on the pulse of this market, you will get to know who the REO agents are and keep an eye on their listings. It is a good bet that most of their listings are REO's. Then when they get a new listing, you can get on it right away. In most cases these days, you won't to waste any time doing so, or the house me be gone. They tend to get many offers quickly, if they are a good deal.
Good luck,
Jim
Thanks for the information and insight on foreclosures with us. There are so many opportunities out there as we explore several new areas to find that next deal. Believe and Achieve!
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