RealtyTrac Foreclosure Report Shows 28% Decrease From May 2012

Foreclosure actions increased by 2.0 percent in May from April's 75 month low point for foreclosure activity according to RealtyTrac's U.S. Foreclosure Market Report released June 11. However, the good news is that May 2013 foreclosure filings were still 28 percent below May 2012 filings.

RealtyTrac reports that approximately one in 885 homes were in some stage of foreclosure in May. This does not mean that 1 in 885 homes was lost to foreclosure, but it does indicate that documents related to some phase of foreclosure (Notice of Default, Notice of Trustee Sale, and Bank Reposession) were filed.

Actual lender repossessions (REO) increased by 11 percent in May, but were down by 29 percent as compared to May 2012. 33 states reported increases in REOs with North Carolina, Oregon and Wisconsin having the highest numbers of REO properties added.

Judicial Foreclosure States Lagging In Clearing Foreclosure Inventory

Foreclosure starts were up by 4 percent in May, but were 33 percent lower than for May of 2012. States using judicial foreclosure proceedings were 5 of the top 6 states for foreclosure filings. The state of Nevada, which uses non-judicial foreclosure proceedings, was second after Florida and ahead of Ohio, South Carolina and Illinois.

In general, judicial foreclosure proceedings take longer to complete than non-judicial foreclosures. This results in homes being unavailable for sale for longer periods of time. Lenders are required to complete the foreclosure process and in some cases, they must await expiration of a redemption period before a foreclosed home can be repaired and sold.

In states using non-judicial foreclosure proceedings, the time between the initial foreclosure filing and the foreclosure sale can be as little as three to four months. Quickly turning over foreclosed homes is helpful for improving regional housing markets and making more homes available for purchase. Economists have recently cited low inventories of homes as holding back housing markets in some areas.

Bank Owned Properties Provide Buying Opportunities

Lender-owned properties provide potential opportunities for first-time buyers and others seeking affordable homes. Mortgage lenders tend to offer attractive sale terms on REO properties, as their objective is to move these homes out of their inventories as quickly as possible.

Some foreclosure properties are also lacking current maintenance and are often sold as-is. DIY enthusiasts can buy and renovate foreclosed homes for owner occupancy or investment. 

It's a good idea to discuss your interest in the opportunities available for buying a Metro Atlanta lender-owned home with a trusted real estate professional.

For more information about the Atlanta area real estate market, please email me at ed@edshort.com or call me at 404.918.2500.

~ Ed Short, Atlanta REALTOR®

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Understanding And Purchasing Distressed Property For Profit

According to the the latest Foreclosure Inventory Analysis showed nearly 1.5 million properties were currently in the foreclosure process or being held by banks as Real Estate Owned.

This was up 9 percent from the first quarter of 2012, but down significantly from the apex of foreclosure activity -- 2.2 million units -- in December 2010.

What Is Distressed Property?

"Distressed property" is a blanket term for homes in foreclosure, short sale or that are REO (Real Estate Owned).

Below are definitions of different types of distressed real estate, so that you can be familiar with the terms.

• Foreclosure: When a homeowner has defaulted on their mortgage for a specified period of time, the bank takes possession of the real estate.

• Short Sale: A homeowner facing foreclosure may request a short sale from their lender to sell the property for less than what is owed.

• REO: Real Estate Owned properties have gone through foreclosure and are held by the bank. This increases the possibility of purchasing these homes at a discount because maintaining an REO is costly for a lender.

All three scenarios offer opportunities for substantial savings, yet all include stipulations with regard to the contract and terms of purchase.

Special Requirements With Distressed Property Purchases

When you buy this type of property, you are dealing with a financial institution instead of a private seller, so it may take more time to get to the closing table.

Be prepared for a longer than normal communication cycle as there are often delays when working with the bank or mortgage lender to come to a decision on an acceptable offer and closing date.

Unfortunately, many distressed properties have more deferred maintenance and repair issues

If you are willing to take the chance and be patient, a distressed property could pay off in terms of a lower purchase price.

Additionally, most buyers of distressed properties see an increase in the value of their Metro Atlanta real estate within a short time of purchase.

In the end, it is strongly advised that buyers work with an experienced property expert when interested in distressed properties because of the additional paperwork and requirements to complete the transaction.

For more information about the Atlanta area real estate market, please email me at ed@edshort.com or call me at 404.918.2500.

~ Ed Short, Atlanta REALTOR®

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