Bank Foreclosures Information

Investors and homebuyers can find repo houses for sale easily in Detroit, as thousands of cheap vacant foreclosed homes are available for sale in the city, according to the Detroit Office of Foreclosure Prevention and Response.

Over the past 3 years, the number of abandoned foreclosed properties in Detroit has soared from 46,000 units to78,000 units. Many of these foreclosures have been abandoned as Detroit residents left the city after the auto industry collapsed and made thousands of workers jobless.

At the peak of its industrial power, Detroit surpassed the two-million population level, but now the population has plunged to only around 830,000, leaving thousands of vacant foreclosure homes behind.

In Detroit, the majority of residential units are single-family homes as home builders built to respond to strong housing demand from workers in the auto industry. But early this year, General Motors and Chrysler filed for bankruptcy, closing their Detroit auto plants and closing the income sources for thousands of Detroit households.

In a recent auction of around 9,000 foreclosed houses and lots in Detroit, with many bids starting at $500, just 1,800 foreclosures were sold off, so investors who have vision and patience can still find homes and lots among the remaining foreclosures and then turn them into profitable properties.

The 9,000 foreclosure properties auctioned off last week were all houses and vacant lots foreclosed because of unpaid taxes since 2006. In addition to these foreclosures, investors can also find repo houses for sale among thousands of homes foreclosed because of the failure of homeowners to pay their home loans.

According to a report published by Detroit Free Press, the foreclosure crisis in Detroit was not caused by speculative construction or speculative investments that occurred in most other cities. A large majority of foreclosures in the city occurred because of the failure of the auto industry and the resulting high level of unemployment.

The unemployment rate in Detroit has reached a staggering 27 percent, with nearby counties also reaching double-digit jobless rates. Three suburban counties even have higher rates of foreclosure than Detroit because of the closure of auto plants in their areas. These are Eastpointe, Pontiac and Hazel Park, which were once populated by families whose breadwinners were working in the auto plants.

For investors looking to find repo houses for sale in Detroit communities with high rates of foreclosure, they can visit the zip code 48205, where one out of every 5.3 households is in foreclosure.

Related Posts:

• Foreclosed New Homes Rise as Midwest Plants Close
• Michigan City Deals With Growing Bank Foreclosures
• Michigan Bank Foreclosures Include Detroit Hotel
• Tales of Families After Foreclosures
• Success of Program to Buy Bank Foreclosed Homes for Sale

Buying home foreclosures for sale in affluent neighborhoods in Lee County and in other areas of Southwest Florida can be profitable for investors who can afford to wait until prices return to their previous levels before selling.

According to Jeff Tumbarello, head of the Southwest Florida Real Estate Investment Association, more high-end foreclosure homes in Lee County have been entering the market because of rising unemployment, collapse of businesses and the depression of home prices.

Based on data from the association, a total of 1,628 foreclosure actions were posted in the area in October. The number marked a decrease of 40 percent from the record high 2,665 posted in October last year, but the foreclosures are now including homes in high-end neighborhoods.

Tumbarello said that one-third of all homes that were foreclosed over the past two quarters were homes with swimming pools. Realtor Brett Ellis affirmed the spread of foreclosures into high-end areas by saying that he is increasingly seeing home foreclosures for sale priced in the high-end range.

Higher-cost homes in Lehigh Acres are priced above $100,000 while high-end homes in Fort Myers are in the price range of $200,000.

Real estate investor Kerry Collier said she has purchased a high-end foreclosed house in Estero for $285,000 and expects higher-cost houses initially priced above $300,000 to go down in price over the next few weeks.

According to Collier, who also owns a real estate brokerage and an online FSBO enterprise, the Multiple Listing Service shows a lot of high-end foreclosed homes.

Meanwhile, Brad Hunter, head of residential market research firm Metrostudy, said that despite real estate vacancies and continuing foreclosures in parts of Southwest Florida, new homes are actually being built in Lee County. He said that single-family housing starts in subdivisions increased to 194 units in the third quarter, compared to the previous period and vacant homes increased to 728 units, compared to 703 in the previous period.

Over the past 12 months, home builders have been concentrating on cutting down their housing inventories, but now they have started building again in anticipation of demand for new homes and to replenish their inventories.

However, Metrostudy executive Hunter said that builders of new homes will face competition from more home foreclosures for sale that will enter the Southwest market in the coming months. He added that unemployment and the default of prime loans will push up foreclosure numbers.

Related Posts:

• House Repossession Filings Surge in Idaho
• Growing Trend: Multiple Offers for Foreclosures for Sale
• Bank Foreclosure Properties Located in High-End Communities
• Buying and Selling Bank Foreclosures for Sale
• Increase in Cash Offers for REO Property Listings in Florida

The high demand for bank homes for sale nationwide pushed up home prices in September, according to a real estate survey conducted by Inside Mortgage Finance.

Home prices increased by 6 percent from price levels in August, reversing the one-percent August price decline from July. According to data gathered, the increase in home prices was driven by the rising demand for bank-owned homes or REO properties.

Nationwide, the average sales price for a damaged bank-owned home increased in September to $124,500, up from the August average of $106,700. The average sales price for a move-in ready bank-owned house, meanwhile, climbed up in September to $199,300, up from the August average of $178,500.

In September, damaged bank-owned houses comprised 15 percent of all house purchase deals and move-in ready properties comprised 16 percent of all home sales.

For non-distressed homes, the average price in August and in September stayed nearly constant. The average price in August was $267,900 while the average price in September was $268,200. Short sales accounted for 14 percent of all home sales in September while non-distressed homes comprised 55 percent.

Analysts said that the strong demand for lower-priced bank homes for sale reduced the time these types of homes remained on the market. During August, the average time damaged bank-owned homes stayed in listings was 9.4 weeks. The average time dropped to 7 weeks in September.

For move-in ready bank-owned homes, the average time they remained on the market in September was 5.9 weeks, a drop from 8 weeks in August. In contrast, non-distressed homes remained on the market longer, remaining in listings in September for 14.2 weeks, an increase from the average time of 13 weeks in August.

Purchases by first-time home buyers in September were again significant in September, comprising 42 percent of all home sales during the month. Before the passage of the law that offered federal tax credits to first time home buyers, their home purchases accounted for 32 percent of all home sales. The survey also found that most of the move-in ready bank-owned homes were bought by first time home buyers.

According to the researchers, the rise in home price levels and number of home buyers resulted from the confluence of favorable factors, including low mortgage rates, increased number of first time homebuyers, lower prices of bank homes for sale and the belief by real estate agents and home buyers that the housing market has started to recover.

Related Posts:

• Drop in Bank Foreclosed Home Price Drove Midwest Home Sales
• Growing Trend: Multiple Offers for Foreclosures for Sale
• Florida Buyers of Foreclosed Homes for Sales Get Low Rates
• Large Number of Government Owned Foreclosed Houses in Michigan
• Foreclosure Listings Auctions, Not a Bargain Anymore

The issue of bank foreclosed listings in California was among issues addressed by seven mortgage-related laws signed this week by Governor Arnold Schwarzenegger.

The seven bills all provided additional protections for consumers, particularly homeowners.

One of the bills signed was AB 260, which aimed to protect mortgage borrowers from brokers or lenders who entice prospective home buyers from taking out risky home loans and buying higher-priced homes. This is to prevent a repeat of bank foreclosures that arose over the past years and months.

The bill, proposed by Assemblyman Ted Lieu, will take effect on January 1 next year. It will ban lenders from offering pay option flexible-rate mortgage loans, which allow borrowers to make very low monthly payments in the initial years and then enable lenders to increase to higher interest rates and much higher monthly payments after 3 to 5 years of low payments.

AB 260 also limits prepayment fees to a maximum of 2 percent of the loan and enables state officials to implement federal lending laws.

Last year, a similar legislation was vetoed by the governor because of pressure from the California Mortgage Association, California Association of Realtors and the California Association of Mortgage Brokers. But Assemblyman Lieu was able to campaign effectively for his cause, arguing that his bill will cut down the rising number of homes going into bank foreclosed listings.

Lieu cited foreclosure statistics from a real estate research firm which indicated that more than 92,300 California mortgage borrowers were hit with default and foreclosure notices last August.

Another bill signed was the Buyer’s Choice Act, which was proposed by Assemblywoman Cathleen Galgiani. This bill aims to enable buyers of foreclosed properties in California to choose escrow firms operating in local areas to handle their closings. Galgiani claimed that lenders have been using their affiliated escrow firms to handle closings, eliminating escrow opportunities for local escrow firms. Galgiani also said that escrow entities based in Southern California are being used for closings in Northern California, making work more difficult for brokers and real estate agents in Northern California.

The other bills signed include SB 36, a bill proposed by Senator Ron Calderon to establish licensing requirements for home loan originators, and AB 1160, a bill proposed by Assemblyman Paul Fong to require lenders to provide borrowers with mortgage documents written in the language used during verbal negotiations concerning the mortgage. This bill aims to help non-native English speakers have a thorough understanding of their mortgages and help them save their properties from bank foreclosed listings.

Related Posts:

• Texas Bill to Delay Homes Going Into Bank Foreclosure List
• Decline in California Foreclosure Activity: Due to New Legislation
• Three Ways to Solve the Foreclosure Problem
• New York Bank Foreclosures Linked to Fraud
• Michigan Bank Foreclosures – Respite in Sight?

Bank home foreclosures continue to gain strength at a rapid pace. The trend is partly blamed on the rising mortgage delinquencies. Industry experts said that financial companies and consumer demand will continue to suffer and pay for bad loan decisions made during the peak of the housing market.

In November 2005, home sales reached an annual pace of 8.5 million. The following year, home sales dropped by almost 3 million. The rest is history as the housing market continues to spiral downward, pulling everything with it, including the economy, home prices and home values.

And adding to the worsening problem is the rapid rise in the unemployment rate. Last month, the number of people who lost their jobs reached 9.8 percent. According to industry experts, it will take at least one year before many Americans would need more new houses to accommodate increasing demand due to the lag between mortgage delinquency, bank home foreclosures and resale.

Market data showed that one-quarter of subprime mortgages accounted for the total loan delinquency so it is expected that there will be no shortage of housing supply. Industry analysts said that the large inventory of foreclosure properties on the market will forever hinder whatever progress is made towards the recovery of the economy and the housing market.

Statistical reports noted that as many as 5.8 million loans are in danger of defaulting and going into foreclosure. The figures overwhelmed the sales of existing single family homes which reached 5.1 million annually.

Meanwhile, home prices in the country posted marginal gains from April to July. However, industry analysts are not confident that home prices will continue to increase the rest of the year and next year given the large supply of foreclosure houses on the market.

They pointed out that there is a possibility that the current 30 percent drop in home prices is still a carryover from 2006. Analysts said that banks are still facing loan losses, therefore a rise in consumer demand is not yet possible.

Also, the unemployment rate remains unabated and many homeowners have already exhausted their savings and many are turning away from their properties that are worth less than the total mortgage they owed. All these trends are pointing towards more bank home foreclosures in the future, analysts said.

Related Posts:

• Home Builders Lobby for Federal Aid
• Baby Boomer Offspring to Contain Bank Owned Foreclosures
• Vacation Properties Growing on Bank Foreclosed Home Listings
• House Repossession Filings Surge in Idaho
• Demand for Bank Homes for Sale Pushed Up Home Prices

Bank foreclosed house for sale inventories are still rising in multicultural areas in Chicago and these foreclosed properties are staying on the market longer, according to a study by the nonprofit Woodstock Institute.

The study showed that 33 percent of all single family homes foreclosed in the past 3 years remained unsold as of December last year, leaving a lot of vacant properties in multicultural neighborhoods.

Whenever some of the foreclosed properties are sold, they are sold 30 percent below their home loan amounts, indicating that lenders have been accepting bargain prices to cut their loan losses.

The researchers also found that single-family foreclosures have been occurring mostly in Chicago’s African-American communities.

During the first quarter of this year, a total of 2,099 single-family houses in Chicago were foreclosed by banks and nearly 50 percent of these foreclosures occurred in neighborhoods where more than 80 percent of all residents are African Americans. In these areas, most foreclosure properties have also remained unsold for over 18 months.

Woodstock vice president Geoff Smith said he is concerned about the rising inventory of bank foreclosed house for sale not being purchased and the soaring number of abandoned foreclosures.

One multicultural working class neighborhood that illustrates the level of foreclosure problem in culturally diverse Chicago neighborhoods is Chicago Lawn. In one block at South Rockwell, half of all single-family homes and multifamily properties are boarded up while the rest are bank-foreclosed and vacant.

Based on the Woodstock study, the number of days to sell a foreclosure property in Chicago Lawn in 2007 was 274 days, a significant rise from 180 in 2005.

Almost all buyers of the properties were investors who planned to keep the properties vacant and just recoup their investments when property values go up again. Other properties were held by banks which have not decided to sell them.

Analysts said that it would take two years for Chicago Lawn to sell its current inventory of vacant homes, assuming that the number of new foreclosures is negligible.

However, based on foreclosure filings in Chicago from January 2008 to June this year, current foreclosure inventory will soar. Over 1,800 housing units in the zip code that covers Chicago Lawn went into foreclosure over the 18-month period ended June.

Recently, Bank of America agreed to work with community nonprofits to reduce the number of bank foreclosed house for sale in Chicago Lawn. The bank apparently realized it can cut its loan losses through aggressive loan modifications.

Related Posts:

• Resurgence of Bank Foreclosed House Expected Soon
• Success of Program to Buy Bank Foreclosed Homes for Sale
• Michigan City Deals With Growing Bank Foreclosures
• Nonprofit to Buy and Redevelop REO Properties for Sale
• Modifying Loans to Avoid Bank REO Properties Not Profitable

The number of bank foreclosure properties priced more than the conforming loan limit of $729,750 has been rising, according to a recent survey conducted by the Mortgage Bankers Association and studies by several property research firms.

Based on data from the researchers, default rates on prime jumbo mortgages have been increasing, particularly home loans provided by lenders from 2006 to 2008.

Robert Toll, chief executive of luxury house builder Toll Brothers, admitted that the rise in prime jumbo loan foreclosures is a threatening development for the home building industry.

Additionally, the MBA data showed that out of three recent foreclosures, one was a prime loan, indicating a significant rise from the one-in-five ratio last year.

The percentage of prime mortgages in foreclosure increased by 3 percent, an increase of 51 points from the number in the first quarter and a rise of 158 points from the number during the same period last year. Default rates on prime mortgages have also been rising.

In the past, foreclosure actions are largely filed for homes valued below $100,000 and houses priced between $100,000 and $300,000. In some states like California, the average sales price for bank foreclosure properties in the past was $192,031. But now foreclosures have been happening in high-end communities, where most mortgages are far above $729,750.

One example is the foreclosure of a luxury residential project in Vero Beach, Florida by Regions Bank, with the project developer owing the bank a total of $22 million.

Another is a luxury residential project in Dallas, which was planned to feature a shopping mall. It has been foreclosed by Wachovia Bank, now a unit of Wells Fargo.

Analysts said that the number of high-end foreclosure homes would have been higher if luxury-home owners do not sell their distressed homes through short sales.

To avoid the humiliation of foreclosure, many owners of high-end homes exert all efforts to sell their properties before they are foreclosed. With their business and social networks, they are able to negotiate with their lenders to accept short-sale proceeds as payments for their jumbo loans.

Banks meanwhile prefer short sales when high-end homes are involved because they lose much more in high-end foreclosures compared to what they lose in the foreclosure of lower end homes.

Across the country, bank foreclosure properties continue to impact not only the lives of defaulting homeowners, buyers and investors, but also the financial conditions of banks heavily exposed to the commercial and residential sector.

Related Posts:

• Light at the end of the tunnel for Georgia Bank Foreclosures
• New York Bank Foreclosures Linked to Fraud
• Home Foreclosures for Sale in Upscale Southwest Florida
• Bank Find Ways to Address its Growing Bank Forclosures
• Protest Against High Bank Foreclosure Property Rate

Bank foreclosure homes and foreclosed commercial properties clobbered 5 more banks, putting the total number of U.S. banks that collapsed this year as of the first week of September to 89 banks.

The Federal Deposit Insurance Corporation shuttered First Bank of Kansas City in Missouri, which had $31 million in deposits and assets, and approved the takeover of its deposits by Great American Bank, which is based in De Soto, Kansas.

The FDIC also closed two Illinois banks, namely InBank which is based in Oak Forest and Platinum Community Bank which is based in Rolling Meadows.

A major portion of the $199 million deposits in InBank will be taken over by MB Financial Bank while the brokered deposits will be supervised by FDIC. Three branches of InBank will open as MB Financial Bank. InBank also had $212 million in total assets.

Platinum Bank had $305 million in total deposits and $346 million in total assets. Since the FDIC was not able to find a buyer for Platinum, insured deposits will be paid by FDIC at Platinum Bank. Payments for social security and veteran bills enrolled at Platinum Bank will be accepted at the Palatine branch of MB Financial Bank. Just like other banks, Platinum was heavily exposed to the real estate sector, which is currently loaded with bank foreclosure homes and foreclosed commercial properties.

The FDIC also closed First State Bank in Flagstaff, Arizona, which had $105 million in total assets and $95 million in total deposits. The deposits will be taken over by Tustin, California-based Sunwest Bank.

Vantus Bank, which is based in Sioux City, Iowa, had $368 million in total deposits and $458 million in total assets when it closed. Its deposits will be taken over by Springfield, Missouri-based Great Southern Bank.

Because the FDIC insures deposits up to $250,000, the FDIC deposit insurance fund is expected to lose millions to cover the deposits: about $6 million for First Bank of Kansas, about $66 million for InBank, about $168 million for Vantus Bank, about $114 million for Platinum Bank and about $47 million for First State Bank.

Because of the continued rise in bank foreclosure homes and foreclosed commercial properties, more banks are expected to collapse in the next months and years. According to FDIC, the number of problem banks has increased to 416 on June 30, compared to 305 last March 31. The number is also the highest level reached since the collapse of savings and loan institutions in 1994.

Related Posts:

• Banks in 5 States Closed due to Defaults and Foreclosures
• Low Loss Reserves on Hopes of Fewer Bank Foreclosed Homes
• Michigan Bank Foreclosures Include Detroit Hotel
• Banks Required by FDIC to Report on Foreclosure Fund Spending
• Banks on the Brink of Disaster, Foreclosure Still Looming

The Riverside Hotel in downtown Detroit has been added to lists of Michigan bank foreclosures after Chicago-based lender Mutual Bank foreclosed on the hotel in July.

The hotel, formerly called Pontchartrain, was acquired by Florida-based investment partnership Shubh Hotels Detroit LLC in 2005. The partnership promised to renovate the ailing Pontchartrain and make it into a first-class hotel, but it failed for various reasons.

Hospitality industry analysts said the temporary closure of the Riverside Hotel, which has about 400 rooms, may improve the occupancy rates of other hotels, but on the whole, the foreclosure is not good for the city and the hospitality industry, according to Michael O’Callaghan, a top executive of the Detroit Metro Convention and Visitors Bureau.

Nonetheless, downtown Detroit still has the ability to host large conventions because of the addition of 2,000 new rooms at three casino resort hotels and at the renovated Doubletree Fort Shelby and Westin Book Cadillac hotels.

Before the foreclosure, Shubh Hotels had not paid the salaries of its employees for two months. In late June, the participants and guests of the National Baptists Convention who stayed in the hotel left early because of lack of air conditioning and problems with services.

The problems of the hotel worsened when hotel lender Mutual Bank also suffered the same fate as the hotel. At the end of July, the bank was closed by the Illinois Department of Financial and Professional Regulation Banking Division due to insolvency. The appointed receiver Federal Deposit Insurance Corporation in turn approved the application of Garland, Texas-based United Central Bank to take over Mutual Bank. The Texas bank acquired Mutual Bank’s assets, deposits and loans, including loans provided to the Riverside Hotel.

Lawyer David Findling was appointed receiver for the hotel by the Wayne County Circuit Court. Findling said the hotel needs renovations before it can operate again. He said he hopes United Central Bank puts more funds into the hotel so it can reopen and operate fully. He argued that a fully functioning hotel would get a better sales price than an unoccupied and closed hotel.

Findling also added that a vacant hotel building is not good for the image of the city which is trying its best to recover from the adverse effects of closures in the automobile industry.

According to Chuck Skelton, head of the hotel advisory firm Hospitality Advisors, the 1965-built Riverside Hotel needs around $100 million to modernize it even after a partial upgrade worth $35 million some years ago.

Related Posts:

• Banks in 5 States Closed due to Defaults and Foreclosures
• Find Repo Houses for Sale Easily in Detroit
• Michigan City Deals With Growing Bank Foreclosures
• Foreclosed New Homes Rise as Midwest Plants Close
• Central Florida Foreclosures Increased Three Times

The city of Minneapolis in Minnesota has been offering financial assistance to people who want to buy bank foreclosed homes for sale in neighborhoods severely affected by the foreclosure crisis.

Minneapolis Mayor R.T. Rybak said that so far, about 100 people had become homeowners under the city’s forgivable loan initiative which aims to have people live in foreclosed houses.

Under the Minneapolis Advantage Program, a $10,000 loan is provided for people who want to buy a foreclosure home in neighborhoods severely affected by the foreclosure problem. The funds are used for paying the initial and closing costs.

Borrowers have the option not to repay the loans if they live in the properties they had purchased for not less than five years.

City leaders are hoping that the program would help homeowners reclaim and revive communities across Minneapolis that have been suffering from high repossession rates.

Foreclosure houses could greatly affect neighborhoods as they pull down prices and values of properties in surrounding areas. City officials believed that new buyers could help a lot in fixing neighborhoods devastated by foreclosures by renovating abandoned and vacant houses.

Rybak said that the program allowed the city to invest in bringing back the economic vitality and sustainability of neighborhoods destroyed by the increasing number of foreclosed houses. He added that the program is a positive measure to getting abandoned and vacant foreclosure homes return to productive use.

Minneapolis launched the program last year with about 50 loans. Because of the success of the program, Rybak and the city council have decided to fund another set of loans this year.

The city money for the program is also supported by a $1.5 million grant from the Federal Home Loan Bank of Des Moines Affordable Housing Program. This allows enough funds to provide 200 loans.

Interested buyers could still avail of the $10,000 funds by applying for the loan through their mortgage lenders.

Minneapolis foreclosure has been rising since the start of this year. In the first quarter, foreclosure filings were made on 6,800 properties, an increase of 10 percent compared with the last quarter of 2008 and 71 percent from the first quarter the previous year.

Just like other cities across the country, the growing unemployment rate is taking up all the blame for the rising foreclosures in the city.

Related Posts:

• Bank Foreclosed House for Sale in Multicultural Chicago
• Mayors Adopt City Government Foreclosure Prevention Program
• Drop in Bank Foreclosed Home Price Drove Midwest Home Sales
• Foreclosed New Homes Rise as Midwest Plants Close
• Increase in Cash Offers for REO Property Listings in Florida