2011 March

Banks Slow to Approve Short Sales As Bank Owned Homes Continue to Rise

By Alana

Despite a continuous rise in the number of foreclosures and bank owned homes, lenders are allegedly slow to approve short sales. These types of transactions are being seen by most housing market analysts as a better alternative to foreclosure and involve the sale of homes for a price lower than what the borrower owed to banks.

The California Association of Realtors has recently conducted a survey participated by more than 2,000 respondents with regards to short sales. According to the survey, banks usually take longer than two months to respond to an offer for a short sale. Among approved offers, less than 60% eventually end up getting sold through short sales, with the remaining transactions breaking down and the properties involved ending up as Riverside bank owned homes or foreclosed properties in some other areas of California.

Some housing experts stated that promoting short sales might help lower the number of foreclosed homes and bank owned houses in California and in the rest of the U.S., but the survey results showed that getting all parties on board is not that easy. They also stated that the length of time it takes for a bank to reply to a short sale offer based on the survey results is way too long when compared with the time specified under government guidelines.

Some analysts have asserted that increasing short sale transactions will help prevent further increases in the number of foreclosures and bank owned homes in California and will aid the state's economy in its recovery. However, some housing experts also stated that the process of short sale seemed to be in need of some changes.

Although the survey was conducted only among agents in California, some members of the National Association of Realtors have asserted that similar observations have been made in other states of the U.S. They revealed that in hardest hit areas like Arizona and Nevada, banks are deemed to be ill-equipped when it comes to making decisions about short sales. Analysts stated that since real estate investments and home sales have also become a big part of most banks' operations following the housing market crisis, then they should also exert more effort getting familiar with short sales.

With foreclosures and bank owned homes continuing to rise in California, analysts expect values of properties to continue to decline and underwater mortgage numbers to rise. They argued that short sales should be promoted to help alleviate some of the foreclosure problems of the state.

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Bank Foreclosure for Sale Properties Make Builders Wary

By Alana

The high number of bank foreclosure for sale and distressed properties had made home builders in Fort Wayne, Indiana, reluctant to start any construction project once these structures were left standing for a long period of time without anyone showing an interest. However, analysts reported that confidence is growing among builders as the date for the Parade of Homes gets nearer.

The presence of foreclosures in Fort Wayne has made a lot of home builders wary of building new homes as potential buyers get fewer. The annual showcase of build-to-spec homes caught a snag last year, when among the reported 80 builders approached to participate; none showed a willingness to build unless there are buyers already lined up. However, the event will return this year and will be held in September in a subdivision at the northeastern part of the city.

This, analysts stated, showed that builders are gaining confidence and that the market is starting to improve despite the continuous flood of foreclosed homes in Indiana. Although local analysts are confident that the housing industry is starting to rebound, they do admit that the same cannot be said for the national housing market. February data showed that nationwide home building activities declined by 22.5% during the month compared with January 2011.

New houses built in February totaled 479,000 in the whole U.S., recording the second lowest total in more than 50 years. With this in mind, analysts reported that builders in Fort Wayne are being more cautious, with most of them building houses that are moderately priced and have better chances of competing with low-priced bank foreclosure for sale properties.

Majority of homes that will be built at the venue of the Parade will be priced between $250,000 and $300,000, local reports have revealed. Although this price range is still higher than the prices of homes commonly found in list of REO properties, they are much cheaper than the average price of $300,000-$500,000 planned last year. Industry analysts stated that last year's price range would have been unrealistic now, particularly with the market currently dominated by investors seeking bargain homes.

Meanwhile, although bank foreclosure for sale and distressed houses are still expected to account for a large percentage of home sales this year, most home builders believe that sales of new homes will rise in 2011. They stated that the improving economy and the stabilizing job market will help convince more buyers to go for new houses instead of purchasing distressed dwellings.

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Realtors Favor Short Sales to Lower Bank REO Properties for Sale Totals

By Alana

The number of foreclosed homes and bank REO properties for sale in California is one of the highest in the entire U.S. Realtors and market analysts have stated that short sales can help control the continuous increase in the number of foreclosed homes in the state. However, several factors are preventing transactions from getting completed.

As the number of Los Angeles bank owned homes and foreclosed properties in the rest of the state continues to rise, realtors and housing advocacy groups are exerting more efforts to find ways to stop the number from further increasing. Recently, the California Association of Realtors launched an all-out promotional campaign aimed at bringing short sales to the forefront of everyone's attention and, at the same time, calling for reforms to streamline the short sale procedure.

Analysts stated that the short sale process is a confusing and time-consuming one, resulting in more buyers favoring the purchase of California bank owned homes over buying a short sale property. The issue with the complicated process is also not helped by majority of banks allegedly taking a very long time to respond to short sale requests that most interested buyers lose patience and drop out of agreements. These factors are just some of the issues that the association's campaign was trying to address.

The group has taken out advertising pages at publications to call attention to the need for reforms. According to local reports, the campaign was particularly aimed at government officials, federal and state agencies and lender banks. The reform should allow short sales to compete with bank REO properties for sale by making the process simpler and easier to complete.

Meanwhile, some bank officials have stated that there is nothing much that the banking industry can do. They argued that short sales are just inherently complex, mainly because of multiple parties involved in the transaction. In comparison, when buying bank and Fannie Mae foreclosures, it is only the buyer and the seller that are involved. They further added that, in a short sale, several investors are often part of the transaction, particularly in cases when there is more than one mortgage holder.

The goal to establish a uniform process or a procedure as simple as the one used in purchasing bank REO properties for sale is practically impossible, some lenders have stated. They argued that a standardized process cannot be enacted as short sales often differ from one situation to another.

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Cold Weather Kept Buyers of Bank Foreclosure Properties Indoors

By Alana

Sales of bank foreclosure properties and other residential real estate have stalled in Missouri as the cold weather forced potential buyers to stay indoors. According to a report from the Federal Reserve, consumer spending has stalled in Missouri and in other U.S. areas as winter storms hammer various regions.

Local realtors have reported that a big number of Saint Louis foreclosures, as well as houses in Kansas and in the rest of the state have remained unsold as February ends. They reported that the residential property market has come to an almost standstill. As the weather gets worse, realtors revealed that housing prices further declined and sales continued to tank for both new houses and existing dwellings. However, most of them are optimistic that home buying activities will pick up come spring.

With Missouri foreclosures piling up as buyers stay away from the market, the home building sector is also affected, realtors have added. They reported that housing starts have remained flat in Kansas City and in most Missouri markets, although house builders are reporting higher traffic, with more people inquiring about properties for sale. While the residential property market is barely moving, commercial real estate is reportedly showing some signs of life.

As bank foreclosure properties remain unnoticed, commercial properties are reportedly catching the eye of more investors. The segment has posted increasing sales since January and leasing activities are also said to be picking up. Vacancy rates among commercial structures in the state have gone down, although most commercial property owners are unable to initiate expansions and take advantage of the high activities mainly because of continuous increases in the prices of raw materials.

Analysts revealed that it is not only the market for real estate owned homes and newly built houses that have been affected by the cold weather, but also the retail sector. In Missouri and in neighboring states like Kansas, Colorado and Wyoming, retail sales have gone down. This forced a lot of retailers to cut down store hours and temporary layoff some of their workers. Sales of automobiles also declined as buyers stay indoors. Despite a slowdown in retail sales and house buying activities, both industries are confident that they will surge once the weather gets better.

Real estate experts are predicting huge improvements in buying activities involving bank foreclosure properties and newly-built houses in the coming spring as pent up demand makes up for the slow first two months. They also predict higher sales for the retail sector in a couple of months or so.

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More Buyers of Bank Owned Homes Foreclosures Use Cash

By Alana

The number of buyers of bank owned homes foreclosures that are using cash to close their purchases increased in California. The trend, according to realtors, has also spilled over the more expensive residential property markets, something that has not been seen often in the past.

In January of this year, buyers of San Francisco bank owned homes, condominiums and non-foreclosed properties who used cash to secure their deals accounted for 30.9% of all residential sales transactions in California. According to realtors, the increase in the number of all-cash deals in the state's housing industry is buoyed by the low prices of properties, which make it easier for buyers to come up with enough money to close deals.

However, it is not only buyers of low-priced bank owned foreclosures in California who are relying on cash transactions to get properties. Realtors have reported that even high-priced dwellings in the luxury residential property segment are increasingly getting snatched by all-cash buyers. According to realtors, around two-thirds of housing sales in the priciest communities of Southern California have been completed using cash payments.

Paying in cash might be easier if the buyer is seeking bank owned homes foreclosures since most of them are offered at bargain prices, but it is not that easy when buying luxury houses, particularly in California, where prices of homes have remained more expensive than most U.S. markets. However, more buyers of pricey dwellings have reportedly opted for full cash payments in the past few months.

Housing analysts stated that in such cases, it is more about not having much choice as majority of lenders are refusing to finance jumbo mortgages for fear of suffering another mortgage market meltdown. In addition, investors are reportedly expecting prices of government repo homes and other types of residential properties to rise soon. Most have expressed an optimism that in the coming few years, they will get massive returns from their housing industry investments.

The rise in the number of all-cash transactions involving bank owned homes foreclosures can be seen in almost all parts of the U.S. However, California is one of the first areas where luxury homes are getting purchased by buyers who pay cash.

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Bank Foreclosures Information

Information, Articles and News About Bank Foreclosures

Banks Slow to Approve Short Sales As Bank Owned Homes Continue to Rise

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Bank Foreclosure for Sale Properties Make Builders Wary

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Realtors Favor Short Sales to Lower Bank REO Properties for Sale Totals

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Cold Weather Kept Buyers of Bank Foreclosure Properties Indoors

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More Buyers of Bank Owned Homes Foreclosures Use Cash

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