The Declared Numbers of Foreclosed Houses Are Not Giving the True Picture
Posted on January 28, 2009
Filed Under Repo Houses | 1 Comment
The declared foreclosure numbers are not giving the true picture – the truth is far grimmer than what the figures say.
A realtor of Pyramid Real Estate, L.J. Jennings say that the banks have taken off many units from the MLS listings and these are therefore not openly in the market but remaining in the sidelines as potential threats. After being repossessed by the banks a unit may not reach the market before another six months. There are two reasons – either the process is slow or the banks are doing it intentionally, said Rick Sharga of RealtyTrac.
The delay is because the lenders are not ready to manage the staggering numbers of foreclosed houses listed in the books. In 2008 the banks repossessed nearly 860,000 houses – double the figures of 2007. Before the foreclosure crisis had taken on epidemic proportions it took about a month for the banks to place a repossessed house in the market.
Lenders however are insisting that they are acting as quickly as possible. Tom Kelly of Morgan Chase said that their target is to reduce their losses on these units because keeping them entails high maintenance costs. But banks might hold back the houses that already have a high number of foreclosures so as to avoid further flooding of the market and consequent fall in prices.
Financial analyst Michael Youngblood of Five Bridges Capital said, “If lenders have a significant number of properties in a limited area, they may want to stagger putting them back on the market.” Another expert, Eve Alexander of Buyers Broker based in Florida says that the delay is because of the general ill health that has taken over the economy and the lending industry in particular. She said, “I think banks are dragging their rears about doing just about everything. They have so much going on, and there’s so much red tape and the people don’t care, nothing gets done.”
Many bank owned properties are not appearing in the MLS lists because banks are trying to get rid of them in bulk sales offering huge discounts to investors and also to individuals according to the Public Affairs Director for Mortgage Bankers Association, John Mechem. He spoke of another difficulty – the time required to get the foreclosed houses in proper condition so as to attract buyers. The foreclosed houses have never before been in such poor condition thanks to the wrath of the frustrated owners and vandals prowling around vacant units.
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[...] that of the previous year’s. The real estate industry, too, witnessed some changes. The sale of foreclosed homes dropped in August. At one point, foreclosure sales dominated the sales pattern. However, [...]