The metro areas which occupied the top of foreclosure charts over the past quarters are still on top of the charts, such as Merced and Stockton in California, but their foreclosure rates have declined.

The new cities that soared through the top 20 of the list were Reno, Nevada, whose foreclosure rate of one in 37 homes represented an 80-percent jump from the same three-month period last year. It is now ninth in the foreclosure chart.

Another is Boise, Idaho, where the pace of foreclosures jumped by a staggering 141 percent – the highest rate of increase from 2008 among all metro areas. Foreclosures in the city of Provo in Utah also soared, climbing up by 120 percent.

According to analysts, the rise in foreclosures in cities where previously investors cannot find home foreclosures in large numbers was largely caused by sharply growing job losses and the adjustment of flexible mortgage loans to higher rate levels.

In the Reno-Sparks area, the unemployment rate reached 13.1 percent in September, marking a significant rise from 12.4 percent in August and from 7.3 percent in September 2008, based on data from the Nevada Department of Employment, Training and Rehabilitation.

In the Boise-Nampa metro area in Idaho, the unemployment rate hit 9.5 percent, with the number of jobless workers rising from 15,700 workers to 27,300 workers in September this year and the total work force dropping from 292,700 to 288,000.

The unemployment rate in the Provo-Orem area in Utah meanwhile reached 5.5 percent in September, a low number compared to other city jobless rates, but very high compared to the city’s jobless rate of only 2.9 percent in September 2008.

Among all of the 203 metro areas surveyed, the Las Vegas-Paradise area still dominated the foreclosure rate chart. One in every 20 houses in the area in the July to September quarter received a default or foreclosure notice, marking a 53-percent increase compared to the same three-month period last year.

Other cities where one can find distressed home foreclosures based on third-quarter filings are Merced, Stockton, Modesto, Riverside, Bakersfield and Vallejo in California and in Cape Coral and Port Saint Lucie in Florida.

Find Home Foreclosures in Top-Ranking Cities is a post from: Foreclosure Homes Investing

Failure to pay residential property taxes do not only cause foreclosure houses on the part of the owners, but also cause multimillion shortfalls in the budgets of local governments. In turn, community services supported by local governments such as schools, fire departments, police and social services suffer.

Kenneth Parrish, treasurer of Michigan’s Kent County and head of a national organization of tax collectors, said most tax collectors across the country expect a substantial increase in the number of defaulting taxpayers and a substantial decline in property tax collections in the next several years.

As the unemployment rate rises, the number of unpaid property tax bills is expected to soar.

Tax collectors from around the country have been noticing the increase in unpaid tax bills. Property taxes are collected by local governments, so there is no single data available to measure the number of homeowners and businesses who have failed to pay their property taxes.

In Cuyahoga County where Cleveland is located, almost eight percent of taxpayers failed to pay their property tax bills in July, which is double the delinquency rate in 2005. Cuyahoga finance official Robin Darden Thomas said the county has been struggling to collect around $400 million in back taxes.

In Charleston County, South Carolina, over 13,500 taxpayers did not pay their annual property tax bills payable in March, an increase from around 10,000 delinquent taxpayers in 2007. County collector Mary Scarborough said that the county has also a lot of foreclosed houses, as people who are not paying the banks are not paying the government.

In Lee County, one of the counties most battered by foreclosed home, over 43,000 taxpayers did not pay their tax bills payable this year. The number marked an increase from the 31,000 delinquent taxpayers in 2007.

Meanwhile, Nashville tax official Charlie Cardwell said approximately 5 percent do not pay their tax bills, but he and other country officials expect an increase of 3 percent in the number of defaulting taxpayers.

According to tax collectors, real estate tax laws vary among local governments, but they said they turn delinquent residential properties into foreclosed houses if taxes are unpaid within 2 to 3 years.

Risk of Becoming Foreclosed Houses due to Unpaid Taxes is a post from: Foreclosure Homes Investing

The Florida-based realtor network is an expert in the sales as well as marketing of foreclosure properties. In addition, they are also known to provide loss mitigation services, acting as a third-party resource that provides assistance to buyers, homeowners and even real estate agents with their short sale and foreclosed for sale transactions. It currently has offices in Michigan, Georgia and Florida.

With its planned expansion in the Washington DC area, the real estate network hopes to sign up over 500 realtors who will help them with their objective of minimizing the losses brought about by the enduring housing crisis.

Of course, it also aims to prevent more homes ending up in foreclosed for sale lists by providing professional and expert advice to distressed homeowners on how to go about with a short sale transaction.

Based on the latest reports, Washington currently ranks 17th among the states with the highest number of foreclosed for sale homes for the first six months of the current year. There were 19, 855 homes that is in some state of foreclosure, a 43.01 percent increase from last year’s figure.

In the DC area, number of repo homes jumped by 39 percent for the month of June but is 19 percent lower compared to the same period last year.

Nationwide, states which posted highest foreclosure rates include Nevada, Arizona and Florida while the states of California, Arizona and Florida posted the largest foreclosure totals. All in all, there is one foreclosure filing reported for every 84 households, up by 14.66 percent from January to June of 2008.

FRT Targets Foreclosed for Sale in Washington DC is a post from: Foreclosure Homes Investing

Not only did mortgage delinquencies rise, but the number of lender modifications for loans guaranteed by Federal National Mortgage Association Foreclosures and Federal Home Loan Mortgage Corporation Foreclosures also declined.

The number of borrowers who have defaulted on their home loans guaranteed by Fannie Mae and Freddie Mac in April jumped by 6.5 percent.

Meanwhile, the number of loan modifications worked out in April fell by 12 percent to 13,800. But government housing officials said this figure is not an accurate representation of the progress of efforts to contain repossessed houses because of a revision in loan modification reporting rules.

The Home Affordable Modification Program features a trial loan modification period of three months, and these loan modifications are not yet counted until the three-month period is completed.

In April, the number of borrowers whose mortgage loans are guaranteed by Fannie Mae and Freddie Mac and who were already in default by two months or more jumped up to 1.1 million, an increase of 1.17 percent from the number in March.

The total number of mortgage defaults in April accounted for nearly 4 percent of all mortgage loans guaranteed by Fannie Mae and Freddie Mac. Out of these delinquent home loans, over 10 percent of nonprime home loans were in default by 60 days or more.

FHFA also reported that sales of repossessed houses and home sales made by third parties in April jumped up to 14,200, a substantial increase from the 9,300 units sold in March. According to FHFA officials, the increase was largely caused by sales of owner-occupied homes and vacant houses which were long identified as unqualified under all the programs of the federal government to contain repossessed houses.

Mortgage default data for April from the Mortgage Bankers Association mirrored the home loan default data of FHFA. According to the MBA, the nationwide home loan delinquency rate hit an adjusted rate of 9.12 percent, a jump from the previous level of 7.88 percent.

According to many economists, the stunning rise of the joblessness rate to 8.9 percent in April and the increased number of prime borrowers whose homes have become repossessed houses are definite signs that unemployment has cut down the ability of borrowers to pay their mortgage loans.

Mortgage Defaults Up, Repossessed Houses to Rise is a post from: Foreclosure Homes Investing

According to The Western New York Law Center’s study, one out of four repo homes for sale in Erie County from 2007 to 2008 involved subprime loans, while one out of five involved adjustable rate mortgages.

The study reported that high-cost subprime mortgages and foreclosures are still major problems in the Buffalo area. However, Buffalo never experienced the drastic rise in home prices similar to that in Arizona, California, Florida and Nevada.

The study claimed that the chronic foreclosure problem of Western New York has been going on since 2004, and it was worse than in New York City. However, the extent of the problem was underreported, according to the study.

Law Center’s senior litigation attorney Kathleen Lynch pointed out that high-cost mortgage and subprime loans are causing foreclosures in Erie County. The study reported that majority of repo homes for sale in the county from 2007 to 2008 were taken on fixed-rate loans. And almost 60 percent of loans have rates of about 7.5 percent.

The study also said that all communities and municipalities in the county have high-cost mortgage loans that became delinquent and eventually led to foreclosures. Meanwhile, 55 percent of adjustable-rate mortgages started at rates of 7.5 and 9.5 percent. However, about 20 percent of the total loans started on 12.5 percent rate.

Additionally, over 40 percent of maximum rates peaked at 15 and 17.5 percent, with 9 percent of loans having higher rates.

Lynch called for uniform and consistent reporting requirements for foreclosures and mortgage loan originations across the country. She urged for an early collection of reporting requirements, adding that if it was done earlier, the trends would have been detected immediately and a national crisis would have been prevented.

From 2004 to 2007, Erie County’s average foreclosure rate was 248 percent while Buffalo posted 40 percent or 1,110 foreclosure filings in 2007 and 894 or 39 percent in 2008.

The study was conducted to address the lack of comprehensive and accurate information about repo homes for sale in Erie County.

Study of Repo Homes for Sale Patterns in NY is a post from: Foreclosure Homes Investing

Due to foreclosures, home prices have dropped to 2002 price levels, with many sellers accepting price reductions of 25 percent or more if the buyers are ready with their cash payments or have fully pre-approved home loans.

Although mortgage rates have returned to their upward direction, rates are still low compared to previous years. First time home buyers are also helped with the $8,000 federal tax credit.

The housing market is currently ruled by home buyers, according to many property sellers and analysts. With prices pulled down by foreclosures, buyers are able to purchase larger and more beautiful homes in better neighborhoods with more amenities.

Based on homes for sale records in Chicago, the number of first time home buyers has increased in 2009, comprising more than 50 percent of all home buyers. In previous years, the share of first timers was below 35 percent.

Recently, a couple planning to retire sold their house in Homewood and then bought a two-bedroom 1,400-square-foot condo unit in River North. The condo was first offered for sale at $599,000, dropping to $550,000 in 2008. When the couple saw the condo unit, they thought the price was out of their range, but they tried making a low-ball offer of $475,000 which was surprisingly accepted.

The couple contended that the seller accepted because they were paying in cash. Property analysts said that the couple made a good deal because the condo unit had a prime Chicago address, a parking space, a large walk-in closet, a big tub and stainless steel appliances.

Foreclosures made possible what the couple could not buy in previous years.
People buying their second or third homes are also taking advantage of the market made affordable by foreclosures. A surgeon and her psychologist-wife recently purchased a large corner condominium in Water Tower for $1.2 million, almost one-third down from the initial $1.7 million listing price.

The couple and their children live in Dyer, Indiana and they plan to rent out the condo unit at break-even level while waiting for foreclosures to slow down. Their agent said they can resell the unit for $2.2 million when the housing market recovers from foreclosures.

Foreclosures Accelerating Move Ups in Chicago is a post from: Foreclosure Homes Investing

Most of these properties became government foreclosures after government agencies, such as the HUD, VA and DA, foreclosed on properties that they backed or originated. In several cases, the federal government took over foreclosure properties from private mortgage lenders.

Since 2007, the HUD has taken over more than 110,000 foreclosed homes for sale and has spent around $12.2 billion paying mortgage lenders for home loans that it backed. It has recovered only around $5.5 billion of its payments by selling most of them, with about 38,000 foreclosed properties still available for sale.

The overall number of government foreclosures is much higher if distressed properties by Freddie Mac and Fannie Mae are included in the count.

Nevertheless, the total number of government foreclosures is only a small percentage of the overall number of foreclosure properties nationwide as tracked by RealtyTrac.

Even so, Mark Bologna, director for loan guaranty service at the VA, said foreclosure properties entail additional costs for the agency. He said that VA spends for the maintenance and security of the foreclosed properties and that he expects more government foreclosures in the next several months.

Government foreclosures have risen by around 40 percent at HUD while they have doubled at DA over the past 24 months. Agriculture Department spokesperson Jay Fletcher said the rising trend in DA foreclosed homes is alarming.

The city with the biggest concentration of government foreclosures homes is Detroit. In some of the city’s neighborhoods, there are about four or more HUD foreclosure homes in the same block, together with foreclosure properties owned by private mortgage lenders.

Both the HUD and VA are marketing their foreclosure houses more aggressively to save on holding costs, but oftentimes the savings are useless as they are losing due to falling home prices. Last year, for every dollar received as payment for a sold home, HUD made a 39-cent loss while VA made a 13-cent loss for every dollar received as payment for a VA home sale.

In response to concerns about the viability of federal home loan guarantees in light of losses on government foreclosures, both Apgar and Bologna said that the government agencies have been collecting higher fees for their guarantees. They also added that the agencies also faced similar levels of foreclosures in the 1980s.

Over 50,000 Government Foreclosures Homes for Sale is a post from: Foreclosure Homes Investing

In the first quarter, the metro area covered by Phoenix, Scottsdavle and Mesa is ninth in RealtyTrac’s ranking of metro areas with the highest foreclosure rates. One home in every 40 houses was hit with a foreclosure filing in the first quarter and a total of 41,382 houses received default notices and foreclosure auction notices.

Among investors driving around Phoenix looking for foreclosure auction events and new repo properties is Lou Jarvis, an executive for real estate management company Brewer Caldwell, which has been hired by Alberta-based CBI Group to invest in Phoenix’s housing market. CBI has allotted money to buy 175 houses from foreclosure auction events in Phoenix and then turn them into rental homes.

Jarvis was a former wood molding firm co-owner who also invested in a house that has gone underwater. He said he is working to recoup his losses by working out deals in the same area where he, his adult children and brother have lost money.

One of the homes Jarvis has snapped up for CBI is a house previously owned by the Aguilars. The Aguilars said they bought the house in 1999 for only $111,000, but they refinanced it in 2006. They now regret the refinancing decision, because although they are now renting the house at an amount lower than their monthly mortgage payment, it is no longer their house.

In contrast, the purchase and rental deal has a lot of profit potential for CBI. CBI executive Jarrett Zielinski said CBI’s investment of $52,000 in the Aguilars’ house will be recouped in just five years. He said no other city housing market has fallen the way Phoenix’s market has.

Because of the apparent success of CBI’s first round of investments, it has opened another fund to finance the purchase of 160 more Phoenix homes from foreclosure auction events and from other sellers of foreclosure homes.

CBI is also planning to conduct investment seminars for its renters with the goal of making them acquire their house back.

Jarvis’ company Brewer Caldwell has already purchased about 125 homes in 2009 for CBI. About one-fourth of these homes were occupied by former owners who were willing to rent them.

Although Jarvis’ company is benefitting from foreclosure auction events in Phoenix, Jarvis is sad that he had to advise his daughter to walk away from her house whose value has declined by 60 percent.

Investors Grab Foreclosure Auction Opportunities in Phoenix is a post from: Foreclosure Homes Investing

The lenders and realtors are proposing that the $8,000 Home Affordable tax credit would also be given to all other home buyers and not only to first-time home buyers. This would help eliminate the glut of forclosure houses in foreclosure-battered states such as California and Florida.

Steve O’Connor, vice president for government affairs at the Mortgage Bankers Association, even called for an increase in the amount of the tax credit.

Previously, the mortgage lenders’ group has lauded the Housing and Urban Development Department for launching bridge loans to help first time homebuyers apply the tax credit to their down payment and closing costs. The tax credit is available for Federal Housing Administration mortgage loans originated by FHA-accredited lenders.

HUD Secretary said that he is glad that the Home Affordable tax credit can be immediately used by borrowers with the help of entities already working with FHA.
The lenders and realtors are calling on mortgage finance companies Freddie Mac and Fannie Mae to duplicate what the HUD has done to reach more buyers and speed up sales of forclosure houses.

However, a government official explained that the administration needs to see first the impact of the FHA and HUD initiative before it considers the application of the tax credit in Freddie Mac and Fannie Mae loans.

Besides, Freddie Mac and Fannie Mae do not back mortgage loans, unlike FHA, but buy the loans from secondary markets.

Also, many taxpayers have been complaining about the use of tax money to back the home purchases of groups of people. Many others fear that the generous use of the tax credit would entice financially weak first time buyers to buy and then later allow their homes to become forclosure houses.

Matt Zaborsky, owner of Maryland-based mortgage brokerage Norbeck Olney Rockville Mortgage Co., said the use of the tax credit scheme for the initial home payment is almost 100 percent financing, encouraging home buyers who cannot really afford to buy homes.

Even so, Lawrence Yun, chief economist of the National Association of Realtors, argued for the expansion of the tax credit and loan refinancing schemes to accelerate sales of forclosure houses and rejuvenate the housing market.

Call for Obama to Speed up Sales of Forclosure Houses is a post from: Foreclosure Homes Investing

In a survey performed by the American Society of Home Inspectors, although only two percent of Americans have actually purchased foreclosed homes, two-thirds might consider buying repo properties. With the significant drop in prices, investors and first time buyers are flocking to the opportunity of grabbing a good deal with the purchase.

However, foreclosed homes can present a lot of problems, particularly in as-is cash deals which appear to be the trend in the market at present. To get more discounts from the deal, investors and buyers would opt to forego inspection prior to the actual purchase, and this may result to disasters and other problems that would cost more money in the long run.

The most common problems with vacant homes are molds and mildew. This is more evident for homes that have encountered water damage in one form or another. Whole sections of drywalls and floorings might be infected with molds and would require replacement.

Another common problem for vacant homes is blight, vandalism and break-ins. Some vandalism is caused by former residents themselves who deface portions of the house prior to being evicted. Former residents may strip everything they can off the house before they go. This includes carpeting, lighting fixtures, cabinets and even whole toilets. Trash and other junks are sometimes left that would need cleanup jobs.

There are cases where the vacant homes became host to wild animals like boars, bats and even panthers who may have been displaced from their natural habitat by floods or rains. The homes may also need additional maintenance to utilities, plumbing, heating and other fixtures. A prospective buyer should look into these items first prior to purchasing a foreclosed home.

Five Potential Problems to Check for on Foreclosed Homes is a post from: Foreclosure Homes Investing