Foreclosure Homes Investing

Foreclosures: The Secret to Successful Flipping

In the world of real estate investing, there is what is referred to as “flipping”. It involves the purchase of a property, some repairs and renovation works to improve its market value and then selling the property once again for a nice profit. In order for an investor to be successful in this particular field of investment, the secret is foreclosed homes.

Foreclosure properties are actually homes repossessed from the original owner due to mortgage default. Usually sold at foreclosure auctions, these distressed properties are quite cheaper, often with asking prices that are equivalent or slightly higher than the amount of mortgage owed by the previous owner. In other words, they are sold at a fraction of their present market prices.

Of course, you will have to take into consideration that some of these foreclosures are dilapidated, abandoned and may need major repair. Nevertheless, it would not cost you as much as buying a newly-constructed or existing home for sale in the market.

For these reasons, you will discover that most real estate buyers and investors of today are getting more and more interested with the great return potential that these foreclosed houses are offering.

In any case, you should brush up on the foreclosure process and study the market as well in order to make your first foray into the world of foreclosure investing a good one. It will be better if you utilize foreclosure search tools such as foreclosure listings in order to simplify your search for the ideal property to flip. As always, check the property thoroughly before making an offer.

Flipping foreclosure properties is not for the faint of heart. You will need to be patient and creative when it comes to attracting home buyers. Always consider the things that buyers look for in a home and try to offer more incentives and discounts to fight off competition.

Foreclosures: Better Homes, Less Money

During these tough times, consumers have grown smarter when it comes to buying anything, from groceries to real estate distressed properties. Instead of checking out newly-constructed houses or existing homes, most savvy buyers are becoming interested in the savings potential of repo homes.

If you are in the market for a new home and would like to spend less, it will be smart of you to consider foreclosure auctions. But before you jump right in the foreclosure market, consider the following tips:

Understand Foreclosure – since buying a foreclosed home is basically an investment, it will not hurt if you find out as much as you can about these repossessed distressed properties. Knowing and understanding the entire foreclosure process will help you make informed decisions.
Learn the Market – if you are looking to enjoy considerable savings, it is also a good idea to learn market conditions. Find out if they are currently favoring buyers or sellers. It will make searching for the perfect distressed property easier for you as well as negotiating prices. Keep in mind that housing market conditions may vary from city to city and you should also not rely on general information regarding the entire market as they can be misleading. In other words, you should go local.
Determine Affordability – last but not the least, it is important for you to determine if the property is priced just right and if you have a ready source of fund to pay for the property. With regards to the asking price, find out the current market value of the property and check out the prices of the other foreclosure homes in the neighborhood. It is recommended that you get pre-approved first before you start your foreclosure search in order to have an idea of how much you can afford. In addition, there are the repair and renovation costs to consider so you really need to know how much money you will be working with.

Homes Now More Affordable, Thanks to Foreclosures

Declining home prices is actually one of the results of the enduring foreclosure crisis. Since homes have now become more affordable in most US cities, it is not surprising that sellers are grabbing the wonderful investment opportunities that the current market conditions are offering.

Across the nation, about 55 percent of properties being sold between the months of April and June were actually affordable for families with an income of $61,500. The data, which was gathered by the National Association of Home Builders, clearly showed how inexpensive homes have become. The median price of US homes have dropped by 10 percent from a year ago, to $215,000.

The decline in home prices is certainly good news for buyers and investors. Some are already plunging in the market while some are still waiting on the sideline, hoping that home prices decline further.

Unfortunately, the falling home prices is taking a toll on homebuilders. Because of the large inventory of existing homes for sale, home building has declined to a record low.

Leading the nation in home affordability is Indianapolis. Median home price in this city is at $108, 000 from $122,000 a year ago. On the other hand, home prices in New York remain to be among the least affordable in the market. A year ago, this title was held by the Los Angeles real estate market. Nevertheless, median home price for the Big Apple fell from $510,000 to $481,000. In a small way, this decline will still attract buyers eyeing New York properties.

There is no better time to invest in a property especially if you consider the better return potential offered by foreclosed homes. You should just make sure that you will do your homework before closing any deal. Check out information on foreclosure investing on leading websites especially those offered for free by foreclosure experts.

Maryland Foreclosure Homes Sales on a High

In U.S., the dangling trend seen in property market over a period of year has lead to an estimated 55% rise in the foreclosed property trading, with the activity surging up to 7.5% over last two months. Market valuation of properties has dwindled even in Maryland. Home sales in Maryland have shown the slump of over 30% in a period of a year as compared to the national average of 16%. With this fall, Maryland is placed at 6th position among the other states affected with the same. Also, rates of new homes are predicted to fall by atleast 10% in coming months and Maryland can be among the last to recover in this context.

Following the trend of peaking foreclosure sales nationally, Maryland foreclosure homes sales sky-rocketed up to 40% last year followed by a leap of almost 72% over the period of last two months. This can be seen with the fact that in every 741 homes, 1 is listed as foreclosure homes in Maryland. In last two months, Maryland showed an 8% rise in foreclosed home filings, mortgages by banks and auction calls. Whereas nationally, over a year, rises in mortgages by banks is around 184%, failure notices approximately 53% and auction registrations around 11%. These readings are indicative of jump in foreclosures still expected to rise not only in Maryland but all over the nation with some of the states affected the worst.

Similar trends have been observed even in Virginia with a rise of 9.3% over last two months and in Washington D.C with a rise of 7.7%. Foreclosed property listings show that in every 562 homes, 1 is filed for foreclosure in Virginia. In Washington too, property rates have declined by approximately 17% as compared to those last year. Nationally, this ratio is 1:464. The highest filing is seen in Nevada with the ratio of 1:106, followed by California with the ratio 1:182 and Florida with the ratio 1:186. The resultant effect of the foreclosure distressed property filings is such that foreclosed homes are bought by buyers at extremely low costs, far below average replacement valuation.

Washington Foreclosure Homes – Tread with Care

Rescue companies working with Washington foreclosure homes, will now need to give written contracts to homeowners with a five day period for them to back out. This is due to a law that was passed on 06/12/08 by Washington State. Also, part of the law says that if the rescue company sells the house after taking possession, then equity to the tune of 82% must be given to the home’s original owner.

Rob McKenna, the state’s Attorney General said that they weren’t trying to forbid all rescues but were giving consumers increased protection.

Owners of foreclosure homes in Washington, as in other parts of the country, have been subject to scams involving the rescue of repo properties.

The federal and state governments, therefore, are passing new laws and filing lawsuits to reduce the number of homeowners falling prey to these practices.

FBI’s Sharon Ormsby, chief of financial crimes, said the instances of scamsters pledging to save distressed properties will continue to rise. She compares it to getting to be as problematic as the problem of mortgage frauds.

The regional director for the Federal Trade Commission, Brad Elbein, said that the FTC has, in comparison with filing no cases for rescue of major foreclosures last year, filed three in this year. A particular case he spoke about concerned thousands of homeowners and millions of dollars worth of property.

Elbein also said that this problem has risen considerably in the past.

Ormsby spoke of instances where scamsters approached homeowners facing foreclosure, with the offer of acting as a go-between between them and the lenders for a fee; they would then take the fee and take-off, leaving the homeowner in a lurch.

Speaking of other instances, she said that homeowners would sign the property over to rescue agencies and then start to pay the rescue companies rent, with the knowledge that the rescue company would pay on the mortgage. The company instead, would sell the home, with none of the equity going to the original homeowner.

Owners of foreclosure homes in Washington should take extra care while dealing with rescue agencies or professionals.

The Future, the Past, of Foreclosure Homes in New York

The Governor of New York, David A. Paterson, passed a sub-prime lending reform bill into law on August 6th 2008. This is to tackle the existent New York mortgage crisis.

Gov. Paterson said that immediate effects of the bill would be felt by home owners across the state of New York. It is set to attack the faults in banking regulations in New York and provide support to home-owners part of the repo homes in New York.

Lenders now will be required to send to borrowers a distressed pre-foreclosure notice a minimum of ninety days prior to starting proceedings to foreclose on the house. This extra ninety day period has been added to the usual four hundred and forty day New York foreclosure process, making it the lengthiest in the country.

Amongst added provisions minimum standards to underwrite loans will have to be followed by lenders providing consumers with sub-prime loans with stronger protection.

Paterson said that the state has the responsibility to help families associated with the New York foreclosure homes besides reforming regulations in the banking industry to make sure that something like this doesn’t repeat itself in the future. The law has taken care of both, and urged the federal govt. to follow suit.

The housing bill that was signed by President Bush in July has provisions for borrowers who are at risk of facing foreclosures to re-finance their home loans into mortgages insured by the government at more affordable interest rates.

Will these bills in place critics now see borrowers with good credit worthiness facing hurdles acquiring mortgages, as additional costs and the challenges to follow the new regulations would possibly see banks deter from passing sound loans.

About 50,000 homes across the state have faced foreclosures this year. The state has estimated that around 38,000 more could end up facing foreclosure before this year is up. The number of New York foreclosure homes across the state of New York has risen by 14% in this year’s first quarter in comparison to last year’s first quarter.

Virginia foreclosure homes – Arlington Speak

Despite the real estate market in Arlington displaying stability, in comparison with surrounding jurisdictions, there is no absolute immunity, the problem of foreclosure auction in Virginia affecting it after all.

A report released by the Metropolitan Washington Council of Governments showed that between March 2007 and February 2008, 167 went through foreclosure in Arlington. It added that of the 167 foreclosed homes; more than one fourth were in the 3 relatively small neighborhoods of Claremont, Columbia Forest and Nauck. These neighborhoods are all located along Columbia Pike’s western border.

Claremont Civic Association’s president, John Garren, said that though there was only one repo property that he knew of in his neighborhood, there are more than 10-12 houses that have been for sale but are not selling. He said that when one saw ‘For Sale’ boards sitting in front of houses for months, there was an issue.

Stephanie Britt, president of the Columbia Forest Civic Association also shared similar views. According to her there was lesser number of foreclosures in comparison to houses that were stalled, not finding buyers. She said that despite there being a few sales, more didn’t happen because homeowners still hadn’t come to terms with the Virginia foreclosure homes problem and the fact that prices needed to be dropped further.

An active member of the Nauck Civic Association, Alfred Taylor, said he knew of around ten homes that have been foreclosed in his ethnically diverse community. In his opinion most of them were on variable rates, a large number of homeowners being Latino.

A coordinator with the County’s program for home ownership, Doug Myrick, shared similar sentiments. According to him foreclosures were tilted more towards people of color; Columbia Pike’s western end, having housing that was amongst the most affordable. Homeowners, he said received loans with no documentation.

Arlington County’s Housing Department’s head, Ken Aughenbaugh, said that his office has started classes in English, Vietnamese, Korean and Spanish for potential buyers educating them about the risks and hazards of ‘no-document’ loans. The damage created by these in the overall Virginia foreclosure homes scenario, may well be done.

New Jersey Foreclosure Homes – A Study

The Federal Reserve Bank of New York released a study on 08/04/2008 that has painted a very stark picture of New Jersey’s sub-prime mortgage crisis.

The ratio of New Jersey’s sub-prime mortgages in relation to homes being foreclosed is the country’s fifth highest.

One of the findings of the study observes that the New Jersey foreclosure homes crisis is not evenly distributed between different strata of homeowners in the state. A majority of the sub-prime foreclosure homes in New Jersey are in zip codes belonging to urban areas. This has caused specific neighborhoods with moderate incomes to suffer financial pain.

The study went on to say that for every thousand homes in New Jersey, there were three foreclosure homes belonging to the sub-prime market and also that within each county, these were neighborhoods where the residents had household incomes which were lower than in other parts of the county.

New Jersey currently has in excess of 3.47 million homes. At the end of June more than 10,446 foreclosure homes in New Jersey were on sub-prime mortgages.

The study also found that between Essex and Union existed 25%, the highest share, of the sub-prime foreclosure homes in New Jersey.

In Essex 1,127 mortgages, which account for about 75% of the sub-prime loans in foreclosure, are mainly in 11 of the total of 31 zip codes in the county. The 11 zip codes belong to Newark, Irvington,Bloomfield, Orange, West Orange and East Orange.

With them put together for every thousand homes in these eleven areas, there were 6.7 New Jersey foreclosure homes belonging to the sub-prime market. The state average is less than half of this.

A bleaker picture is presented in Union County, with 789 mortgages, which account for a majority of the sub-prime loans in foreclosure, mainly in 8 of the total of 26 zip codes in the county. The 8 zip codes belong to Union, Roselle, Plainfield, Linden, Hillside and Elizabeth.

With them put together for every thousand homes in these eight areas, there were 8.1 foreclosure homes belonging to the sub-prime market.

Arizona Foreclosure Homes – Different Measures Measure Up

Governor Janet Napolitano, said that a much need boost in efforts put in by the state of Arizona to fight the crisis surrounding the housing sector, is seen to come by in the form of the housing bill passed last week.

A report released by the Pew Charitable Trust said that over the next two years, one out of every eighteen household could be part of foreclosure homes in Arizona.

Napolitano went on to say that the state would receive benefits from provisions in the passed housing bill in the form of more options for refinancing loans and additional funds for revitalizing affected neighborhoods. The funding, she said, would help the state tackle the issues of increasing foreclosures and improving neighborhood conditions.

Napolitano, along with thirteen other governors had urged President Bush to lend his support in passing the legislation.

Arizona has also created a task force to work on prevention of foreclosures and has also set up a toll free helpline to address questions put forward by homeowners part of the Arizona foreclosure homes.

A measure passed by the Legislature and signed by Napolitano will now see the licensing of loan-originators. This move was supported by the Attorney General’s Office, the Department of Housing, the Department of Real Estate and the Arizona Department of Financial Institutions.

Only time can judge the effect of these measures on people who are part of foreclosure homes in Arizona.

J.D. Bondurant, a research analyst working with the Virginia Housing Development Authority, said that because proceedings for foreclosures were not recorded at one place in individual jurisdictions, accurate statistics were impossible to be compiled.

He went on to say that there existed a large number of high cost loans, where the borrowers would ideally qualify for conventional mortgages, leaving one with the feeling that these borrowers had been preyed upon.

While Southwest Virginia has a comparatively lower rate of foreclosures, he said that this wouldn’t take long to change due to a prevalence of possibly unstable loans with adjustable interest rates.
Homeowners with the possibility of refinancing will now breathe easier.

Pennsylvania Foreclosure Homes – Hopeful, and Then Some

Last week, a bill was signed by President Bush that is to provide aid to the struggling mortgage and housing sectors. A provision in the bill includes funds to the tune of $3.9 billion for local communities to buy and fix properties that have been foreclosed. Freddie Mac and Fannie Mae, the two governments funded mortgage guarantors are to receive federal funding, In addition, close to 400,000 home owners, including owners of foreclosure homes in Pennsylvania, could refinance their existing loans into loans with lower, more affordable fixed rates of interest.

Critics say that this is the government’s way of bailing out lenders and borrowers who have been reckless in the past. Many others in the state view this as a much needed effort on the government’s part, where the people connected with Pennsylvania foreclosure homes were looking for some relief.

In Allegheny County in Pennsylvania, 2,320 homes have been foreclosed. This has incited Sheriff William Mullen, proposing a plan, where owners of repo homes in Pennsylvania (Allegheny in particular) will have help in avoiding foreclosures. The Allegheny County Common Pleas Court has been asked to pass orders for lenders to meet borrowers who are delinquent to work on new payment plans before the property goes up for ‘sheriff’s-sale’. He sees this as a final effort to help homeowners facing foreclosure.

In Wyoming County, Dave Bollinger, the state’s officer for hazard mitigation, said that around a request for $1.4 million has been made, to be used as money for hazard mitigation. The Pennsylvania Emergency Management Agency and the Federal Emergency Management Agency are to review the application.

Tony Litwin, the County’s Commissioner expects the funds to be cleared by November.

Bollinger said that Eaton County’s request had passed, but the approval of Wyoming County’s request was still to go through, mentioning that the funds available for hazard mitigation were limited. The township of Eaton expects to receive $554,250.

Randy Ehrenzeller, Eaton Township’s supervisor said that even though it might take some months before the funds are cleared, the community was very happy with the request being approved.

Foreclosures: The Secret to Successful Flipping

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Foreclosures: Better Homes, Less Money

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Homes Now More Affordable, Thanks to Foreclosures

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Maryland Foreclosure Homes Sales on a High

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Washington Foreclosure Homes – Tread with Care

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The Future, the Past, of Foreclosure Homes in New York

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Virginia foreclosure homes – Arlington Speak

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New Jersey Foreclosure Homes – A Study

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