See also:
– Collapse: 100 Million Americans Don’t Have A Job!
– Foreclosures made up 26% of U.S. home sales in first quarter (CNNMoney, May 31, 2012):
NEW YORK — Homes in some stage of foreclosure accounted for more than one in four home sales during the first three months of the year, according to a report released Thursday.
Distressed properties that were either in default, scheduled for auction or bank-owned accounted for 26% of all residential sales during the first quarter, up from 22% in the previous quarter and 25% a year earlier, RealtyTrac said.
Altogether, 233,299 distressed properties were purchased during the quarter, an 8% increase from the previous quarter. Those homes sold for an average of $161,214, 27% below the average price of a home not in foreclosure.
“Foreclosure-related sales picked up in the first quarter, particularly pre-foreclosure sales where a distressed homeowner is selling to avoid foreclosure — typically via a short sale,” Brandon Moore, chief executive of RealtyTrac said in a statement.
Pre-foreclosure sales, which are often sold as short sales, hit a three-year high during the quarter “even as the average pre-foreclosure sales price dropped to a record low,” Moore said.
There were nearly 110,000 short sales in the quarter, up 25% from a year earlier and comprising 12% of all homes sold during the first quarter, according to RealtyTrac.
In short sales, borrowers who owe more on their mortgages than their homes are worth, agree with their bank to sell their homes at the lower market value. In return, the bank agrees to absorb the loss.
During the quarter, homes sold in short sales went for an average price of $175,461, the lowest level since RealtyTrac began tracking foreclosures in 2005.
Short sales are becoming the preferred method for banks to unload properties in default.
Banks typically get about 20% more for a short sale than they would for a foreclosed home. In addition, short sale deals get done much more quickly than foreclosures, which can take years to unload, during which expenses, like property taxes and insurance, mount up.
During the first quarter, it took an average of 306 days to complete a short sale, compared to 370 days for a foreclosure.
“Lenders are approving more aggressively priced short sales, which in turn is resulting in more successful short sale transactions,” Moore said.
Meanwhile, sales of properties repossessed by the banks, called REOs, fell 15% year-over-year to 123,778, comprising 14% of all sales during the quarter.
Nevada, where housing bubbled during the boom and sank during the bust, had more distressed property sales than any other state, followed by California and Georgia, RealtyTrac said.
If you are serious about what is going on in the folorcesure market…you must read this comment!Well…I am not surprise of this action by the homeowners. Homeowners are just sick and tired of the dumb actions being taken by the Lenders, servicers and the government. I am going to say this again…the so called experts and the mortgage business and the government as well…knows everything about the stock market, but have no clue about real estate. That’s the real problem. The industry is living on 50 years old plus policies that doesn’t work in a down economy. The current policies will never work when folorcesures are at its highest in the nation’s history. Remember what I am saying here…there has only been one chapter written the deal with folorcesure. It was during a growing economy. The stupidity of thinking that real estate would just continue to go up and up with NO end, was and still is just downright stupid. Everybody is still stuck on stupid here. Remember, value is a function of affordability. Nobody understands what value really means in real estate. And to top it all off, when you place value in the market place to a point that no one can afford the property…even the homeowner that just refinanced their home and cannot pay the monthly payment based on a fixed rate loan…to later lose it, because the rate just double. Hey…it’s not complicated. And the big eye opener is that the values are still declining. WOW…where did all that value go? The question is…was it there in the first place? NO…it was never there. Borrowers are beginning to realize that if they are making payments on a mortgage that is under water, every payment they make to the lender will get them nowhere. They are not building any equity because the principle balance is not going down and that they are just throwing their money down an endless well of no return.I’ve got a plan to resolve this mess. And it’s not a complex plan. We have to rewrite the workout policies, because the ones we are using today are not working and will never work and that is a message to the dumb investors who still think they are to get all of their money back in a down economy that they have lent to borrowers. That’s what capitalism is all about…you win some and you lose some. Remember investors, you can lose money too. However, the way that you are doing it, will continue to cause valuable equity to continue to be eroded and soon no one will be able to get any loans of any kind. The sad reality of this whole matter is…America is on the road to becoming a first class third world country because of greedy investors and the stupid conduct of the mortgage industry. Now that really makes me sad.