Bank Foreclosures Sale Articles

The sales pace of foreclosed houses for sale and other residential properties is being influenced by the loan limits imposed by the U.S. Federal Housing Administration, based on a study of residential real estate sales nationwide.

Housing units, including foreclosed houses for sale, priced below $417,000 are selling much faster than homes priced above $417,000 – the price limit set by FHA for home loans that it buys in most areas across the U.S.

Because more than half of all home buyers who purchased pre-owned homes and foreclosed houses for sale in recent months were first-time home buyers, most of the properties bought were priced below $417,000 – the FHA loan limit.

Unlike during the housing boom in 2006 and 2007 when even first-time home buyers were buying higher-priced homes, first-time home buyers now are very conscious about their ability to sustain monthly payments.

Also, they are now considering and using FHA loans, unlike before when many prospective home buyers were ignoring FHA loans because of the loan limits.

Lawmakers increased FHA loan limits to address the needs of home buyers in high-cost areas, but still, many homebuyers in recent months preferred foreclosed houses for sale and other properties priced below the FHA loan limit of $417,000.

In 76 high-cost counties across the country, lawmakers allowed Fannie Mae and Freddie Mac to increase the loan limit of $417,000 to $729,750. But the higher loan limit is set to drop to $625,000 in January next year.

In 600 other areas of the country, lawmakers have increased the $417,000 loan limit to amounts ranging from $417,001 to the higher limit of $729,750.

However, despite the increase in FHA loan limits, mortgage lenders are still wary about providing jumbo loans because investors in mortgage-backed securities have not returned to the market.

Economist Lawrence Yun said the jumbo housing market is not moving because even people who have the needed income level to buy higher-priced homes have not been buying because of the higher mortgage rates for jumbo loans.

According to recent real estate sales data, home loans higher than $417,000 comprised only ten percent of the home mortgage market in eleven states and Washington, D.C. This figure shows that foreclosed houses for sale and other homes priced below $417,000 comprised the bigger portion of recent housing sales.

Two months after the federal initiative, Making Home Affordable was launched, JPMorgan Chase and Co. was able to modify about 138,000 troubled mortgage loans. The initiative is designed to contain the number of bank foreclosure property in the country.

The total trial mortgage modifications initiated by JPMorgan Chase include 87,000 loans altered under the Making Home Affordable program and additional 50,900 mortgages through the bank’s own modification program.

Under the program, a distressed homeowner can modify his loan to reduce payments for interest, principal, hazard insurance and property taxes to about 31 percent of his gross income. The modification usually involves extending the loan terms or reducing interest rates to help homeowners protect their homes from becoming bank foreclosure property.

According to Chase, its loan modification plan is the same as the one used for troubled homeowners who failed to qualify for the federal program. JPMorgan Chase retail financial services director Charlie Scharf said that the bank has made significant progress since the federal program was launched last April 6.

He said that the bank was able to help distressed homeowners with its trial loan modifications by increasing its capacity through hiring more people, expanding its office space and technology investment.

He added that JPMorgna Chase understands the desperation of many homeowners to save their homes from becoming bank foreclosure property and they need to hear from the bank as quickly as possible. He said that the bank is committed to do all the necessary things to help distressed borrowers who qualify for the programs.

According to JPMorgan Chase, it has successfully met the demand for serving troubled homeowners by hiring nearly 950 loan counselors in its various operations across the country. The bank now has a total of 3,500 loan counselors and plans to hire more in the coming weeks.

Furthermore, the bank has hired about 2,000 employees for its mortgage operations and opened about 27 Chase Homeownership Centers across the country. It claimed that over 20,000 troubled homeowners visited the centers.

On the other hand, a report released by federal regulators, the Office of Comptroller of the Currency and the Office of Thrift Supervision stated that loan modifications across the country have increased.

The report noted that when distressed homeowners got reduced payments, the number of bank foreclosure property rates dropped.

Growth in 29 cities in Palm Beach and Broward counties has been severely affected by the increasing number of bank foreclosure homes and the worsening economy.

Between 2007 and 2008, an exodus of residents from both counties was reported. However, a significant number of relocation has been noted in South Florida which prevented a declining population in both counties.

South Regional Planning Council’s Richard Ogburn said that the large growth experienced by towns and cities in South Florida early in 2000 is not happening due to the unabated spread of bank foreclosure homes and recession.

Population in both counties was almost flat, with Broward growing by about 2,500 people to 1.75 million and Palm Beach totaling 1.265 million in population, growing by 4,900.

U.S. Census’s July 2007 to July 2008 data showed that 161 cities in Florida experience a drop in population. The biggest drop in Broward’s population occurred in Pembroke Pines, Coral Springs and Plantation, with each losing over 200 residents for the period.

City officials and planners noted that cities with the most population decline have been among those with the highest growth nationally since 2000. Ogburn tried to play down the figures saying that they are relatively small and the cities are in the process of enticing people in.

Miramar posted the highest population gain among cities in Broward, while Delray Beach and Boynton Beach continue to gain residents since last year but in a slower pace.

Boynton Beach Manager Kurt Bressner said that the reported population increase, albeit slow, is good news for the city. He said that the city lost about 190 people in 2008. But he noted a significant migration activity in the city, attributing it to developments in the area, especially in Congress Avenue and downtown marina where 1,900 units were added.

Meanwhile, the 200 bank foreclosure homes in Plantation resulted to the city’s lost of 205 people. On the other hand, industry experts expected South Florida’s growth to pick up again. But the decline in population is forcing some city officials to recognize the need for changes in their areas, according to Ogburn.

German lending company, Bayerische Landesbank has filed a bank owned foreclosure lawsuit against developer Manhattan Capital and its business partner, RREEF Global Opportunities Fund, a Deutsche Bank subsidiary.
The lender sued the Midtown-based developer in connection with the defaulted loans amounting to $51.7 million for a condominium conversion project located in New York City. Both Manhattan [...]

Many industry experts agree that the market is ripe for homebuyers and investors who want to buy properties on bank foreclosure list. First time homebuyers or investors are taking advantage of the low housing prices, reduced interest rates and tax incentives, according to experts.

A panel of consumer advocates and government officials told participants at the National Association of Real Estate Editors conference not to expect an end to bank forclosure listings anytime soon.

Florida neighborhoods severely affected by the foreclosure crisis may find revitalization soon with an initiative funded under the Neighborhood Stabilization Program.

A new strategy will be adopted by officials of the city of Richmond in California as part of their proactive stance in preventing bank owned foreclosures from becoming blights in neighborhoods.

Next year until 2012, the number of foreclosed homes for sales in Riverside, California will increase significantly as borrowers who took out adjustable rate mortgage loans in the past 3 years will default, according to a study submitted to the County Board of Supervisors by scholars of California State Fullerton.

The foreclosure crisis in Massachusetts took another victim as the Stone Hotel Motel is scheduled for Bank Owned Foreclosures auction on July 2. The over 40-room property located in South Harwich is assessed at $1,233,900, with annual taxes of $7,771.