Buy Bank Homes in Orange, CA Where Defaults Are Still High

by Donald Hanz on States

Investors are advised to buy bank homes in Orange County, California where mortgage defaults are still high and where profit prospects are great.

In October, banks have started foreclosure proceedings on 2,152 residential properties in Orange, down by more than 3 percent from proceedings in September but up by an overwhelming 133 percent from filings in October 2008.

The number of delinquencies also dropped, marking the third consecutive month that defaults fell in the county. The decrease could have been the result of the intensified efforts of federal agencies to pressure mortgage lenders and servicers to modify loans. According to the latest report from the Making Home Affordable Program, it has modified about one-fifth of all qualified home loans nationwide that were in default by at least 2 months.

In October, the total number of Orange County homes and condo units foreclosed and repossessed by banks climbed up to 763 units, an increase of nearly 8 percent from September and by 3.5 percent from October 2008.

Over the past three months, foreclosure activity slowed in Orange County, so analysts are still uncertain about how to interpret the rise in foreclosures in October in the county. But investors planning to buy bank homes have an additional 763 units to choose from.

Besides, many housing analysts still expect another uptick in foreclosures in the coming months because of the high unemployment rate in California, the resetting of adjustable mortgage loans and the redefault of modified loans.

The unemployment rate in Orange County in September was still high at 9.4 percent, despite its drop from 9.8 percent in August. Statewide, the jobless rate was 12 percent, based on data from the California Employment Development Department.

Meanwhile, both home sales and prices climbed up in October in 25 zip codes in Orange County while home prices increased in 40 zip codes by nearly 4 percent compared to October 2008.

Throughout the county, a total of 3,082 residential units were sold in October, marking an increase of more than 9 percent compared to sales in October last year. The October median sales price of $435,000 was 18 percent above the lowest median in 2009, which was the January median of $370,000.

But sales prices for single-family homes were still selling for 33 percent below their 2007 peak while condo units were still selling for 34 percent below their 2006 peak.

Investors planning to buy bank homes in Orange County have great profit prospects because of the positive trend of home prices in the county.

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