Most Bank Foreclosure Properties Are Primary Residences

by Peter Vernon on Foreclosure Rates

Data from the Nevada Realtors Association’s study showed that majority of Bank Foreclosure Properties are primary residences. According to the study, the over 87 percent primary residences in the foreclosure listings does not coincide to popular opinion that majority of foreclosures are investment properties, which accounted for 3.6 percent, and 8.1 percent rental homes.

Nevada Association of Realtors President Devin Reiss said that to understand the state’s foreclosure crisis, there is a need to distinguish between an unhealthy and healthy homebuyer. He believes that Nevada homeowners can help stabilize the housing market by avoiding circumstances that may result in Bank Foreclosure Properties.

The survey, conducted by NV Data Mine and SGS, also showed that over 60 percent of foreclosure properties within Nevada were owned by married couples, while 24 percent of distressed homeowners were earning below $15,000 annually.

Market data showed that in April, Nevada had the highest foreclosure numbers nationwide, with one out of 68 homeowners receiving a filing for foreclosure which was five times more than the national average. Nevada’s total Bank Foreclosure Properties rate in May was up by 111 percent compared with year ago period, but declined by 18 percent from April’s total.

Real-estate owned properties accounted for 80 percent of the state’s housing market, putting pressure on the home prices to go down.

Meanwhile, over 90 percent of foreclosures were single-detached family houses and 32 percent were between 1,500 to 2,000 square feet. Results of the Nevada Realtors’ study also showed that about 34 percent of respondents were paying more than 50 percent of their income monthly on their mortgage loans.
Homeowners who were paying 56 percent from their income to loans accounted for the largest portion in foreclosures. On the other hand, about 24 percent of respondents were paying 40 percent or less of their monthly income on mortgage loans. Additionally, 24 percent of respondents either refused to answer or were unsure about the percentage of their income that was used to pay their mortgage loans.

Furthermore, over 68 percent of respondents lost their jobs a year before their foreclosures. Meanwhile, 11.7 percent of respondents had unexpected bills to pay and 7.8 percent claimed that they had additions to their families.

Finally, 61 percent of respondents believed that the type of mortgage loan is a primary reason why their homes were turned into Bank Foreclosure Properties.