Short Sales: How Investors, House Hunters Find Real Estate Deals - Investors.com

Boy do we have a deal for you.

It's a message that real estate agents are able to relay to clients more often these days as new rules have made it easier for short-sale properties to hit the market before they are in the foreclosure process.

"Realtors are aggressively peddling them," said Rick Sharga, executive vice president of Carrington Mortgage Holdings. "The buyers' agents are looking for these opportunities for traditional homebuyers or investors."   

Read more...  http://news.investors.com/business-inside-real-estate/031413-648059-realtors-websites-give-investors-short-sale-leads.htm?ven=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:%20BusinessRss%20(Business%20RSS)

Short Sales: How Investors, House Hunters Find Real Estate Deals - Investors.com

Boy do we have a deal for you.

It's a message that real estate agents are able to relay to clients more often these days as new rules have made it easier for short-sale properties to hit the market before they are in the foreclosure process.

"Realtors are aggressively peddling them," said Rick Sharga, executive vice president of Carrington Mortgage Holdings. "The buyers' agents are looking for these opportunities for traditional homebuyers or investors."   

Read more...  http://news.investors.com/business-inside-real-estate/031413-648059-realtors-websites-give-investors-short-sale-leads.htm?ven=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:%20BusinessRss%20(Business%20RSS)

Short Sales Surge Before Foreclosure, But Take Long BAC JPM WFC C - Investors.com

Sales of foreclosed homes by lenders are so 2012. Short sales are the hot 2013 real estate trend.

Regulations and reprisals from the real estate bust are making earlier short sales — selling a property for less than the amount owed — more attractive to lenders than repossessing homes through foreclosure, and then selling them.

This may represent an opportunity for investors and homebuyers who can bring cash to the table, while promised lender streamlining of short sales could make the purchase process easier.

"We'll see more pre-foreclosure sales completed than REO (bank-owned home) sales in 2013," said Daren Blomquist, vice president at foreclosure tracker RealtyTrac.

He says pre-foreclosure sales, the sale of homes in default or set for auction, rose 12% from a year ago in the fourth quarter and 6% in 2012.

Troubled properties are increasingly going to short sale before they end up deep in the foreclosure process. Nonforeclosure short sales — sales of properties not in the foreclosure process — have accelerated. They rose 17% in the fourth quarter from the year before, though just 4% in all of 2012. But sales of REO homes fell 15% in 2012.

Banks seemed unable or unwilling to do short sales a couple of years ago. But new laws and government settlements have helped change their minds. Blomquist says lenders are even contacting some underwater homeowners pre-emptively, before beginning the foreclosure process, to suggest a short sale.

With home values still off substantially from the housing bubble and many Americans strapped for cash, plenty of homes could end up being eligible for short sale.

RealtyTrac says 10.5 million U.S. mortgages, a quarter of all mortgages nationwide, are seriously underwater but not yet in foreclosure. In its report on 2012 distress sales, RealtyTrac notes that nonforeclosure short sales in Nevada grew 86% year-over-year, and 23 states posted annual increases in nonforeclosure short sales. Also, in 14 states, short sales comprised more than a quarter of all home sales for 2012.

Shorter Short Sales?

Time and money are two things to watch carefully in short sales.

Mario Gonzalez, a Las Vegas real estate investor, says the best-case scenario for closing a short sale is "five to six months." While several lenders say they're making short sales shorter, Gonzalez says he hasn't seen "that process work yet.

"I have a short-sale property that I put in escrow last February and still don't have an approval," he said.

http://news.investors.com/business-inside-real-estate/022813-646197-short-sales-rise-as-foreclosure-alternative.htm?ven=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:%20BusinessRss%20(Business%20RSS)

Short Sales Surge Before Foreclosure, But Take Long BAC JPM WFC C - Investors.com

Sales of foreclosed homes by lenders are so 2012. Short sales are the hot 2013 real estate trend.

Regulations and reprisals from the real estate bust are making earlier short sales — selling a property for less than the amount owed — more attractive to lenders than repossessing homes through foreclosure, and then selling them.

This may represent an opportunity for investors and homebuyers who can bring cash to the table, while promised lender streamlining of short sales could make the purchase process easier.

"We'll see more pre-foreclosure sales completed than REO (bank-owned home) sales in 2013," said Daren Blomquist, vice president at foreclosure tracker RealtyTrac.

He says pre-foreclosure sales, the sale of homes in default or set for auction, rose 12% from a year ago in the fourth quarter and 6% in 2012.

Troubled properties are increasingly going to short sale before they end up deep in the foreclosure process. Nonforeclosure short sales — sales of properties not in the foreclosure process — have accelerated. They rose 17% in the fourth quarter from the year before, though just 4% in all of 2012. But sales of REO homes fell 15% in 2012.

Banks seemed unable or unwilling to do short sales a couple of years ago. But new laws and government settlements have helped change their minds. Blomquist says lenders are even contacting some underwater homeowners pre-emptively, before beginning the foreclosure process, to suggest a short sale.

With home values still off substantially from the housing bubble and many Americans strapped for cash, plenty of homes could end up being eligible for short sale.

RealtyTrac says 10.5 million U.S. mortgages, a quarter of all mortgages nationwide, are seriously underwater but not yet in foreclosure. In its report on 2012 distress sales, RealtyTrac notes that nonforeclosure short sales in Nevada grew 86% year-over-year, and 23 states posted annual increases in nonforeclosure short sales. Also, in 14 states, short sales comprised more than a quarter of all home sales for 2012.

Shorter Short Sales?

Time and money are two things to watch carefully in short sales.

Mario Gonzalez, a Las Vegas real estate investor, says the best-case scenario for closing a short sale is "five to six months." While several lenders say they're making short sales shorter, Gonzalez says he hasn't seen "that process work yet.

"I have a short-sale property that I put in escrow last February and still don't have an approval," he said.

http://news.investors.com/business-inside-real-estate/022813-646197-short-sales-rise-as-foreclosure-alternative.htm?ven=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:%20BusinessRss%20(Business%20RSS)

Soon You Can Flee Your Underwater Home. But It Will Cost You - Yahoo! Finance

For some homeowners, March 1 will be Liberation Day. That’s when Fannie Mae and Freddie Mac will start allowing some homeowners who have been stuck in their homes—unable to move because they owe more than the property is worth—to relinquish the houses and cancel their debt.

Read more: Soon You Can Flee Your Underwater Home. But It Will Cost You - Yahoo! Finance

Soon You Can Flee Your Underwater Home. But It Will Cost You - Yahoo! Finance

For some homeowners, March 1 will be Liberation Day. That’s when Fannie Mae and Freddie Mac will start allowing some homeowners who have been stuck in their homes—unable to move because they owe more than the property is worth—to relinquish the houses and cancel their debt.

Read more: Soon You Can Flee Your Underwater Home. But It Will Cost You - Yahoo! Finance

Freddie Mac's New Short Sale Process ‘Beginning to Take Hold’

Freddie Mac's Standard Short Sale program has been in effect for close to three months, and the GSE continues to work to publicize the program and inform borrowers of their options, most recently in a blog post Tuesday on Freddie Mac's website.

Read more... http://www.dsnews.com/articles/freddie-macs-new-short-sale-process-beginning-to-take-hold-2013-01-23

Freddie Mac's New Short Sale Process ‘Beginning to Take Hold’

Freddie Mac's Standard Short Sale program has been in effect for close to three months, and the GSE continues to work to publicize the program and inform borrowers of their options, most recently in a blog post Tuesday on Freddie Mac's website.

Read more... http://www.dsnews.com/articles/freddie-macs-new-short-sale-process-beginning-to-take-hold-2013-01-23

DFW Real Estate Investments: Bank of America Looking to Decrease Amount of Short Sale Transactions as of 1/15/2013

For homeowners considering a short sale with Bank of America, this is extremely important to take note of. The summary of this announcement is that Bank of America is going to continue through the foreclosure process if a homeowner files for a short sale until all parties have a contractual agreement to perform a short sale. While that may not be difficult for a buyer and a seller to agree upon, the approval of the assigned "short sale specialist" representing BofA can and will take 3-9 months to sign an approval.  Read more...  http://dfwinvestmenthomenews.blogspot.com/2013/01/bank-of-america-looking-to-decrease.html?m=1

DFW Real Estate Investments: Bank of America Looking to Decrease Amount of Short Sale Transactions as of 1/15/2013

For homeowners considering a short sale with Bank of America, this is extremely important to take note of. The summary of this announcement is that Bank of America is going to continue through the foreclosure process if a homeowner files for a short sale until all parties have a contractual agreement to perform a short sale. While that may not be difficult for a buyer and a seller to agree upon, the approval of the assigned "short sale specialist" representing BofA can and will take 3-9 months to sign an approval.  Read more...  http://dfwinvestmenthomenews.blogspot.com/2013/01/bank-of-america-looking-to-decrease.html?m=1

California Broker Explains Short Sale Lease Back Program

Short sales are quickly becoming a popular alternative to foreclosure, even outpacing REO sales in certain states, according to data from RealtyTrac.  Read more...  http://www.dsnews.com/articles/california-broker-explains-short-sale-lease-back-program-2013-01-14

California Broker Explains Short Sale Lease Back Program

Short sales are quickly becoming a popular alternative to foreclosure, even outpacing REO sales in certain states, according to data from RealtyTrac.  Read more...  http://www.dsnews.com/articles/california-broker-explains-short-sale-lease-back-program-2013-01-14

RealtyTrac: Short Sales, Pre-Foreclosure Sales Increase in Q3

Although short sales continue to be utilized more and more as an alternative, RealtyTrac suggested the trend may change if the Mortgage Debt Relief Act of 2007 does extended.

According to RealtyTrac's Q3 foreclosure and short sales report, short sales increased quarterly and yearly by 15 percent and 17 percent, respectively. Out of all residential sales, short sales represented about 22 percent of the total in Q3.  Read more:  http://www.dsnews.com/articles/realtytrac-short-sales-increase-in-q3-2012-12-06

RealtyTrac: Short Sales, Pre-Foreclosure Sales Increase in Q3

Although short sales continue to be utilized more and more as an alternative, RealtyTrac suggested the trend may change if the Mortgage Debt Relief Act of 2007 does extended.

According to RealtyTrac's Q3 foreclosure and short sales report, short sales increased quarterly and yearly by 15 percent and 17 percent, respectively. Out of all residential sales, short sales represented about 22 percent of the total in Q3.  Read more:  http://www.dsnews.com/articles/realtytrac-short-sales-increase-in-q3-2012-12-06

Valley agent did well by focusing on SHORT SALES - USATODAY.com

In 2005, at the height of the housing-market boom, real-estate agent Greg Markov met with a woman who had gotten in over her head with a large loan and mortgage she couldn't afford.

Phoenix Heritage Real Estate Group

Where: 17235 N. 75th Ave., Suite C-150, Glendale.

Employees: Six.

Interesting stat: Short sales increased 33 percent from January2011 to January 2012, according to RealtyTrac, a provider of real-estate information.

Details: (602) 253-4030, phoenixheritage.com.


It was Markov's first short-sale transaction, and it planted the seed for Phoenix Heritage Real Estate Group, his Glendale firm that specializes in short sales.

At the time, Markov was doing well as an agent for another company. But there weren't many colleagues who could advise him on the challenges with this type of sale.

"The reaction at the firm was, 'OK, what do we do with this?' We were in an up market. It was an anomaly," Markov recalled.

In a short sale, the lender agrees to let the home be sold for less than the full amount still owed.

After navigating the bank maze, managing the expectations of the seller and buyer and working through other details specific to a short sale, Markov started to notice a pattern with homeowners in what was, at the time, a pleasant housing climate. He knew that his first short-sale client, who "had no business getting a loan in the first place," was not a unique situation.

In 2006, Markov, a sailing enthusiast, anticipated the wind shift. He left the firm and started Phoenix Heritage, which is licensed by Arizona-based brokerage HomeSmart Real Estate, with the intention of focusing on short sales.

Markov and his former business partner put their company's signs around abandoned facilities. Soon, they were getting 100 calls each day. By the start of 2007, Markov's new business was getting busier.

In the firm's first year, Markov had five listings. By the end of 2007, he had 100. Currently, he has 30-50 on any given day.

His team consists of agents who specialize in certain aspects of the process. For example, Markov realized early on that potential buyers had needs that were just as important as those of the sellers. He brought on specialists to handle that dynamic.

Markov said he has received considerable business from buyers who had met with other agents who didn't understand the process and tried to steer them away from short-sale properties.

A native of Moscow, Markov emigrated from Russia to the United States with his family and settled in Phoenix, where he graduated from North High School. He attended Grand Canyon University but left before graduating to enter the software-development industry.

After a few years, Markov got burned out and started going to real-estate school.

A year later, the software company he was working for was sold, and the new owners let all employees go. He used his severance as capital for getting started in his new career.

When Markov started Phoenix Heritage, his was among the first local agents to deal with short sales. Finding experts to learn from was difficult, but he found an agent in Michigan who agreed to coach him over the phone for a fee.

"We would say, 'short sale,' and people asked if it was like short-selling in stock. That's how little we knew about it," Markov said.

That's when Markov started teaching short-sale classes to agents.

"If you can't get a good education, then start offering it," he said. "There's no better way to learn than to teach."

Markov also faced skeptics who believed Markov's business model was based on a fleeting trend and who didn't think the housing crash would last. Some agents thought it was a fluke and decided to wait it out.

"Some took a longer vacation and thought it would go back to business as usual," he said.

Other real-estate veterans were hesitant to learn about short sales.

"Some looked at me sideways and said, 'That's for you youngsters,'" said Markov, 35, who was 30 when he started teaching short-sale classes.

Today, Markov teaches classes of 50-150 agents across the country and tailors his curriculum to the state he visits. He recently published a free online short-sale book.

Phoenix resident Patrick McNamara contacted Markov after hearing about him from real-estate agents who took Markov's class. McNamara was faced with a residential short sale and hoped to avoid the horror stories he heard from others who had gone through the process.

McNamara was so pleased with how smoothly the transaction went, he has recommended Phoenix Heritage to friends and colleagues.

"They were absolutely phenomenal. He has a well-oiled machine in place where each person on his team has a certain set of responsibilities and each excels at what they do," McNamara said. "With all of that, the client benefits."

A combination of diligence and creativity has been vital to Markov's success, he said.

"Short sales can be a mine field. You need to commit to doing them well, doing them right. Only a couple of bad things need to happen before you get a bad reputation," he said.

"You need to constantly reinvent yourself and figure out how to do it better."

By Georgann Yara, Special for the Republic|azcentral.com Aug 21, 2012



Valley agent did well by focusing on SHORT SALES - USATODAY.com

Valley agent did well by focusing on SHORT SALES - USATODAY.com

In 2005, at the height of the housing-market boom, real-estate agent Greg Markov met with a woman who had gotten in over her head with a large loan and mortgage she couldn't afford.

Phoenix Heritage Real Estate Group

Where: 17235 N. 75th Ave., Suite C-150, Glendale.

Employees: Six.

Interesting stat: Short sales increased 33 percent from January2011 to January 2012, according to RealtyTrac, a provider of real-estate information.

Details: (602) 253-4030, phoenixheritage.com.


It was Markov's first short-sale transaction, and it planted the seed for Phoenix Heritage Real Estate Group, his Glendale firm that specializes in short sales.

At the time, Markov was doing well as an agent for another company. But there weren't many colleagues who could advise him on the challenges with this type of sale.

"The reaction at the firm was, 'OK, what do we do with this?' We were in an up market. It was an anomaly," Markov recalled.

In a short sale, the lender agrees to let the home be sold for less than the full amount still owed.

After navigating the bank maze, managing the expectations of the seller and buyer and working through other details specific to a short sale, Markov started to notice a pattern with homeowners in what was, at the time, a pleasant housing climate. He knew that his first short-sale client, who "had no business getting a loan in the first place," was not a unique situation.

In 2006, Markov, a sailing enthusiast, anticipated the wind shift. He left the firm and started Phoenix Heritage, which is licensed by Arizona-based brokerage HomeSmart Real Estate, with the intention of focusing on short sales.

Markov and his former business partner put their company's signs around abandoned facilities. Soon, they were getting 100 calls each day. By the start of 2007, Markov's new business was getting busier.

In the firm's first year, Markov had five listings. By the end of 2007, he had 100. Currently, he has 30-50 on any given day.

His team consists of agents who specialize in certain aspects of the process. For example, Markov realized early on that potential buyers had needs that were just as important as those of the sellers. He brought on specialists to handle that dynamic.

Markov said he has received considerable business from buyers who had met with other agents who didn't understand the process and tried to steer them away from short-sale properties.

A native of Moscow, Markov emigrated from Russia to the United States with his family and settled in Phoenix, where he graduated from North High School. He attended Grand Canyon University but left before graduating to enter the software-development industry.

After a few years, Markov got burned out and started going to real-estate school.

A year later, the software company he was working for was sold, and the new owners let all employees go. He used his severance as capital for getting started in his new career.

When Markov started Phoenix Heritage, his was among the first local agents to deal with short sales. Finding experts to learn from was difficult, but he found an agent in Michigan who agreed to coach him over the phone for a fee.

"We would say, 'short sale,' and people asked if it was like short-selling in stock. That's how little we knew about it," Markov said.

That's when Markov started teaching short-sale classes to agents.

"If you can't get a good education, then start offering it," he said. "There's no better way to learn than to teach."

Markov also faced skeptics who believed Markov's business model was based on a fleeting trend and who didn't think the housing crash would last. Some agents thought it was a fluke and decided to wait it out.

"Some took a longer vacation and thought it would go back to business as usual," he said.

Other real-estate veterans were hesitant to learn about short sales.

"Some looked at me sideways and said, 'That's for you youngsters,'" said Markov, 35, who was 30 when he started teaching short-sale classes.

Today, Markov teaches classes of 50-150 agents across the country and tailors his curriculum to the state he visits. He recently published a free online short-sale book.

Phoenix resident Patrick McNamara contacted Markov after hearing about him from real-estate agents who took Markov's class. McNamara was faced with a residential short sale and hoped to avoid the horror stories he heard from others who had gone through the process.

McNamara was so pleased with how smoothly the transaction went, he has recommended Phoenix Heritage to friends and colleagues.

"They were absolutely phenomenal. He has a well-oiled machine in place where each person on his team has a certain set of responsibilities and each excels at what they do," McNamara said. "With all of that, the client benefits."

A combination of diligence and creativity has been vital to Markov's success, he said.

"Short sales can be a mine field. You need to commit to doing them well, doing them right. Only a couple of bad things need to happen before you get a bad reputation," he said.

"You need to constantly reinvent yourself and figure out how to do it better."

By Georgann Yara, Special for the Republic|azcentral.com Aug 21, 2012



Valley agent did well by focusing on SHORT SALES - USATODAY.com

Sales of foreclosure homes rose in 1Q

LOS ANGELES - -- Homes in some stage of the foreclosure process saw their share of overall U.S. home sales grow in the first quarter even as sales of bank-owned homes fell.

The increase was driven by a spike in short sales, or homes that sell for less than what the owner owed on their mortgage, foreclosure listing firm RealtyTrac Inc. said Thursday.

Short sales make up the vast majority of homes sold while still in the foreclosure process. Those that aren't sold or auctioned off typically end up being repossessed by banks, what most people commonly think of as foreclosures.

In the first quarter, short sales grew 25 percent from a year earlier, hitting a three-year high. In contrast, sales of bank-owned properties declined 15 percent versus the first three months of last year, the firm said.

The trend indicates a greater likelihood that home prices will continue to soften, as foreclosures and short sales typically sell at sharp discounts to other homes.

It also suggests a shift in the way lenders handle mortgages that have gone unpaid.

Lenders may be favoring short sales versus waiting for troubled loans to go through the foreclosure process to take back the homes securing the loan, said Daren Blomquist, a vice president at RealtyTrac.

"A short sale is a safer alternative to avoid any potential problems that they face because of the way they're processing foreclosures," Blomquist said.

Last year, mortgage lenders grappled with allegations that they had been processing foreclosures without verifying documents. The pace of foreclosures slowed sharply as the nation's biggest mortgage lenders worked to hammer out a settlement with state and federal officials.

They reached a $25 billion settlement in February, clearing the way for banks to take action on unpaid mortgages.

All told, 233,299 bank-owned homes or those in some stage of foreclosure sold in the first quarter, making up 26 percent of all U.S. home sales in the period, the firm said.

That's the highest percentage of overall sales since the figure hit 28 percent in the third quarter of 2010, before the foreclosure abuse claims against mortgage lenders surfaced.

Foreclosure sales made up 22 percent of all sales in the last three months of 2011 and one-fourth in the first quarter a year ago.

As of end of April, there were 637,668 bank-owned homes yet to be sold, representing a 17-month supply, Blomquist said. Another 722,467 were in some stage of the foreclosure process.

Sales of all previously occupied homes jumped in January to the highest pace in nearly two years, but declined slightly the next two months. Sales rose 3.4 percent in April from March to a seasonally adjusted annual rate of 4.62 million, according to the National Association of Realtors. That nearly matched January's pace of 4.63 million, but was below the nearly 6 million that most economists equate with healthy markets.

While rising, the share of foreclosure sales remains well below its first-quarter 2009 peak of 45 percent of all sales. They comprised less than 1 percent of all sales in 2005, at the height of the housing boom.

More foreclosure sales also means potentially more pain for homeowners, who could see the value of their homes erode further as neighboring foreclosures sell.

Combined, bank-owned homes and those still in the foreclosure process sold for an average of $161,214 in the first quarter. That's down 1 percent from the fourth quarter of last year and down 2 percent from the first quarter of 2011.

Compared to non-foreclosure homes, the average price of a foreclosure sale was 27 percent below the average sales price of a home not in foreclosure or owned by a bank during the quarter. That discount is unchanged from the fourth quarter last year, but is down from a discount of 29 percent in the first quarter of 2011.

by ALEX VEIGA - May. 31, 2012 06:35 AM AP Real Estate Writer



Sales of foreclosure homes rose in 1Q

Sales of foreclosure homes rose in 1Q

LOS ANGELES - -- Homes in some stage of the foreclosure process saw their share of overall U.S. home sales grow in the first quarter even as sales of bank-owned homes fell.

The increase was driven by a spike in short sales, or homes that sell for less than what the owner owed on their mortgage, foreclosure listing firm RealtyTrac Inc. said Thursday.

Short sales make up the vast majority of homes sold while still in the foreclosure process. Those that aren't sold or auctioned off typically end up being repossessed by banks, what most people commonly think of as foreclosures.

In the first quarter, short sales grew 25 percent from a year earlier, hitting a three-year high. In contrast, sales of bank-owned properties declined 15 percent versus the first three months of last year, the firm said.

The trend indicates a greater likelihood that home prices will continue to soften, as foreclosures and short sales typically sell at sharp discounts to other homes.

It also suggests a shift in the way lenders handle mortgages that have gone unpaid.

Lenders may be favoring short sales versus waiting for troubled loans to go through the foreclosure process to take back the homes securing the loan, said Daren Blomquist, a vice president at RealtyTrac.

"A short sale is a safer alternative to avoid any potential problems that they face because of the way they're processing foreclosures," Blomquist said.

Last year, mortgage lenders grappled with allegations that they had been processing foreclosures without verifying documents. The pace of foreclosures slowed sharply as the nation's biggest mortgage lenders worked to hammer out a settlement with state and federal officials.

They reached a $25 billion settlement in February, clearing the way for banks to take action on unpaid mortgages.

All told, 233,299 bank-owned homes or those in some stage of foreclosure sold in the first quarter, making up 26 percent of all U.S. home sales in the period, the firm said.

That's the highest percentage of overall sales since the figure hit 28 percent in the third quarter of 2010, before the foreclosure abuse claims against mortgage lenders surfaced.

Foreclosure sales made up 22 percent of all sales in the last three months of 2011 and one-fourth in the first quarter a year ago.

As of end of April, there were 637,668 bank-owned homes yet to be sold, representing a 17-month supply, Blomquist said. Another 722,467 were in some stage of the foreclosure process.

Sales of all previously occupied homes jumped in January to the highest pace in nearly two years, but declined slightly the next two months. Sales rose 3.4 percent in April from March to a seasonally adjusted annual rate of 4.62 million, according to the National Association of Realtors. That nearly matched January's pace of 4.63 million, but was below the nearly 6 million that most economists equate with healthy markets.

While rising, the share of foreclosure sales remains well below its first-quarter 2009 peak of 45 percent of all sales. They comprised less than 1 percent of all sales in 2005, at the height of the housing boom.

More foreclosure sales also means potentially more pain for homeowners, who could see the value of their homes erode further as neighboring foreclosures sell.

Combined, bank-owned homes and those still in the foreclosure process sold for an average of $161,214 in the first quarter. That's down 1 percent from the fourth quarter of last year and down 2 percent from the first quarter of 2011.

Compared to non-foreclosure homes, the average price of a foreclosure sale was 27 percent below the average sales price of a home not in foreclosure or owned by a bank during the quarter. That discount is unchanged from the fourth quarter last year, but is down from a discount of 29 percent in the first quarter of 2011.

by ALEX VEIGA - May. 31, 2012 06:35 AM AP Real Estate Writer



Sales of foreclosure homes rose in 1Q

Sales of foreclosure homes rose in 1Q

LOS ANGELES - -- Homes in some stage of the foreclosure process saw their share of overall U.S. home sales grow in the first quarter even as sales of bank-owned homes fell.

The increase was driven by a spike in short sales, or homes that sell for less than what the owner owed on their mortgage, foreclosure listing firm RealtyTrac Inc. said Thursday.

Short sales make up the vast majority of homes sold while still in the foreclosure process. Those that aren't sold or auctioned off typically end up being repossessed by banks, what most people commonly think of as foreclosures.

In the first quarter, short sales grew 25 percent from a year earlier, hitting a three-year high. In contrast, sales of bank-owned properties declined 15 percent versus the first three months of last year, the firm said.

The trend indicates a greater likelihood that home prices will continue to soften, as foreclosures and short sales typically sell at sharp discounts to other homes.

It also suggests a shift in the way lenders handle mortgages that have gone unpaid.

Lenders may be favoring short sales versus waiting for troubled loans to go through the foreclosure process to take back the homes securing the loan, said Daren Blomquist, a vice president at RealtyTrac.

"A short sale is a safer alternative to avoid any potential problems that they face because of the way they're processing foreclosures," Blomquist said.

Last year, mortgage lenders grappled with allegations that they had been processing foreclosures without verifying documents. The pace of foreclosures slowed sharply as the nation's biggest mortgage lenders worked to hammer out a settlement with state and federal officials.

They reached a $25 billion settlement in February, clearing the way for banks to take action on unpaid mortgages.

All told, 233,299 bank-owned homes or those in some stage of foreclosure sold in the first quarter, making up 26 percent of all U.S. home sales in the period, the firm said.

That's the highest percentage of overall sales since the figure hit 28 percent in the third quarter of 2010, before the foreclosure abuse claims against mortgage lenders surfaced.

Foreclosure sales made up 22 percent of all sales in the last three months of 2011 and one-fourth in the first quarter a year ago.

As of end of April, there were 637,668 bank-owned homes yet to be sold, representing a 17-month supply, Blomquist said. Another 722,467 were in some stage of the foreclosure process.

Sales of all previously occupied homes jumped in January to the highest pace in nearly two years, but declined slightly the next two months. Sales rose 3.4 percent in April from March to a seasonally adjusted annual rate of 4.62 million, according to the National Association of Realtors. That nearly matched January's pace of 4.63 million, but was below the nearly 6 million that most economists equate with healthy markets.

While rising, the share of foreclosure sales remains well below its first-quarter 2009 peak of 45 percent of all sales. They comprised less than 1 percent of all sales in 2005, at the height of the housing boom.

More foreclosure sales also means potentially more pain for homeowners, who could see the value of their homes erode further as neighboring foreclosures sell.

Combined, bank-owned homes and those still in the foreclosure process sold for an average of $161,214 in the first quarter. That's down 1 percent from the fourth quarter of last year and down 2 percent from the first quarter of 2011.

Compared to non-foreclosure homes, the average price of a foreclosure sale was 27 percent below the average sales price of a home not in foreclosure or owned by a bank during the quarter. That discount is unchanged from the fourth quarter last year, but is down from a discount of 29 percent in the first quarter of 2011.

by ALEX VEIGA - May. 31, 2012 06:35 AM AP Real Estate Writer



Sales of foreclosure homes rose in 1Q

Sales of foreclosure homes rose in 1Q

LOS ANGELES - -- Homes in some stage of the foreclosure process saw their share of overall U.S. home sales grow in the first quarter even as sales of bank-owned homes fell.

The increase was driven by a spike in short sales, or homes that sell for less than what the owner owed on their mortgage, foreclosure listing firm RealtyTrac Inc. said Thursday.

Short sales make up the vast majority of homes sold while still in the foreclosure process. Those that aren't sold or auctioned off typically end up being repossessed by banks, what most people commonly think of as foreclosures.

In the first quarter, short sales grew 25 percent from a year earlier, hitting a three-year high. In contrast, sales of bank-owned properties declined 15 percent versus the first three months of last year, the firm said.

The trend indicates a greater likelihood that home prices will continue to soften, as foreclosures and short sales typically sell at sharp discounts to other homes.

It also suggests a shift in the way lenders handle mortgages that have gone unpaid.

Lenders may be favoring short sales versus waiting for troubled loans to go through the foreclosure process to take back the homes securing the loan, said Daren Blomquist, a vice president at RealtyTrac.

"A short sale is a safer alternative to avoid any potential problems that they face because of the way they're processing foreclosures," Blomquist said.

Last year, mortgage lenders grappled with allegations that they had been processing foreclosures without verifying documents. The pace of foreclosures slowed sharply as the nation's biggest mortgage lenders worked to hammer out a settlement with state and federal officials.

They reached a $25 billion settlement in February, clearing the way for banks to take action on unpaid mortgages.

All told, 233,299 bank-owned homes or those in some stage of foreclosure sold in the first quarter, making up 26 percent of all U.S. home sales in the period, the firm said.

That's the highest percentage of overall sales since the figure hit 28 percent in the third quarter of 2010, before the foreclosure abuse claims against mortgage lenders surfaced.

Foreclosure sales made up 22 percent of all sales in the last three months of 2011 and one-fourth in the first quarter a year ago.

As of end of April, there were 637,668 bank-owned homes yet to be sold, representing a 17-month supply, Blomquist said. Another 722,467 were in some stage of the foreclosure process.

Sales of all previously occupied homes jumped in January to the highest pace in nearly two years, but declined slightly the next two months. Sales rose 3.4 percent in April from March to a seasonally adjusted annual rate of 4.62 million, according to the National Association of Realtors. That nearly matched January's pace of 4.63 million, but was below the nearly 6 million that most economists equate with healthy markets.

While rising, the share of foreclosure sales remains well below its first-quarter 2009 peak of 45 percent of all sales. They comprised less than 1 percent of all sales in 2005, at the height of the housing boom.

More foreclosure sales also means potentially more pain for homeowners, who could see the value of their homes erode further as neighboring foreclosures sell.

Combined, bank-owned homes and those still in the foreclosure process sold for an average of $161,214 in the first quarter. That's down 1 percent from the fourth quarter of last year and down 2 percent from the first quarter of 2011.

Compared to non-foreclosure homes, the average price of a foreclosure sale was 27 percent below the average sales price of a home not in foreclosure or owned by a bank during the quarter. That discount is unchanged from the fourth quarter last year, but is down from a discount of 29 percent in the first quarter of 2011.

by ALEX VEIGA - May. 31, 2012 06:35 AM AP Real Estate Writer



Sales of foreclosure homes rose in 1Q