DEL MAR, July 30 2012 – Gooooooood Monday morning San Diego!!!! As this gorgeous July comes to an end, we San Diegans are reminded of just why we make America’s Finest City our home. While I’d love nothing more than to be hitting the surf this Monday morning, I’ve got some interesting news to share with you all, that may present a golden opportunity for prospective home buyers, while at the same time forecasts storm clouds over the tail-end of summer for some home owners.
As those regular followers of my
blog know (thanks, love you guys!), an ostensible citizenry of strategic
mortgage defaulters have manipulated (or if you are one of them, perhaps
“influenced” is a cozier word for you) the mortgage market place, to the point
that even state and Federal legislators have taken note. A LARGE segment of mortgage
defaulters, whether by choice or by necessity, continue to live month after
month, sometimes year after year, without making their mortgage payment, yet continue to escape foreclosure while
seeking a loan modification or short sale, and thus effectively squat in their
homes free of charge.
Despite recent legislation that
in theory makes short sales less difficult to get done, legislation that ought
(on paper) discourage banks from foreclosing, recent data indicates that the
banks are stepping up efforts to mitigate their losses, and in fact
foreclosure-filing at a higher rate. The number of U.S. homes receiving
foreclosure notices broke one million through the first six months of 2012, as
per RealtyTrac. In their “Midyear
2012 Foreclosure Market Report,” the Industry leading data-tracking firm states
that there were approximately 1.046 million foreclosure filings between January
- June 2012 nationally, a 2 percent increase from the preceding six months. This is a
significant bump up.
To be clear, a "foreclosure
filing" includes all of the following foreclosure-related actions : (1) a
default notice, or "lis pendens" to the defaulting home owner, (2) Scheduled auctions, and (3)
Bank repossessions, at which point the home no longer belongs to the defaulter,
but now belongs to the bank.
Even as the number of
repossessed homes decreased nationally, the number of homeowners receiving
a Notice of Default, or lis pendens, has
increased. It's no real coincidence that foreclosure starts are going up now. As
previously mentioned the legislation that intends to make short sale
transactions smoother and quicker was countered by a $25 billion mortgage
servicing settlement that provides banks fearing legal liability the necessary
framework and rules by which they can foreclose upon a home. Earlier this year some
banks chose to slow or even stop proceedings altogether on foreclosure starts.
Since the settlement's announcement, however, foreclosure activity has indeed resumed.
So where is the opportunity for
prospective buyers? Well, homes purchased while in the various stages of
foreclosure can often be purchased for a lower price than homes that are not in foreclosure(i.e. traditional
sales). More mortgage defaulting and more lis pendens, in accordance with the
legislation intended to speed up the short sale process suggests good news for
those who have longed for a particular property on the market, but may have
been scared off by the lengthy and uncertain short sale process.
On the flip side, if you are a
mortgage defaulter sitting in your home mortgage –payment free going on month 6
or 12 or 18; for the aforementioned reasons that free ride may be coming to a halt, for better of for worse.
That’s today’s Monday Morning Market Watch. I’m Jason
Bernabei. Feel free to hit me up if you are looking to refi, or need a purchase
loan, or are looking to buy or sell property, or if you just want to shoot the
breeze on Housing. Until then, you can check me out each and every Monday on www.therealtyinsiders.com
for more, and be sure to tune in to see myself, and other local industry
professionals talking all things real estate and Housing on The Realty
Insiders, the ONLY real estate show in town!
Jason Bernabei, TriCastle Realty
