How-to Monday: Researching loans and foreclosures
Associated Press photo
Foreclosure can affect you and your neighborhood, never mind if you personally have never been late paying your mortgage. When lenders repossess homes, economists say, values go down nearby.
The good news is that the riskiest mortgages — subprime — made up 10 percent of all loans in the Baltimore metro area as of May, down from 13 percent a year earlier. That’s according to an estimate by First American CoreLogic.
The bad news? About 8 percent of metro-area homes with subprime loans were either in the foreclosure process or had been foreclosed on, almost four times what it was a year earlier.
A homeowner or buyer could be excused for wanting to know how good or bad, exactly, the mortgage picture looks close by. With a bit of time, you can find some answers.
Put in your address or ZIP code at First American CoreLogic’s RealQuest site and it will tell you how many homes in your area are facing foreclosure, have an auction date scheduled or are owned by lenders. You’ll get street names, too, so you can see if you’re surrounded. Similar information is at RealtyTrac and ForeclosureS.com.
If you’d just like a sense of how Maryland compares with the rest of the country, try the Federal Reserve Bank of New York’s maps. You can see the state-by-state share of subprime or “Alt-A” loans — the latter are in the gray area between subprime and prime. You can also get stats about those loans, such as the percentage in foreclosure. (If you're looking for a site that combines loan information with demographic stats, try The Reinvestment Fund's PolicyMap.)
Though Maryland has seen a significant increase in problem mortgages, the Federal Reserve maps offer some could-be-worse perspective. California and Florida in particular have been pummeled by loans going sour.
The bigger price drops in those states hasn’t helped. Neither have the loans. In California, according to First American CoreLogic, 17 percent of mortgages taken out in 2006 were “option ARMs” — adjustable-rate loans with an option to make a monthly payment so low that the amount owed would grow rather than shrink. Option ARMs accounted for not quite 5 percent of new mortgages in Maryland that year. (In the first six months of this year, they were down to two-tenths of a percent of new loans here.)
The Baltimore area is doing better than the nation overall, according to First American CoreLogic’s figures. Remember the 8 percent of subprime loans about to be or already foreclosed on in the metro area? It’s 13 percent nationwide.
Here’s hoping that things are better than average near you, too. Misery loves company, but it’s human nature to prefer the worst misery be elsewhere.
“You can look at other areas and say, ‘I’m glad I’m not there,’” says Bob Visini, a vice president with First American CoreLogic.
Comments
Is there some unpredatory not4profit website giving data on foreclosed and auctioned properties in Baltimore?
Posted by: Nick | October 6, 2008 9:06 AM
Giving ADDRESSES or giving general data? I haven't seen a nonprofit or government site tracking addresses. (If anyone else has, please chime in.)
RealQuest and these other sites offer some information for free -- the details I mention above -- but are hoping that people will pay for more. If you just want to know how many foreclosures are near you, the free information should fit the bill. (Assuming it's accurate for your neighborhood, obviously.)
Posted by: Jamie Smith Hopkins | October 6, 2008 9:11 AM
"The good news is that the riskiest mortgages — subprime — made up 10 percent of all loans in the Baltimore metro area as of May, down from 13 percent a year earlier."
While this may be true, it doesn't tell us much about affordability or where prices are headed. For that, it would be helpful to know what percentage of loans originated during the last five years were subprime and Alt-A, when prices were rising at unsustainable rates. I'm sure it was considerably higher than 10% or even 13%
Posted by: John | October 6, 2008 3:38 PM
The number originated during the later boom years was definitely higher than 13 percent -- it wouldn't be as high as it is now, otherwise.
You can find answers to at least some of your questions in a Reinvestment Fund study here: www.trfund.com/resource/downloads/policypubs/MarylandForeclosure.pdf
Posted by: Jamie Smith Hopkins | October 6, 2008 3:48 PM
There is also another obvious place to find foreclosures, the MLS. Most foreclosures are listed with an inexpensive real estate brokerage willing to pay a buyer's agent a fee. This can be helpful since buying a foreclosure is a little different from a traditional sale. Traditional sales involve more emotions, foreclosures usually involve apathy.
An experienced agent can locate foreclosures and help negotiate the deal, while safe gaurding a buyers interest.
Posted by: Dunn | October 9, 2008 3:18 PM
Naturally, but I didn't mention the MLS for a good reason -- this is not a "finding foreclosures to buy" post, but rather one focused on neighbors who want a sense of what's going on around them. I figured that most agents would prefer that people not call them with questions about how many foreclosures are in their neighborhood if those people have no intention of buying or selling.
Posted by: Jamie Smith Hopkins | October 9, 2008 3:31 PM
I got that point. But there are a lot of people who would like to pick up foreclosures to live in. If buyers can pick up a good deal why not demonstrate how?
Perhaps the headline your editor choose was mis-leading. There is always an excuse.
Posted by: Dunn | October 9, 2008 4:00 PM
Editors write headlines for the paper, but on this blog it's just me. I did think "researching" as opposed to "finding" or "buying" helped differentiate this post from the "find foreclosures to buy" articles.
In any case, I did earlier posts for folks in the market for short sales (http://weblogs.baltimoresun.com/business/realestate/blog/2008/02/howto_monday_short_sales.html) and for people interested in buying foreclosures (http://weblogs.baltimoresun.com/business/realestate/blog/2008/06/howto_monday_finding_foreclosures.html).
Posted by: Jamie Smith Hopkins | October 9, 2008 4:09 PM
From what I can tell, the people who comment on your blog would like to know how do they capitalize on this market?
You are very prvilaged way beyond most. Don't forget that.
Posted by: Dunn | October 9, 2008 4:28 PM
I don't feel particularly privileged at the moment, but maybe that's because I work in an industry laying off people as fast as it can. (I'm certainly glad I get to learn new things every day and share information with folks.)
As for readers, a tiny fraction of the people who look at this blog leave comments. I try my best to vary the How-to topics so there's something for everyone, which means not only buyers and sellers but homeowners staying put and renters with no near-term plans to buy.
Posted by: Jamie Smith Hopkins | October 9, 2008 4:36 PM
As you say, you know it all.
Posted by: Dunn | October 9, 2008 4:53 PM
Hi,
If someone is looking for pending foreclosure properties to purchase at foreclosure auction; the most convenient place to find them is at www.mdauctions.com. It is a pay site but it covers the whole state of Maryland.
Posted by: Don | October 19, 2008 8:42 AM
Great resources for the interested investor. There are a lot of unscrupulous people trying to make money of the foreclosure situation. Charging money for a service any real estate agent can provide for free if someone is interested but for the casual observer this is a free service they can utilize and determine if they would be ready to invest or just sit on the sideline a little longer.
Posted by: Suzy Woodhead | October 20, 2008 10:08 PM