If you're trying to buy a foreclosure in the city and feel like your choices aren't what they were a year ago, it's not your imagination. While there were more short sales on the market last year than in 2010, bank-owned homes for sale (the purple line in the graph below) took a steep drop:

The data comes from Metropolitan Regional Information Systems' stats arm, RealEstate Business Intelligence. Though it probably won't come as a complete shock to anyone following the news about robo-signing, it's a striking chart nonetheless.

Here's the change in actual sales of distress properties:

Continue reading "Having trouble finding a Baltimore foreclosure to buy? Here's why" »

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Categories: Distress sales, The foreclosure mess
        

Thousands of homes are on the market in the Baltimore region. But as the commercials say, wait -- there’s more.

Tens of thousands of Baltimore-area homeowners are behind on their mortgage payments. At least some of their homes will end up on the market too, either as short sales or repossessed foreclosures.

California-based John Burns Real Estate Consulting, which does market research for homebuilders and banks, estimates this "shadow inventory" in the Baltimore region at 50,000 homes as of June. That’s how many properties the company believes will eventually become distress sales but aren’t yet listed.

"That equates to 14 months of supply based on the average resale sales volume for the area over the last 10 years," Wayne Yamano, a vice president at John Burns, said in an email. "The U.S. average is about 9 months of shadow inventory in comparison."

The sales volume was much larger for most of the past 10 years than it’s been in the last few. At the pace of June sales, it would take 21 months -- almost two years -- to find buyers for 50,000 homes.

Continue reading "Firm: Baltimore-area 'shadow inventory' at 50,000 homes" »

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Categories: Distress sales, Housing stats, The foreclosure mess
        

About 1,000 Baltimore homes on the market are either foreclosures or short sales -- 21 percent of the total. But such distress properties accounted for a whopping 44 percent of actual sales from January through July, according to a Greater Baltimore Board of Realtors analysis of multiple listing service data.

All told, buyers have picked up almost 1,500 foreclosures or short sales in the city -- mostly foreclosures.

Do distress properties make up a much larger share of sales than listings because buyers are zeroing in on them as the good deals? Some of it seems to be fewer foreclosures on the market. They accounted for just under 300 properties for sale as of Wednesday, but there were more than twice as many -- about 640 -- on the market in mid-November.

The lingering effect of robo-signing, perhaps. The number of seriously delinquent loans certainly hasn't dropped in half.

But even if there were as many foreclosures on the market now as there were in November, they'd push the distress category to 28 percent of all listings. So yeah, it does seem like buyers -- investors in at least some cases -- are gravitating toward these homes.

Foreclosures, that is. Short sales represented 6 percent of the city's sales so far this year but 15 percent of listings on Wednesday. Frequently a long and frustrating process, trying to close on a short sale.

Here's the breakdown for the rest of the region, calculated by the GBBR from Metropolitan Regional Information Systems data:

Continue reading "Distress homes: 21% of city listings, 44% of actual sales" »

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Categories: Distress sales
        

The so-called shadow inventory -- homes that aren't on the market now but soon could be thanks to the foreclosure crisis -- receded in April, according to real estate data firm CoreLogic.

The company estimates the total at 1.7 million homes nationwide, down from 1.9 million in April 2010. (Both numbers add up to a five-month supply of homes because the pace of sales was faster last spring, with the federal tax credit in effect, than it is now.) CoreLogic attributes the drop to a combination of fewer homeowners newly behind on payments and a "high level" of distress sales.

A few interesting tidbits:

o Homes whose owners are seriously delinquent on their payments but not in foreclosure account for almost half the shadow inventory. The rest -- in equal split -- are homes in the foreclosure process and properties repossessed by banks but not yet on the market.

o The shadow inventory plus all homes for sale -- the "visible" inventory -- added up to 5.7 million units in April. To put it another way: Three in every ten of those properties are in the shadow group.

o CoreLogic says shadow inventory has dropped 18 percent since peaking in January 2010. But its chief economist, Mark Fleming, expects several more years before total absorption "given the long timelines in processing and completing foreclosures."

Here's the question of the day, folks: Does the much-discussed shadow inventory make any difference to you? If you're thinking of buying, is this potential pipeline holding you back for now? Sellers, has it factored into your strategy at all?

Posted by Jamie Smith Hopkins at 6:00 AM | Permalink | Comments (4)
Categories: Distress sales, Question of the day, The foreclosure mess
        

Buying a home is complicated. When it's a foreclosure, though, the questions really multiply -- whether you're trying to purchase an REO (real-estate owned) property from a bank or you're thinking of bidding at a foreclosure auction.

Two settlement attorneys teamed up to answer common questions, including ones several of you submitted. Lee M. Snyder and Eric Oberer are colleagues at Mid-Atlantic Settlement Services. Lee has been practicing real estate law since 1969 and Eric -- a former city prosecutor -- joined Mid-Atlantic in 2005.

Take it away, Lee and Eric:

-----------------------------------

Question: Is there any way for a buyer to tell before getting under contract on an REO whether the institution already has the legal ability to go to settlement?

Answer: The land records of the county/city where the property is located are the best source of information as to who is in title. It is also possible to go onto the website for the state Department of Assessments and Taxation to determine who is in title according to their records. However, both of these sources can be as much as 60-90 days behind in indexing and therefore may not show that title has recently changed. Many times, the selling REO bank has seen the foreclosure procedure completed, sale ratified, etc., and the deed from the trustees to it has not yet been recorded or indexed but the bank lists the property for sale anyway.

Q: What issues do you see crop up on a regular basis with REO transactions – delays, etc. – that buyers should be aware of?

Continue reading "Q&A: Purchasing foreclosures" »

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Categories: Auctions, Distress sales, Guest post, The foreclosure mess
        

For borrowers going through the frustration of trying to market their home as a short sale, the big selling point generally is the thought that it's not as bad -- from a credit-score perspective -- as a foreclosure.

But that doesn't appear to be true, the folks at FICO say.

The credit-score company says on its analytics blog that it compared the effect of both types of distress sales on the scores of three different types of consumers. A foreclosure and a short sale represented an equal hit to the FICO score of all three, FICO said. (Thanks to HousingWire for noticing.)

One commenter on that blog takes issue with the suggestion that it's all the same, arguing that someone who needs a security clearance would be out of luck with a foreclosure in their past and thus has a reason to push for a short sale. But it's not clear that defense officials see a difference, either.

Sheldon I. Cohen, an attorney who focuses on security-clearance issues, writes that the Department of Defense's Office of Hearings and Appeals has granted clearances to some with a short sale in their background and some with a foreclosure in their past, and it's also denied clearances to people who had a foreclosure or a short sale. The key is "good faith and moral behavior," he writes:

Continue reading "FICO: Short sale no better for your credit score than foreclosure" »

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Categories: Credit score, Distress sales, The foreclosure mess
        

Foreclosures and short sales -- but particularly foreclosures -- were a sizable chunk of the Baltimore region's housing market last year. Nevada we're not, but distress sales increased across our metro area.

Here's the breakdown for 2010, with numbers pulled by Joseph T. "Jody" Landers III of the Greater Baltimore Board of Realtors from Metropolitan Regional Information Systems' multiple-listing service:

The number of Maryland mortgages in default moved downward last year after several years of rapid escalation, as colleague Lorraine Mirabella reports.

How have you been affected by foreclosures and short sales -- if at all?

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Categories: Distress sales, Housing stats, The foreclosure mess
        

In today's topsy-turvy housing market, the number of homes that soon could be for sale is just as important to know as the number that actually are.

Here's why: The so-called "shadow inventory" of seriously delinquent borrowers whose properties are in danger of landing on the housing market in Maryland are so numerous that these homes would take a full two years to find buyers at August's pace of sales, according to a new report from real estate data firm CoreLogic.

That's the worst in the nation -- in part because Maryland has been hard-hit by the foreclosure crisis, but also because the pace of sales dropped faster here than in the country as a whole after the federal homebuyer tax credit expired.

CoreLogic, which calculated the shadow-inventory figure by analyzing the number of homes whose owners were at least three months behind on their mortgages, said the top states after Maryland (at 24.4 months) were New Jersey (24.1 months), Illinois (23 months), Florida (20.8 months) and Georgia (19.5 months).

As a region, the Baltimore metro area was somewhat better off than the state as a whole. Its 18.3 months of supply ranked it 17th among the 50 largest metro areas. (Miami was tops, at just over 33 months.)

"The weak demand for housing is significantly increasing the risk of further price declines in the housing market," Mark Fleming, CoreLogic's chief economist, said in a statement. "This is being exacerbated by a significant and growing shadow inventory that is likely to persist for some time due to the highly extended time-to-liquidation that servicers are currently experiencing."

Continue reading "Report: Two years of "shadow inventory" looming over Md.'s housing market" »

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Categories: Distress sales, The foreclosure mess
        

Ten percent of the homes for sale in Baltimore in the middle of the month were bank-owned foreclosures. That's exactly the same as it was a month earlier.

In fact, the share of listings that were "distress" -- foreclosures or short sales -- stayed steady across the region, from a low of 12 percent in Carroll County to a high of 22 percent in the city.

The percentage of these properties that are actually selling isn't changing much either, according to Metropolitan Regional Information Systems data analyzed by the Greater Baltimore Board of Realtors. 

"Unfortunately, or fortunately (depending on whether you view the glass as half full or half empty) the percentage of foreclosures and short sales has remained relatively constant over the past 4 months," Joseph T. "Jody" Landers III, executive vice president of the group, wrote me. "These data highlight the fact that the short sale process tends to drag on and on, while foreclosure sales are having an exaggerated affect on the market, and contributing to further price instability."

Though it's not a new trend, what's really striking is how popular foreclosures are. Particularly in the city. They're 10 percent of listings in Baltimore but 30 percent of all sales in the first seven months of the year. Four foreclosures are on the market per foreclosure sold -- a seller's market! -- compared with 14 for non-distress sales.

Short sales, now -- yikes:

Continue reading "Distress sales remaining steady" »

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Categories: Distress sales, The foreclosure mess
        

Real estate information firm First American CoreLogic has good news and bad news for Baltimore-area residents trying to sell a home that's not a short sale or foreclosure.

The good news for sellers: Average sale prices are rising -- up 8 percent in January vs. two years earlier and up 13 percent vs. January 2009.

The bad news: You're not riding the wave of increased home sales.

Seventeen percent fewer traditional resales sold in January than a year earlier in the Baltimore metro area, says First American CoreLogic. Compared with two years ago, the drop in sales is about 50 percent.

But short sales, where owners need lender approval because they're underwater on their mortgage, are on the rise. These deals increased 18 percent year-over-year and have more than doubled in two years.

Bank-owned properties -- foreclosures -- bumped up a modest 1 percent year-over-year, but there were 75 percent more of these sales in January than two years earlier.

All told, distress sales made up a quarter of January home sales in the Baltimore metro area, First American CoreLogic says.

(Like traditional resales, sales of new homes were also down -- but not as much in recent months. The year-over-year drop was 6 percent.)

What about the average sale price for distress deals, you ask?

Continue reading "'Normal' home sales vs. distress sales in Baltimore" »

Posted by Jamie Smith Hopkins at 12:13 PM | Permalink | Comments (9)
Categories: Distress sales, The foreclosure mess