21st July 2009

Foreclosures Slow Down, Short-Sales and Deed-in-Lieu Numbers Jump!


By Robert Whitfield

Update: Foreclosures, Short Sales and Deed in Lieu Actions

As foreclosure moratoriums provided temporary relief to troubled borrowers earlier this year, two other kinds of home forfeiture–short sales and deed-in-lieu-of-foreclosure actions — rose sharply.

In a mortgage study released in early July, federal financial regulators reported a 176% jump in short sales and deed-in-lieu proceedings from the first quarter of 2008 to the first quarter this year.

Short sales and deed-in-lieu actions require borrowers to forfeit their homes to eradicate their mortgage debts, usually for less than the full amount owed. Both these actions require the lenders approval.

Selling a home or handing it back to the bank in this manner does less damage to a borrower’s credit rating than a foreclosure, and is less of a hassle for the lender.

Year-over-year first-quarter short sales jumped from 5,523 to 17,036, according to the report from the Comptroller of the Currency and Office of Thrift Supervision, the U.S. Treasury Department agencies that oversee banks and S&Ls.
Quarterly deed-in-lieu actions (voluntarily giving your home back to the lender to avoid foreclosure action) edged up from 1,065 to 1,158.

Completed foreclosures still far outnumbered the alternate forfeitures. They totaled 78,936, up from 76,548 in the year-earlier quarter but far below the high of 126,266 in the third quarter of 2008.

But things are NOT getting better. In fact, they will probably get worse.

Foreclosure statistics are expected to spike again soon as federal, state, local and lender-imposed moratoriums expire.
The regulators said their report covered 64% of current home loans in the United States. Astonishingly, they noted that most of the short sales involved borrowers with prime loans, not subprime or alt-A mortgages!

Whether you’re an investor, second home buyer, or a first time home buyer, you don’t need a Doctorate in Economics to see this market is a golden opportunity! Now is the time to buy real estate – and because of the new first time buyer $8500 tax credit (which does not have to be paid back) on home purchases through the end of 2009, now may be the best opportunity first time buyers will ever see to get into a home.

We are not just talking about deals – there are literally Steals out there in all price ranges and property categories – if you know where and how to look. This opportunity includes starter homes, residential and commercial investment properties, luxury homes, second and retirement homes in costal and mountain resort areas and everything in between.

Those who can take advantage of the market now will reap great rewards for years to come as they simply ride the tide of rising values over time – and the market will come back and values will rise as it always has after every economic downturn in history.

I can help you buy your next Atlanta Home, Atlanta Luxury Home, Atlanta Investment Property, and now even Costal and Mountain Resort Properties (more in a future blog) – give me a call to learn more!

Robert Whitfield

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21st September 2008

Thinking About A Second Home?

The Current Market Is Allowing More Atlantan’s To Treat Themselves To The Solitude And Splendor Of A Second Home Or Vacation Home – With More Options And Better Deals Than Anytime In Recent Memory

Today there are over 7 million vacation homes in the United States. With interest rates extremely low and hundreds of very desirable vacation home opportunities within a 2-5 hour drive from Atlanta, your dream of owning a vacation home may be easier than you think.

Whether you dream of a mountain lodge or a beach house on the Gulf of Mexico or off the coast of South Carolina, there are many options to choose from, and Robert Whitfield can help you.

According to  Walter Molony a spokesman for the National Association of Realtors (NAR), sales of second homes hit a new record in 2006, with over one million buyer purchasing vacation homes. In 2007, second homes and vacation homes accounted for more than 12 percent of all home sales. A NAR study found that the typical vacation home buyer in todays market is 46 years old, with a median annual income of $99,000.

“There are some great deals to be made in real estate right now,” said Molony, citing the large number of homes on the market, low interest rates and a 2.5 percent decline in home prices in 2007. “Buyers, especially financially fit baby boomers, are looking to diversify their portfolios. Historically speaking, real estate typically appreciates in value considerably over the years making it an excellent long term investment,” he said.

NAR reports that about 60 percent of vacation homes buyers choose locations within easy driving distance of where they live, with the average distance being about 220 miles, just a 4 to 5 hour drive. Because of Atlanta’s close proximity to the North GA and Blue Ridge mountains and even sections of the Gulf of Mexico, there are wonderful options that are anywhere from one to three hours away.

There has been a surge of interest in vacation home communities anchored among scenic natural settings, near a gorgeous mountain range, or the sandy beaches of a clear lake or sea coast.

Things To Consider Before Buying

Location, Location!

Select homes that are near outdoor recreation attractions and nature, especially those with or near breathtaking views – and homes where the return has been historically high. Properties along the Gulf Coast are popular with Atlantan’s and continue to have a great resale and return on investment potential.

Talk To Your Lender!

Lenders may require a larger down payment and charge a higher rate for second homes. To keep your costs down, you may want to consider financing a portion of your vation home with a home equity loan on your primary home. Home equity loans have lower rates than conventional mortgages. Robert can not only help you find a great vacation home, but refer a great home equity lender with some of the lowest rates around as well.

Check With Your Insurance Agent

Premiums for homeowners insurance for vacation homes are usually higher than your primary home, especially if you are far from a fire hydrant or fire station, or, you plan to rent the home out while you aren’t using it.

Consult With Your Tax Adviser

Have your tax adviser explain all the tax issues that pertain to a second home especially if you plan to rent it out, and if you don’t treat it as an investment property.

For more information, contact Robert Whitfield, Broker/Owner Advantage Realtors

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