The FHA foreclosures are likely to be picking up steam.
The authorities must know it too, because now they are doling out the REO listings to the usual suspects, instead of a centralized approach. Back in the day, you had to have a special FHA-REO lockbox key!
These borrowers refinanced their FHA purchase loan two times since buying in 2008 – the latest in May, 2010 – and paid loads of mortgage insurance along the way. Yet by early 2011 they must have given up, and received their first NOD in July of that year – 14 months after the loan’s origination.
Even though they had to qualify for their loan each time, their initial 3.5% investment ($21,525) wasn’t enough to keep them engaged. Add these post-peak newer borrowers to the masses who have procurred the FHA reverse mortgages, and there has to be trouble coming. Luckily, there haven’t been that many FHA loans in the higher-priced areas?
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How long will foreclosures persist?
Flat or bumpy pricing isn’t enough – because homeowners on a tight budget can have a single life-changing event that forces them to sell. They need a rising market to be able to break even with costs, and with little or no penalties or stigma attached, we’ll probably see a steady trickle/stream of foreclosures from now on.
I saw one today where the seller, who purchased using FHA on 9/30/09, was already short-selling!
We offered to help here, where the previous owner had lasted less than a year:
In the comments of the last post, we were discussing the thought of making an offer on a house that you haven’t seen. It is definitely more personal when you are looking at a primary residence – so let’s start with an investment property!
The intent of this video is to give you enough ingredients to be able to calculate the cost of repairs, and hopefully determine if this property pencils out for you, prior to visiting in person. Buyers are checking comps in advance, and just need to estimate repair costs on any property, right?
As the listing agent, do I worry about verifying that buyers have seen the property?
On vacant properties – No.
Because on vacant houses, listing agents don’t know if ANY of the offerors have seen it – unless I stake out the property, slumped down in my car across the street, Rockford-style. Yes, I would prefer if buyers have seen it, but when asked, every buyer’s agent says, “of course”.
I’m going to assume that NONE of them have seen it, and instead I’ll provide ample evidence to give everyone the most thorough experience of what you are buying, before you go.
Try it out for yourself – those who follow the blog have already seen this house a few times, here is the final cut – plus for those who need to see it, we’ll make that easy too, by conducting open house late in the afternoon during the first day on the market (in effect, our actual stake-out!):
A few months back after this house was foreclosed for the second time, I went by and found a door open, and peeked inside for a quick look. There has been workers there ever since, so hopefully we’ll see it back on the market at some point – and maybe get an after-look?
We knew there would be double REOs – houses that get foreclosed back-to-back.
2612 La Gran Via, Carlsbad
4 br/3 ba, 3,834sf
$1,100,000 12/05 refi mortgages
$961,006 11/06 Trustee sale O-bid, REO
$876,000 5/07 SP
$733,146 8/09 Trustee sale O-bid, REO
$778,000 8/09 LP
It’s been featured here before, a typical Old La Costa custom with funky floor plan and a smaller back yard. This former owner was a restauranteur, so we can probably chalk this foreclosure up to the economic downturn?
Interesting to note that the IndyMac current list price is higher than the opening bid at the trustee sale. We’re going to watch this trend, and remember those lenders who list lower – no reason to buy at the trustee sale if you can get it lower, later.
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