Brian Vanderhoff's North Fulton Real Estate Blog

With spring just around the corner, millions of families will be surfing the real estate sites, looking for their dream home. They’ll educate themselves about local price trends, and they’ll review their financial situation to try to answer one question: “Is this the year to be buying a home?” However, they may be asking the wrong question. According to industry leaders, it’s more important to ask, “Is 2012 is a good year to take out a mortgage?”

With rates on a 30-year fixed mortgage lower than anyone can remember, and the Federal Reserve promising to keep short-term interest rates at zero for the next three years, what’s to worry about?

Plenty, says Margaret Kelly, the CEO of RE/MAX, the international real estate franchisor. “This year, a crisis like the European debt situation could trigger inflation and send mortgage rates up, or prices could rise. This is the year many people will look back and wish they had bought a home because these conditions aren’t going to last forever,” she told me.

What will influence mortgage rates next?

John Walsh, CEO of Total Mortgage Services in Milford, Conn., one of the fastest-growing mortgage originators in the nation, sees the potential for a lot of rate volatility in the future. “If the debt situation in Europe is resolved, we could see rates rise significantly, although it seems unlikely this problem will be solved in the short term,” he said. But Europe is not the only factor that could influence rates.

Walsh added, “Although rates could drop if the Fed engages in further quantitative easing, there is a limit to how far rates could fall. Improvement in the U.S. economy or a million other factors could very easily cause rates to rise. There is a limited upside in waiting to take out a mortgage, but a huge downside in waiting. I would advise acting now as opposed to waiting.”

However, taking out a mortgage isn’t nearly as easy as it used to be. In fact, the primary reason most buyers, especially first-time buyers, are losing contracts and not buying a home is that they aren’t qualifying for a mortgage. Move-up buyers who haven’t dealt with the mortgage process since the salad days before 2007 are also in for a rude awakening.

What is killing the deals?

Contract failures were reported by 33 percent of Realtors in December. The leading reasons were declined mortgage applications and failures in loan underwriting from appraisals coming in below the negotiated price, according to the National Association of Realtors.

A major issue when it comes to contract failures is the length of time it takes to approve a mortgage, which grew late last year from an average of 30 days to between 45 and 60 days, according to a survey last October by Campbell/Inside Mortgage Finance. Late or delayed approvals can delay a closing or even cancel a contract.

Walsh advises borrowers to organize their documentation in advance and be responsive to lenders’ inquiries. “A lender can only go as quickly as the information he has to work with. Be ready with tax returns, current pay stubs, and bank statements,” he noted. Walsh added that his firm turns underwriting around in a day and processes applications in two weeks when borrowers are responsive.

Low appraisals also kill deals today. The appraisal industry has undergone great changes over the past five years that make it imperative that borrowers stay on top of the process if they want to avoid last-minute renegotiations with the seller that could torpedo the deal. Should an appraisal come in too low, Walsh suggests asking the lender to include recently sold comparable properties that were not listed on the MLS to provide a wider, more accurate sample.

Walsh warns borrowers not to take any action that would impact their credit score or credit history until closing is complete. New credit standards could require lenders to check credit immediately before closing. A major purchase, such as a car or furniture, or even an application for new credit, can cause a lender to recalculate the income-to-debt ratio and revise the loan’s terms or even withdraw the loan approval completely. Walsh’s advice? “If you want to buy something like new furniture before you move in, buy it on time, not credit.”

“Another reason this is a great year to get a mortgage is that there is a good selection of sound loan products available ranging from FHA to adjustable rate mortgages with very low first phased rates that are a good choice for borrowers not planning to own the property for many years,” said Walsh. “Another benefit to adjustable rate mortgages is that the lower initial payments give homeowners time to grow in their jobs and possibly begin to see an increase in their take-home pay.”

The FHA witnessed a number of changes last year, including changes in the mortgage insurance premium (MIP) and an increase in credit score requirements, but Walsh doesn’t foresee major changes in the next 12 months.

Bottom line: If you have your credit and your financial house is in order, your documentation is ready, and you have a good understanding of your borrowing options, then you’re ready to borrow. If you’re ready to borrow, then you’re ready to buy.

Labels: Forclosures, Foreclosed, foreclosed homes, foreclosed homes for sale, foreclosed land, foreclosed properties, foreclosure, Foreclosure rates, Foreclosures, foreclosures for sale, home buyer, Home Buyers, home buying

Both the number of completed foreclosures and the volume of homes in the foreclosure inventory fell significantly last year, suggesting that foreclosures have peaked.
CoreLogic reported today that completed foreclosures for all of 2011 totaled 830,000 compared with 1.1 million in 2010 a 24 percent decrease. In December 2011 there was a month-over-month decrease in completed foreclosures to 55,000 from 57,000 in November 2011. The December 2011 completed foreclosures figure was also down from one year ago when it stood at 67,000. From the start of the financial crisis in September 2008, there have been approximately 3.2 million completed foreclosures.
The new data from CoreLogic also shows that nationally 1.4 million homes, or 3.4 percent of all homes with a mortgage, were in the foreclosure inventory as of December 2011. The foreclosure inventory is the stock of homes in the foreclosure process. Nationally, the number of loans in the foreclosure inventory decreased 8.4 percent in December 2011 compared to December 2010, a decline of 130,000 properties nationwide. The number of loans in the foreclosure inventory decreased by 5.3 percent in November 2011 compared to November 2010 as well.
The share of borrowers nationally that were 90 days or more delinquent on their mortgage payments, classified as seriously delinquent, fell to 7.3 percent in December 2011 compared to 7.8 percent in December 2010.
According to CoreLogic, servicers nationwide stepped up the rate at which they were able to process distressed assets in December 2011. The distressed clearing ratio is calculated by dividing the number of REO sales by completed foreclosures. The higher the ratio, the faster the REO inventory is clearing. The distressed clearing ratio was 1.03, up from 0.94 in November 2011.
“The inventory of foreclosed properties has begun to shrink, and the pace at which properties are entering foreclosure is slowing. While foreclosure filings are being curtailed by a variety of judicial and regulatory constraints, mortgage servicers are completing REO sales faster than they are completing foreclosures,” said Mark Fleming, chief economist with CoreLogic. “This is the first time in a year that REO sales have outpaced completed foreclosures, and part of the reason for the decrease in the foreclosure inventory.”
Highlights as of December 2011
The percent of homeowners nationally who were more than 90 days late on their mortgage payment, including homes in foreclosure and REO, was 7.3 percent for December 2011 compared to 7.8 percent for December 2010, and 7.2 percent in November 2011.
The five states with the highest foreclosure inventory were: Florida (11.9 percent), New Jersey (6.4 percent), Illinois (5.4 percent), Nevada (5.3 percent) and New York (4.6 percent).
The five states with the lowest foreclosure inventory were: Wyoming (0.7 percent), Alaska (0.8 percent), North Dakota (0.8 percent), Nebraska (1.0 percent) and Washington (1.3 percent).
Of the top 100 markets, measured by Core Based Statistical Areas (CBSAs) population, 34 are showing an increase in the foreclosure inventory in December 2011 compared to a year ago, an improvement from November 2011 when 46 of the top CBSAs were showing an increase in the foreclosure inventory compared to a year ago.

Labels: Forclosures, Foreclosed, foreclosed homes, foreclosed homes for sale, foreclosed land, foreclosed properties, foreclosure, Foreclosure rates, Foreclosures, foreclosures for sale, New Category

It is hard to believe that January 2012 is here, and we’ve put another great year of business behind us. GaHomeForeclosures is proud to announce that with the help of our network of listing agents, we sold 239 investor owned foreclosures in 2011, totaling $56M in total sales. We want to thank our loyal affiliated listing agents and quick-responding preferred lenders for helping us to have a very successful year in 2011!

For 2012, GaHomeForeclosures is bringing more homes to market for sale and we anticipate another stellar year of sales. We only pick the best listing agents in the industry and experts in the field of selling foreclosure homes to represent our new construction foreclosures. At GaHomeForeclosures, we understand that a home is more than a house and we invest in each home to get it move-in ready for our buyers. We provide a warranty on any work that we have done for a full year to make sure our buyers are protected and happy in their new residences.

We also want to congratulate our 2011 buyers on their new home purchases and the tremendous value in price that they received for their home. Our preferred lenders were able to offer our buyers the best interest rates on homes that have ever been available, and those rates are staying incredibly low so far this year – especially for first time homebuyers. Now is the perfect time to buy the home of your dreams at the lowest prices in the industry in the last five years, and with our extensive selection of homes, you are bound to find the right one for you.

Labels: Forclosures, Foreclosed, foreclosed homes, foreclosed homes for sale, foreclosed land, foreclosed properties, foreclosure, Foreclosures, foreclosures for sale, georgia foreclosures, Georgia homes

There were 8,845 foreclosure notices in the metro Atlanta area in October, up 16 percent from September's 7,634, according to Equity Depot of Kennesaw.

Foreclosure notices are the first step in the process but do not always lead to a repossession. Property buyers can avoid foreclosure by paying loans or negotiating new deals with banks or lenders.

Bramlett said some of the businesses that one might expect a slow economy to affect are showing strains.

One example that showed up in Equity Depot's numbers were notices for a $175 million blanket loan that secures 19 separate Jameson Inns in Georgia. The W Hotel in Buckhead on Peachtree Street has been advertised for several months on a $36.5 million deed, Bramlett said.

"The economic affect on [hotels and motels], gas stations, truck stops, et cetera is very evident. Don’t expect much of this to change until economic conditions do," he said.

Among residential properties, about 70 percent of notices have run in a prior period, the numbers say.

"This indicates serious delinquencies remain very high," Bramlett said.

"There’s no way to know how many new properties are becoming delinquent based on foreclosure notices here," he said. "It may mean that lenders are simply running notices on the most serious delinquencies. I know [Fannie Mae and Freddie Mac] had instituted some one-year moratoriums for the unemployed. There may be too many factors to really know anymore. Delinquency rates on all mortgages, based on Mortgage Bankers Association figures, have minimally come down this year but are still very, very high."

During good years in metro Atlanta, there were between 2,000 and 3,000 notices a month. They hit a peak in November of 2010 with 13,834, and were above 10,000 for the first three months of this year.

12,000 notices down to date compared to last year. Seems to have hit a plateau at current levels.

Year over year, foreclosures are down 12,154 from totals of 103,603 in 2010 to 91,449 through September.

The lowest number of foreclosures in October in the 13-county metro region was Fayette County, with 135. The highest was Gwinnett, with 1,889, followed by Fulton, with 1,632, DeKalb with 1,377, Cobb with 977, Clayton with 750, Henry with 527, Cherokee with 363, Douglas with 315, Forsyth with 256, Hall with 252, Rockdale with 217, and Bartow with 155.

Labels: Forclosures, Foreclosed, foreclosed homes, foreclosed homes for sale, foreclosed land, foreclosed properties, foreclosure, Foreclosures, foreclosures for sale, Georgia

Labels: Alpharetta, Forclosures, Foreclosed, foreclosed homes, foreclosed homes for sale, foreclosed land, foreclosed properties, foreclosure, Foreclosures, foreclosures for sale

July 06, 2011
FULTON COUNTY - The Fulton County Office of Housing and Community Development will host an information workshop on How to Prevent Foreclosure, Wednesday, July 13, from 10 until 11 a.m.

The session will be held at the Roswell Neighborhood Senior Center at 150 Warsaw Road in Roswell.

Residents who may be having trouble paying their mortgages or could face potential foreclosure in the future because of job loss, illness, a reduction in working hours or other issues that impact their incomes are encouraged to attend.

A Housing and Urban Development (HUD) certified Housing Counselor will facilitate the session.

Information will be provided to inform homeowners of strategies available to help them to maintain ownership of their residences. Information from the HUD website will be distributed as well as a listing of local housing counselors that are available to help homeowners to provide the information required to obtain a loan modification or other assistance from their banks.

The Office of Housing and Community Development is a division of the Department of Housing and Human Services.

For information or assistance with special accommodations to attend the workshop, residents may contact Audra Pender at 404-612-3024.

Labels: Alpharetta, Forclosures, Foreclosed, foreclosed homes, foreclosed homes for sale, foreclosed land, foreclosed properties, foreclosure, Foreclosures, foreclosures for sale, milton, prevent foreclosure, Roswell

The real estate market has all but bottomed out. Interest rates can’t go any lower. As the saying goes: ‘buy low, sell high’! For investors and buyers, now is a golden time to buy.

What if you need to sell before you can buy?

You can sell your home in today’s market, but only if you do three things correctly: price right, stage right and be in the right location. If you don’t properly price your home, it won’t sell. It’s that simple. There is too much inventory on the market. If you don’t stage your home properly, you may be delaying the sale of your property (some agents won’t even show it). And if you aren’t located in a fantastic area, you need to price even more aggressively.

Whether you are an investor looking to diversify your portfolio, or a buyer that wants to get in at the bottom of the market, consider these recent facts:
Interest rate projection by NAR:


In short, it’s never been cheaper to finance buying a home. And compare the prices for gold, which are at an all time high, to the prices of homes, which are at an all time low. You don’t have to be a rocket scientist to figure out where to put your money. Need more proof that we are at the bottom of the market? America’s leading economist, Mark Zandi, gave his thoughts at a recent NAR convention:

“The housing crash is over—nearly. We are now near the bottom,” Zandi said. “There will be no real price growth in 2010 or 2011. Whether home prices weaken is unclear, but it will take two more years to work off excess housing inventory at the current sales pace. Of course, if demand picks up, it would take less time for prices to rise.”
To get some perspective from the inside, we talked to Andy Skillen with Atlanta Intown Real Estate Services, on what he is seeing:

“Every buyer has different goals, some of which are competing”, said Skillen. We have a buyer who wants a great deal on a high rise condo, with the best resale value, and that can be easily rented out. The challenge is that it’s easier to get financing on a unit with rental restrictions, so the resale value is higher, but you can’t just turn around and rent it. The good news is that he can get a 2 bedroom, 2 bath off Peachtree with amazing Big City views for what used to be the price of a one bedroom. For those lucky enough to be buying, there are amazing deals, but it’s still a lot of work to find the best deal.”

An option that some home owners, who aren’t desperate to sell, are considering is to rent out the place they own, and buy another property at 30-40% off the market high. That helps owners offset the losses on the first home, and puts you in a position to make money off today’s low real estate prices.

Labels: first time home buyer tax credit, First Time Home Buyers, Forclosures, Foreclosed, foreclosed homes, foreclosed homes for sale, foreclosed land, foreclosed properties, foreclosure, Foreclosures, foreclosures for sale, Home Buyers, home buying, homes sellers, Real Estate, reasons to buy a home, sell my house, sell your home in a slumping market

It would be unrealistic to say that the real estate market is utterly rosy right now, but neither is it thorn-filled by any means. In fact, things are decidedly looking up: July got some good news, when the National Association of Realtors reported that pending home sales rose 5.2% from downwardly revised June levels, beating economists’ expectations. This is good news for both buyers and sellers.

While challenges still exist—for instance, getting the best price when selling, or securing financing when buying—there are some once-in-a-lifetime opportunities out there, and plenty of happy results can be had for both buyers and sellers. The key for both groups is to remain flexible, adaptable and diligent. To that end, here are some dos and don’ts for today’s buyers and sellers:

For Sellers:

DO’S
Be flexible. Often it’s the little things that push a buyer into the “yes” zone. If the buyer goes on and on about how much they love your icemaker, throw it in. If the closing has to be pushed ahead more than you expected, try to be as flexible as possible and pack the moving van a little quicker.

Clean up. One person’s prize doll collection is another person’s cluttered nightmare. Similarly, a living room filled with Beanie Babies could elicit a reaction of fear, rather than “Aw, how cute!” from a buyer. Put away any personal collections that not only cause clutter, but also make it hard for a buyer to see the home as his or hers, rather than yours.

DON’TS
Don’t be greedy. The market—not your emotions—dictates your home’s price. If comparables in the area, and several trusted real estate agents tell you your home is worth $400,000, you’re not fooling anyone by pricing it at $500,000—and you’re only doing yourself a disservice. Pricing it at market, even a little below, could generate a bidding war, and ultimately get you more money.

Don’t get personal. If you’re selling your house for a certain amount, and someone offers something much lower, don’t take this as a personal affront and refuse to counteroffer. Letting your emotions get in the way can potentially ruin the deal. What’s the harm in making a counteroffer?

Don’t procrastinate. In the current climate, you might be scared to try to sell your home, as you may have to face a lower selling price than you may have gotten before the recession. But remember, the house you buy might be even lower, commensurately. It’s all relative. So if you’re serious about selling, consider doing it now. Also, acting before the cold months come is a good idea, as the winter months are historically harder for home sales.

For Buyers:

DO’S
Get a home inspection. It’s important to hire a trusted home inspector to check out the house’s potential issues and problems. Don’t skip a home inspection because you’re afraid of what you might hear—many issues sound more serious than they actually are, and can be fixed easily. And if something deal-breakingly serious is turned up, as disappointing as that is, it can save years of heartache and financial outlay. Better to walk away from a clunker.

List your place before you look for another. If you’re truly serious about looking for a home, list your place first. In the current economy, banks want to make sales as uncomplicated as possible—and contingency sales, which can be very complicated, are often rejected.

Talk before you act. Don’t ever start a home search without a firm budget not only in mind, but literally written down. Mutually agree with yourself—or with your partner, if you’re buying with someone else—long before you start seriously searching. Going out of that zone because of a place you just “gotta have,” or are emotional about, could put you in dire financial straits later. You don’t want to buy a house that isn’t affordable for you, and then be worried about paying for dinner and a movie on Saturday night.

DON’TS
Don’t be a design snob. If someone’s enormous bathroom has wallpaper border containing frolicking kittens and pastel flowers, or a wall that’s a nuclear shade of green, we understand this can send you into style shock. But stand fast and ignore bad décor. Instead, try to envision the space raw. Besides, you can always redecorate once the home is yours.

Don’t make a silly offer. There’s nothing wrong with making an offer below asking price—it’s no secret that today, many homes are selling for under the asking price. But going 40% below the asking price may anger the seller. Some sellers, especially more emotional ones, won’t even bother counter offering an outrageously low offer. Feel free to make a deal—just don’t make an offer so low that you’ll be kicked off the table.

Labels: Forclosures, Foreclosed, foreclosed homes, foreclosed homes for sale, foreclosed land, foreclosed properties, foreclosure, Foreclosures, foreclosures for sale, Home Buyers, home buying, Home Sales, home selling, Homeowners, homes, homes sellers

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Brian and Jennifer Vanderhoff Vanderhoff Real Estate (770) 331-1206 homes@400n.com http://www.vanderhoffhomefinder.com    Listed by: Vanderhoff REal Estate

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Following a sharp drop in the months immediately after the expiration of the home buyer tax credit, pending home sales have modestly risen, according to the National Association of Realtors.
The Pending Home Sales Index, a forward-looking indicator, rose 5.2% to 79.4 based on contracts signed in July from a downwardly revised 75.5 in June, but remains 19.1% below July 2009 when it was 98.1. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.
Lawrence Yun, NAR chief economist, cautioned that there would be a long recovery process. “Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” he said. “But the recovery looks to be a long process. Home buyers over the past year got a great deal, and buyers for the balance of this year have an edge over sellers. For those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity.”
Yun added, “Affordability could reach a generational high in the second half of this year because of rock-bottom mortgage interest rates, helped partly by the Fed’s very accommodative monetary policy. The loan underwriting standards are tighter, but home buyers can improve their chances of getting a loan by staying well within their budget.”
The PHSI in the Northeast rose 6.3% to 62.5 in July but is 21.1% below a year ago. In the Midwest the index increased 4.1% to 66.7 but remains 25.7% below July 2009. Pending home sales in the South rose 1.2% to an index of 86.3, but are 15.6% lower than a year ago. In the West the index jumped 11.6% to 95.0 but is 17.6% below July 2009.
The national index had fallen 29.9% in May and another 2.8% in June.

Labels: for sale, Forclosures, Foreclosed, foreclosed homes, foreclosed homes for sale, foreclosed land, foreclosed properties, foreclosure, Foreclosures, foreclosures for sale, Georgia homes, Home Buyers, home buying, Home Sales, home sales report, home selling, homes

A Georgia man has won the right to fly the American flag outside his home after getting sued for failing to remove the 16-foot flagpole from his front lawn, MyFoxAtlanta.com reported.

Ron Tripodo of Canton, Ga., was embroiled in a costly legal dispute with the Bridgemill Homeowners Association over the flagpole, displayed prominently in his front yard for over a year.

"I got a letter saying, 'Take your flag down. You can put it in your backyard' and I just refused to do it," Tripodo, a former Army Reservist, told the TV station.

The homeowners association, which claimed the flagpole was an "obstruction," reportedly sued Tripodo for $25 each day the flag flew in his front yard -- a charge that totaled $32,000.

A Cherokee County judge, however, dismissed the lawsuit this week, freeing Tripodo from having to pay any fines.

"I wish I didn't have to go through all this aggravation, but I was going to defend this flag all the way," Tripodo said.

Tripodo said he believed the 2006 Freedom to Display the American Flag Act superseded any subdivision rules that prohibited the flagpole.

Labels: American Flag, Flying the American Flag, Forclosures, Foreclosed, foreclosed homes, foreclosed homes for sale, foreclosed land, foreclosed properties, foreclosure, Foreclosures, foreclosures for sale, Ga, Georgia

Traton Homes is offering home buyers up to $20,000 in savings of a new home in Atlanta during their 39th Anniversary Sunsational Summer Savings. Through September 21, 2010, prices have been reduced and/or incentives offered on 17 remaining new homes in East Paulding, Cherokee, Cobb and South Forsyth.

The featured homes now range from $189,700 for homesite #129 in Rosewood Park in East Paulding to $462,900 for homesite #34 in Kennesaw’s Paper Chase Farm. At all price points in between, buyers will find sale priced homes in Stonehaven at Vinings in Smyrna; Estates of Fernwood Creek near Roswell; The Pointe at Kirk Farms and Paper Chase Farm in Kennesaw; and Lochshire and the Gates at Parkside Village in Cobb.

The Gates at Parkside Village offers the only townhome on the list, with the three-bedroom end unit at homesite #46 reduced to $249,900. The old world feel of the community is accentuated by luxurious interiors appointed with granite, rich mouldings, hardwood floors and more. Proximity to Kennesaw Mountain Park and the Marietta Square means dining, shopping and recreation are nearby.

One ready to move-in home located in Kennesawy’s Paper Chase Farm is reduced to $462,900 during Traton’s Sunsational Summer Savings. Located in a community where homes are priced up to $1 million, the five-bedroom, four-bath home on homesite 34 has a guest suite on the main level with a luxurious owners suite, three additional bedrooms and a media room upstairs. The home is on a basement lot with a 3-car garage.

Traton Homes is known for offering homebuyers “Altogether More!” with more experience, more impressive architecture, more outstanding features and more rewarding lifestyles. Traton currently has 14 communities throughout Atlanta. With homes in Cobb, Cherokee, Roswell, Fulton, Paulding, South Forsyth and South Fulton, buyers are sure to find the location and features they desire.

If you’re ready to join the nearly 7,000 Atlanta families who come home to their Traton home each and every day (and take advantage of Sunsational Summer Savings before it’s too late), visit the Traton Homes website today.

Labels: Cherokee COunty, Cobb, Cobb County, Forclosures, Foreclosed, foreclosed homes, foreclosed homes for sale, foreclosed land, foreclosed properties, foreclosure, Foreclosures, foreclosures for sale, Forsyth, Forsyth County, marietta, Traton Homes

Low mortgage rates and low prices were all expected to fuel the recovery of the housing market. Although foreclosure activity has slowed down in the first half of 2010, monthly reports show an increase in foreclosures from last month.

The online marketplace for foreclosure properties RealtyTrac, in its ‘Foreclosure Market Report’, shows that 325,229 houses received foreclosure filings in the country. This number includes default notices, scheduled auctions and bank repossessions. This indicates a 4 percent increase from June’s numbers. This is one more month in which foreclosures have exceeded the 300,000 mark as it has happened for the last 17 months straight.

James J. Saccacio, chief executive officer of RealtyTrac, explained the latest foreclosure activity by saying: “Declines in new default notices, which were down on a year-over-year basis for the sixth straight month in July, have been offset by near-record levels of bank repossessions, which increased on a year-over-year basis for the eighth straight month.”

Making the list of states with higher foreclosure filings were Nevada, Florida, and California, among others. In Nevada, one in every 82 houses received foreclosure notices, thus topping the state foreclosure list for the 43rd month in a row. In Florida, one in every 171 houses was foreclosed, similar to California where one in every 200 homes received filing.

Banks foreclosed on 92,858 U.S. properties last month. This is a 9% increase from the prior month. Similarly, Foreclosure auctions were scheduled for the first time on 135,248 U.S. properties in July, down up 2% from the previous month.

According to RealtyTrac’s reports for July, REO total was the second highest monthly total since it began tracking REO activity in April 2005.

Labels: Bank Owned, Bank owned properties, Forclosures, Foreclosed, foreclosed homes, foreclosed homes for sale, foreclosed land, foreclosed properties, foreclosure, Foreclosures, foreclosures for sale

“Buy and bail” is a phrase often used by real estate professionals to refer to the process in which a buyer attempts to buy a new property before they walk away from an old one and default on their previous loan. Often, the property they walk away from is an “underwater” property that is worth less than its mortgage, and therefore it is no longer desirable for the owner, the new property will most likely be a lower priced property with a more affordable loan. With house prices falling in many areas of the U.S, this is often a very appealing option for buyers.

Although this practice is considered a fraud if borrowers lie on the loan application, and many attempts have been made to stop this practice, the buyer is often driven by greed or desperation and finds no other solution but to “buy and bail”. If the buyer is able to get a new financing for the new house, he or she is taking a step to save his or her credit rating which can be greatly ruined by walking away from their previous loan.

Many attempts have been made by the two biggest U.S mortgage companies Freddie Mac and Fannie Mae to stop this practice. They have banned in most cases the use of rental income from an existing property to qualify for a new mortgage unless the first property has at least 30 percent equity. Additionally, they usually require reserves equal to six months of loan payments for both homes. Pete Bakel, a spokesman for Washington-based Fannie Mae said these measures have been helpful in blocking almost all buyers who attempt to buy and bail. However, the desperation of the buyers sometimes is stronger than the attempt to stop them from executing their “buy and bail” plans. Savvy buyers are sometimes able to cheat the system and find enough loopholes to get away with this.

“Making it possible to pursue people who do this particular kind of default would go a long way to addressing the buy-and-bail problem,” said Jay Brinkmann, chief economist for the Mortgage Bankers Association in Washington. To this date, only two-thirds of U.S states allow lenders to pursue a borrower after foreclosure by seeking a deficiency judgment allowing a lien on the new property for the amount owed on the previous mortgage. Furthermore, Mortgage lenders are also partly responsible for the “buy and bail” dilemma. Although some of them are responsible and try to get the complete truth from the prospective buyer, others simply do not try and all they care about is that there is enough income for the buyer to pay both mortgages.

According to brokers such as Collier and Meg Burns, senior associate director for congressional affairs and communications at the Federal Housing Finance Agency “People were holding on, hoping the market would turn around,” Collier, who won’t work with applicants who intend to go into foreclosure, said in a telephone interview. “But now they’re giving up because there’s no light at the end of the tunnel in places like Florida.”

Another raising concern reported by the New York-based Morgan Stanley in an April 29 report, is that about 12 percent of residential-loan defaults in February 2010 were the responsibility of homeowners deciding not to make payments even though they could afford to. Brent White, a law professor at the University of Arizona in Tucson said that people who choose to default typically have lost $100,000 or more in property value.

Labels: Bank Owned, Forclosures, Foreclosed, foreclosed homes, foreclosed homes for sale, foreclosed land, foreclosed properties, foreclosure, Foreclosures, foreclosures for sale, Walking from your home

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Brian and Jennifer Vanderhoff
North Fulton County REALTORS
Vanderhoff Real Estate
(770) 888-9269
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North Fulton County, GA Real Estate, Condos, Homes for Sale
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Labels: Bank Owned, Bank owned properties, foreclosed homes, foreclosed land, foreclosed properties

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Brian and Jennifer Vanderhoff
North Fulton County REALTORS
Vanderhoff Real Estate
(770) 888-9269
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Milton, GA Real Estate, Condos, Homes for Sale
North Fulton County, GA Real Estate, Condos, Homes for Sale
Forsyth, GA Real Estate, Condos, Homes for Sale
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Labels: foreclosed homes, foreclosed land, foreclosed properties, foreclosure, Foreclosures

You think it’s hard selling a house these days? Try unloading a subdivision.

And not just any subdivision, but one with few if any completed homes and a weedy patch where the swim-and-tennis center was planned.

That’s the reality many Georgia banks find themselves in amid a foreclosure crisis that has claimed not only individual homes but also entire failed developments.

These idled, “zombie” subdivisions can be found across metro Atlanta, but they’re most prevalent in outer-ring suburban areas. Selling them has proven tough, with some properties sitting on the market for months on end without even a nibble.

The fallout has been stark.

Banks that backed these projects are taking it on the chin, recording huge losses as they foreclose on property and make sales at a fraction of the original loan price.

In the past year, 16 Georgia banks have failed, more than in any other state, largely because of residential real estate losses. Dozens more are struggling.

Residents who bought in these troubled developments, meanwhile, are seeing their home values plummet and in many cases are still waiting for promised amenities such as swimming pools to be built.

To say the market has been sluggish would be an understatement. The main problem is sheer volume – a staggering 150,000 vacant housing lots across metro Atlanta are available, more than a decade’s supply at current absorption rates.

The median sale price for empty lots has plunged from $57,000 at the height of the housing boom in 2007 to $30,000 this year, according to Smart Numbers, a Marietta company that tracks the local real estate market.

“It’s going to keep going down, because we have too many lots, and there’s not enough demand,” said Steve Palm, the firm’s president.

The hardest hit areas are on the region’s fringe, Palm said, such as Bartow, Jackson and Newton counties, where there’s tons of supply and few sales.

Sitting in front of a computer at his home office, Palm pulls up a color-coded map of metro Atlanta showing lot supply by U.S. Census tract. An ominous arc of dark reds and browns encircles Atlanta.

“This is the ring of death,” he said.


It’s “depressing”

A turnaround couldn’t come soon enough for residents of WaterLace, an upscale subdivision in south Fayette County where construction stopped after only a handful of homes were built.

Nearly 400 homes were planned for the 600-acre site, which includes a picturesque lake. But the project shut down last year and has become a suburban ghost town.

Winding streets and cul-de-sacs are lined with vacant lots. The unfinished clubhouse sits at the end of a dirt path, surrounded by chest-high weeds.

It’s not clear who will finish the job, or when.

The project’s developer, Stephen Macauley, went bankrupt last year. The lender, Security Bank of Macon, tried to sell the property through an Atlanta real estate company, but the bank failed two weeks ago. The Federal Deposit Insurance Corp. is now responsible for selling the property.

Jeff Hood, 39, moved to WaterLace last year with his wife and two children.

“We were promised these amenities and they’re not here. There was going to be a pool, a clubhouse, a walking trail,” said Hood, an attorney. “It’s kind of depressing seeing all the land. Some of the property is undeveloped. It’s an eyesore, all the weeds.”

Don and Stephanie Williams, who paid $475,000 for their home at WaterLace, hope a buyer will come in and finish the development. For now, they’re trying to enjoy the peace and quiet that comes with living in a failed subdivision.

“We have about 12 to 13 families out here, they are all great people,” said Williams, standing on his front porch on a recent sweltering afternoon. “We have all bonded together. We are in this together.”


Bankers’ tough choice

The flood of distressed subdivisions is unprecedented and has given banks numerous headaches.

Is it more cost-effective to complete half-finished homes before selling or to put them on the market as-is? Should they sell lots in a distressed market or hold onto them until prices rebound?

Complicating matters, subdivisions often were financed by more than one bank. And different lenders frequently disagree on what steps to take when problems arise.

“Every bank has a different model,” said Robert J. Romano, executive vice president with Coldwell Banker NRT Development Advisors. “Some want to hold until the market returns, some price to move [property,] ... and some just dump them.”

While the supply of lots remains at an all-time high, the pool of buyers willing and able to jump into such a distressed market is small.

The players include large national builders healthy enough to construct new homes and real estate investment companies with the resources to hold onto lots until the market turns around.

The market remains relatively strong in some spots, experts say, including affluent pockets of north Fulton and Forsyth counties.

Banks take different approaches to disposing of distressed property. Some sell lots and homes through real estate agents, and a growing number list foreclosed properties on their Web sites.

A few banks are throwing hundreds of lots from various subdivisions together and asking investors to make bids on some or all of the holdings.

Some banks eager to unload property are dumping huge quantities of vacant housing lots at fire-sale prices that have dipped as low as 20 to 30 cents on the dollar.


Crying foul

Synovus, the second-largest banking company based in Georgia, has been aggressively selling troubled assets, including many lots in the Atlanta area. Richard Anthony, the company’s president and CEO, said Synovus sold about 1,000 lots in the second quarter alone.

While the company has sold lots through auctions and bulk sales, the best prices have come when its bankers go out into their communities and sell property to local builders and developers, Anthony said.

But some Georgia banks are crying foul, saying the playing field is far from even when it comes to disposing of distressed property like vacant lots.

Large banks that have received federal bailout funds are better able to sell property at sizable losses, which pushes down prices for everyone, said Joe Moss, at Security Exchange Bank in Marietta.

“We don’t have the ability to take asset write-offs against taxpayer money like these larger banks have,” Moss said. “That’s really affected the market.”

Another victim of the crisis: home owners who bought in subdivisions that later failed.

Opportunistic companies are buying up remaining lots at a fraction of their original value, meaning they’re able to build new homes and sell them at lower price points.

The original owners may grumble at the erosion of their property values, but that beats the alternative, said Eugene James, division director for MetroStudy in Atlanta.

“It’s better to have some neighbors and have the development built out than have it look deserted,” James said. “Unless you prefer there being only five houses in a 300-lot development, so you can go and hit some golf balls.”

Those charged with selling failed subdivisions face a huge challenge.

Consider Jennah Village, a small, 28-lot subdivision in south Fulton County that fell into foreclosure before any homes could be completed. Five half-built homes sit beside empty lots.

The homes have generated some interest, but no one has even looked at the lots, said Logan Cook, the project’s real estate agent.

Cook is selling the property for First State Bank of Stockbridge. The small Henry County lender is struggling with a portfolio of bad real estate loans that reached $87 million this spring.

Here’s how Cook describes the current market: People looking to buy foreclosed property are turning first to finished homes, which are the easiest to sell. Partially built homes are next in line, followed by empty lots.

The 22 lots Cook represents at Jennah Village are listed for $25,000 each, down from an original asking price of around $40,000.

But no buyer has made an offer, and until one does it will be unclear what they’re really worth

Labels: Bank Owned, Bank owned properties, foreclosed land, foreclosed properties, foreclosure, Foreclosures, subdivision, vacant homes, vacant lots