.

Foreclosure Firm Gearing Up for More Foreclosures

Foreclosure firms have started the process of getting to all the backlogged files of foreclosures started but halted.

I had lunch with an attorney last week. He is one of the largest foreclosure firms in the State of Connecticut. We spent a lot of time talking about the robo-signing mess and how that impacted the foreclosure process and how it brought the process to a screeching halt.

He said the breaks are off and the mortgage servicing companies are beginning to move forward with more foreclosures. He told me that he had a tremendous backlog already in the pipeline, most of which they will have to start all over, but many are in various stages.

The bottom line, more foreclosed properties will be hitting the market, going forward. 

Foreclosure Pipelines Refilling Nationwide, Led By East Coast States

By: Dan Green

Banks Catch Up On Foreclosure Backlog

In July, for the third straight month, the foreclosure-tracking firm RealtyTrac reports that foreclosure pipelines are filling up. As compared to July 2011, last month’s foreclosure starts climbed 6 percent to more than 98,000 units nationwide.

The term “foreclosure start” in a blanket term comprising both default notices and scheduled foreclosure auctions. In some states, as compared to one year ago, foreclosure starts surged:

  • Connecticut : 201% increase in foreclosure starts

  • New Jersey : 164% increase in foreclosure starts

  • Pennsylvania : 139% increase in foreclosure starts

Not surprisingly, each of the above states are judicial foreclosure states which means that all foreclosures must go through the state court system. Last year, there was uncertainty about how foreclosures should be processed. Now, as a result of the recent $25 billion mortgage servicer settlement, rules are more clear and foreclosure activity has restarted.

Foreclosure starts should remain elevated for the next several quarters, at least.

Buying A Foreclosure? Buy Smart.

Buying a foreclosed home is different from buying a “regular home”. Whereas a regular home is sold in move-in condition (presumably), with a foreclosed home, there is no such presumption. Foreclosed homes are typically sold “as-is” which means they may be defective to the core.

When you buy a foreclosed home, you may be buying a home with faulty electrical, gutted plumbing, and worn-down roofing. You’re allowed an inspection in most cases, but fixes and repairs are the buyer’s responsibility — not the seller’s. And for serious damage — damage that renders the home uninhabitable — buyers will find that banks are unwilling to offer financing until said repairs are completed.

No wonder foreclosed homes sell so cheaply!

As compared to comparable, non-distressed homes, foreclosures typically sell for 20% off. Homes in great condition, however, won’t sell for nearly that cheap. This is why foreclosure-shopping home buyers — especially first-time home buyers — are advised to work with a real estate agent. If you don’t know what to look in a home for when you’re buying from a bank, you’re more likely to get the short end of the bargaining stick.

You may not get a mortgage, either.

Foreclosures : Eligible For Low- And No-Down payment Mortgages

The good news is that foreclosed properties are eligible for the same low- and no-down payment mortgages as every other home for sale. Via the FHA, home buyers have the option to make a minimum 3.5% down payment. Via the VA and USDA, eligible home buyers can finance 100%.

Even the FHA’s construction loan — the 203k mortgage — is an option.

If you’re buying a foreclosed home, or just thinking about it, take a look at today’s mortgage rates. See how the home’s expected monthly payment will fit into your household budget

 image:renjith krishnan/freedigitalphotos.net

Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294 Email: joe@righttracfg.com

www.righttracfg.com

www.joepetrowsky.com

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Kathie August 30, 2012 at 10:44 PM
How said !!!! Especially if You worked all Your life for a Home, and then had 2 take out a second Mortgage to pay for other BILLS.. this is not the America I know, when You work hard for something it's YOUR'S not the Government's which is what's happening with what they are doing to people..And another thing you have to pay to see a foreclosed property because my Daughter asked every realtor in Enfield CT to lQQk at foreclosed houses and they claimed to have none, but I walk all over town and see these signs (FORECLOSED) ..DUH !!! the BANKS own them and they won't let u see or buy them for some reason
Jim G. August 30, 2012 at 11:38 PM
I don't know of too many cases where people with a mortgage that was within their means (using the long-standing traditional yardstick) and did not cash out the equity in their house are having trouble. The vast majority of foreclosures are on those who bought far more house than they could legitimately afford (no matter how E-Z credit and terms got at the peak) or took out seconds and thirds to spend that "free money" on RVs, vacations and other unneeded luxuries. If you fell for the BS the housing and lending industries were churning out, you don't really have anyone to blame but yourself. The fundamental tests for 'can we afford this' haven't changed since mortgages became common in the 1920s.

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