Realty Trac has 222 foreclosures in my zip code

[Maggie_May]

This is not even counting the Auctions or Pre-foreclosures.
This is just terrible for everyone
This not a very big town either.

http://www.realtytrac.com/pub/landing/optimized_c.asp?&accnt=64807

[gasperc]

1. Yesterday, I saw a house in a $400,000+ neighborhood

With a broken garage door, A PAD LOCK FOR A FRONT DOOR KNOB, and foreclosure notice in the window with a note to report break-ins or damage to the property. I'm sure the neighbors are pissed. It's not an eye sore, yet. metro detroit, MI

[NashVegas]

2. 291 In the Most Exclusive Zip Code in Nashville

37205

1,033 in the working class 37214

[AlCzervik]

3. here is the data from my zip code.

http://www.realtytrac.com/MapSearch/MapSearch/MapSearch.aspx?zipcode=95624&zipOnly=true

scary but this has been going on for a while here.

[Maggie_May]

6. Wow!!!!

[AlCzervik]

7. yay and Wow not in a good way.

[gristy]

9. That's not just your zip code - it's all of Sacramento county

When you enter a zip code it gives everything for the entire county in which that zip code lies

[Occulus]

20. Untrue.

I just typed in two zip codes which I know are both adjacent and resting within the same county, and got different results.

[OmmmSweetOmmm]

4. 973 in my zip! This is a very large town, but this figure is staggering.

[Maggie_May]

5. If you say that the average home was 50,000

and thats a real low cost for these homes the cost of these foreclosures are 11,100,000. Think about all over the United States.

[gristy]

8. I don't see a foreclosure category

Just these:

# Pre-foreclosure
# Auctions
# Bank-Owned
# Government-Owned
# For Sale By Owner
# Resale/MLS
# New Home

[Maggie_May]

12. Most homes that are bank owned

are going through the foreclosure process or are in it. The bank forecloses on the loan than the bank owns it.

[slackmaster]

17. Same with "Auctions"

It's a complex subject and varies a lot by state.

[Occulus]

21. Who owns a foreclosed home? n/t

[melm00se]

25. once the foreclosure is

done and completed, the owner of the property is the person/entity with the highest bid at the auction, the title transfers to them. That might be the lender (making it an lender REO property), a developer, a speculator or a private individual.

[Occulus]

26. But, quite often, a bank.

Yes?

[melm00se]

27. not necessarily

the bank is a bank, not a real estate company so they would much rather NOT have any REO properties on their books. Both for accounting reasons as well as expense reasons.

From the accounting POV: REO real estate is a liability on the balance sheet(banking is an odd industry: assets to "normal" people/businesses are liabilities to a bank).

From an expense POV: If the bank takes title to the house, they will incur some (if not all of these costs):

Eviction expenses (not every owner voluntarily leaves the house after foreclosure)
Inspection (make sure that no one moves in while vacant - it happens)
Insurance (both property as well as liability)
Sales (just like other folks, realtors/closing attorneys have to get paid)
Repairs (not common but the bank will do repairs to ensure no additional damage to the property - busted windows and the like)
Utilities (lights, heat and ac have to be on for both maintenance and sales reasons)
Lawn mowing and the like
HOA fees (if applicable)
Property taxes (if not sold by tax time)

and then, on top of that there is the loss on the sale of the property. if the property was worth the balance and fees left on the mortgage someone else would have bought it.

so it is quite possible that a property will look like this:

Mortgage balance: $140K
Attorney fees: $5K
late fees $1K
back insurance payments paid by lender: $0.6K
Back taxes paid by lender: $2K
total "upset" $148.5K

market value of property: $150K

bank bids their "upset" $148.5k, no one else bids, whammo, they own the property (which is why some lenders will bid less than their upset in hopes of not incurring the following):

post foreclosure:
management company: $250-ish/month
heat/water/electric: $200/month
HOA dues (if applicable): $40/month
Insurance (more expensive as the house is not tenanted): $200/month

so the longer the house is in their possession, these costs add up.

also, the longer the house is on the market, the more likely the lender will have to cut their sales price

so let's say it's on the market for 120 days:

$148.5K + $2.8K = $151.3K
House was originally offered at $140K
sold for $120K
less $6k in real estate fees
net price to the lender: $114K
loss: $37.3K

Now of course some of this may be offset by PMI, but not all. the remainder is generally 100% uncollectable: the borrower probably has filed bankruptcy along the way and/or the foreclosure judge is disinclined to sign off on a deficiency judgement (hell the borrower just lost their home. why pile insult on top of injury?)

But suffice it to say that if the lender bit the bullet and bid, say 10% less than their upset ($134K), someone may have bought the house at auction for that amount and it would have "saved" the lender all the monthly costs + the realtor's fees + "cost" that hits the balance sheet.

This is just one house, imagine have 40-50-60-100-200 houses on the books...a $10K here (on a low end house) and $100K (on a higher end house) begins to add up.

Contrary to popular belief: banks don't want the house back, it costs too much money.

Now why do they foreclose? Most banks don't directly own the mortgage that they service, but they do have a servicing agreement with the mortgage owner and it usually states: If loan goes X days past due, start foreclosure proceedings. if they don't, they run the risk of losing their servicing agreement (which can be huge - ~1% of the total outstanding balances per month).

Now this arrangement makes it difficult to also "work with the bank" as the bank would be more than happy to deal with this and work something out, but the investment pool may not be in a position or staffed to deal with such issues.

this all gets convoluted and leads to a lot of issues but, not being able to lay off the mortgage to an investment pool could have far more implications. Namely, banks would have a finite amount of money to lend, making them far more selective on their borrowers than they are (IOW we'd go back to the days of "you can only get a loan if you don't need a loan").

[Gold Metal Flake]

10. Looking at my zip code, I see the same houses page after page.

The total count was misleading. Still, I appreciate the link.

Anyways, It seems as though you have to

[Occulus]

23. Try another zip code

That is so not the case for the Michigan zips I searched.

[slackmaster]

11. Wow, some possible major bargains in mine

This is just terrible for everyone

Not everyone. One of my coworkers just bought a nice big recently refurbished 2 BR condo at auction for $210K. It last sold for $370K, and is in a nice nieghborhood. He did very well. The previous owner got screwed. The lender lost money.

[neocon_hater]

15. maybe we can

turn this mess into a way for working poor people to get into a home. the gov should snatch these up while the market is down then subsidize them for poor people to live in

just my $0.02.

[slackmaster]

16. That is what natural market forces are bound to do on their own

The current price levels are untenable. They have to come down.

[Occulus]

24. Buyer's market when they do n/t

[Holly_Hobby]

13. 5,340 foreclosures in my city, pop. 310,000 n/t

[texasleo]

14. 1,163 in my zipcode

:(

[kineneb]

18. wow! I just checked for our general area

granted this is a vacation area, so many of these were second homes...but eeeeek!

Pre-forclosure=106
Auction=14
Bank owned=83
Gov. owned=3
FSBO = 7
Resale=297

[Greyskye]

19. 410 properties in my zip code

Cheapest is $222,700. Most expensive is $1,050,000.

Wow. I just noticed 2 "Foreclosure" signs in my neighborhood this weekend.

[Occulus]

22. If you want a *real* shock, go into Google Earth

(assuming of course that you've obtained it) and turn on the zip code layer (under mode/US Government) so you can actually see just how small an area you're dealing with. For example:



(edit: the yellow line is the boundary of the zip code.)

Search Results in 48070
659 Properties match your search.

:wow: