foreclosures?

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fiasco007 asked:


Can you really get forclosed homes for pennies on the dollar?

Tags: Forclosed Homes, Foreclosures, Pennies On The Dollar

August 8th, 2008 |

Tags: Forclosed Homes, Foreclosures, Pennies On The Dollar

6 Responses to “foreclosures?”

1. Seament
   August 11th, 2008 at 12:42 am
   

   possibly but highly improbable, likely anything you could get that cheap would be in an undesirable area and/or be in need of significant repair

   
   
2. Mortgageman
   August 12th, 2008 at 6:52 am
   

   Yep. Banks are motivated sellers. In most cases, the home has been trashed on the way out.

   
   
3. Gem
   August 13th, 2008 at 4:52 pm
   

   Maybe through auctions.

   But if you are not knowledgeable about the law and local zoning ordinances, you could also find yourself owning a money pit.

   If the banks were so willing to settle for “pennies on the dollar”, then why would anyone be in foreclosure to begin with?

   The only people who make money from the information they tout and sell are the people who convince suckers to send away for info.

   
   
4. DJ B
   August 16th, 2008 at 6:53 am
   

   Foreclosures become more than some bargain for
   Jim Buchta, Star Tribune

   No one needs to remind Danelle Hoeppner that the number of mortgage defaults is skyrocketing. Almost two months ago, she and her fiancé, Brad Cheney, made an offer on a Bloomington house that was in default, but they have yet to get a response from a California lender that holds the mortgage.

   “With all the houses on the market, don’t you think they’d want your money?” Hoeppner said. “I guess that’s not how it works.”

   If you believe the infomercials promising instant wealth from distress sales, then the record number of foreclosures should mean easy pickings for investors. But real estate agents and prospective buyers say that offers on many bank-owned houses go unanswered for weeks and! that closings are sometimes abruptly canceled.

   Sales agents blame the delays on a growing backlog of listings and on ill-prepared mortgage companies that might be hundreds of miles away and grossly understaffed. Some experts say that buyers themselves are contributing to the problem by making unrealistic offers in hopes of snagging a bargain.

   “It’s unbelievable, and I’m hearing this from every agent I talk to,” said Jay Anderson, of Coldwell Banker Burnet in Minneapolis, who has been waiting six weeks for a response to an offer of his own on a foreclosure home that he plans to hold for investment.

   Listings backlog is growing

   Experts say that buying a bank-owned property shouldn’t take longer than a traditional transaction and that most come off without a hitch, but real estate agents say some buyers are facing increasingly frustrating delays as mortgage delinquencies rise.

   Earlier this month, a Minnesota study based on sh! eriff’s sales said there were 11,207 foreclosures statewide in! 2006, a nd a record pace has continued through 2007. In July alone there were 975 foreclosures in the 13-county Twin Cities metro area, up from 392 a year earlier, according to RealtyTrac.

   The sluggish housing market is doing little to help those who are unsuccessfully trying to sell their houses before the situation comes to a final sheriff’s sale. These houses often become “short-sale” listings, in which the owner has made arrangements with the lender to sell the property for less than is owed so that it won’t go back to the lender.

   Those transactions can be more complicated, in part, because the sale terms must be approved by the lenders. Additionally, those lenders often are in offices far away where loss-mitigation departments are struggling to process the listings and to prevent other homeowners from meeting the same fate.

   Richard Bauer, the agent representing the anxious sellers of the house that Hoeppner and Cheney are trying to buy, said that, acr! oss the country, lenders are struggling to adapt to changing market conditions.

   Bauer said that he has received four offers on the Bloomington house, but that none of the other buyers was willing to wait for the lender to process the offer, leaving the sellers closer to foreclosure.

   “You hear that and it doesn’t sound logical,” said Bauer, an agent with Edna Real Estate in Minneapolis. “But you ask: ‘Is this whole mess logical?’”

   An expert’s view

   Danielle Babb, a California-based real estate investor and author, said inquiries about bank-owned listings have increased 400 percent nationwide, but because a typical lender can process only 10 to 12 a day, the levels are becoming unmanageable.

   Babb said most major lenders and brokers are well-equipped to handle the barrage and have large staffs that can be reallocated from one task to the next. But many small- and medium-size companies that are new to the mortgage industry just! aren’t nimble enough to process these transactions quickly en! ough, sh e said.

   “And with layoffs [happening within the industry], banks are even more understaffed, so they’re not ramping up yet,” said Babb, who recently coauthored “Finding Foreclosures.”

   Dan Arrigoni, president and CEO of Twin Cities-based U.S. Bank Home Mortgage, said his company doesn’t have a backlog of listings, in part because it didn’t offer the riskier sub-prime and Alt-A mortgages that are much more likely to default.

   The company, which works with a national real estate service and local sales agents, now has just under 120 properties, and the average market time for them is about four months.

   “The Realtors want to sell them as bad as we do,” Arrigoni said.

   But he acknowledges that many mortgage companies are preoccupied with staying in business. “These companies are struggling to survive and to fund loans,” he said.

   Patrick Carey, senior vice president of default and retention operations for Wells Fargo Home Mortga! ge, said that while the number of listings his company owns has increased, the firm has ramped up staffing and training to meet demand.

   Carey said his department is trying to process its houses quickly in large part to avoid negatively affecting the community.

   Foreclosed houses can be a drag on property values if they fall into disrepair or if they are sold at fire-sale prices.

   “We don’t want to deteriorate values in a given neighborhood,” he said. “Investors need to get market price for that property.”

   From both sides

   Byron Anfinson of Coldwell Banker Burnet said he has seen the situation from both sides. He has had buyers who were essentially left homeless because of problems with title work that delayed a closing, but he also has received a response from some lenders in as few as 15 minutes.

   Lenders blame consumers for some of the delays, either because of ridiculously low offers or because of incomplete pape! rwork submitted by the buyers.

   Jim Miley, president o! f reside ntial real estate for Bremer Bank in Minneapolis, said many lenders are losing big bucks on their listings because they financed them at the peak of the market or extended credit beyond the value of the property.

   “We’ve had some very zealous lending going on,” he said.

   Some even speculate that lenders aren’t eager to sell their listings because they’re waiting for the market to improve or the market has changed since they priced the listing.

   Patrick and Briana Schiebout wondered if such a situation happened when they bought their split-entry house in Rosemount. The first-time buyers saw it, loved it and made a full-price offer in an effort to clinch the deal.

   It took the bank seven weeks to respond, and then it countered with an offer slightly higher than the original list price.

   The couple, who saw a foreclosure as a great opportunity to finally get into the market, were willing to pay the higher price because they just didn’! t have the energy to go through the process all over again.

   “We threw our hands up in the air,” Patrick said. “We didn’t want to wait another seven or eight weeks, so we accepted.”

   
   
5. starz
   August 19th, 2008 at 3:50 pm
   

   Check with your county courthouse.

   
   
6. John Rosa
   August 19th, 2008 at 6:37 pm
   

   Yes.

   There are two types of foreclosures, bank foreclosures and tax deed foreclosures. Bank foreclosures is when they didn’t pay their mortgage and the bank took back the home to be sold off. You will usually save 20-25% from the market value if you participate in the auction.

   A tax deed foreclosure is when the owner(s) didn’t pay property taxes and the home or property was foreclosed. This usually happens when someone died, or they left the home for one reason or another (divorce, war, etc.) and didn’t care about it anymore. I’ve seen homes sold in this area of foreclosures at pennies on the dollar.

   Either route you take, you do get savings from retail. But you need to be very careful when buying foreclosed deeds. You need to do your due diligence and make sure you go through a checklist before you bid on it. You need to know any tax liens, assessments, etc. I suggest you read up on some books before you do this type of investing. One of my favorite books that cover this topic is Complete Guide to Real Estate Tax Liens and Foreclosure Deeds: Learn in 7 Days by Don Sausa [isbn 0978834682]. There’s also online web sites that you can research: