There are several interesting trends emerging in national
foreclosure statistics.
While Foreclosure Activity was up 2% in the nation, several
areas have experienced more than their fair share of foreclosure activity and
bank repossessions. While the state of
Michigan may have gone through the worst of value depreciation, recent trends
indicate that the recent run-up in values may not be sustainable.
Some trends that lead us to these conclusions:
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According to RealtyTrac, foreclosure activity
was up in July 2013
-
Many properties have experienced value
increases, but many more are sitting on the marketplace unsold
-
Banks still hold a tremendous amount of
inventory that has yet to be released to the marketplace
-
All indications are that interest rates will
continue to rise, constraining values and limiting homeowners ability to
purchase
-
A large percentage of purchases in Michigan are
from investors, looking to buy rental properties or “flip” them at a profit
-
If a homeowner experienced hardship in the past,
they are unable to find the financing to help them purchase a new home or keep
their existing home.
Additionally, a recent report on Detroit Bank Foreclosures
indicates that the median price of a foreclosed home falls to $25,000. Why is the bank willing to take a lot less,
and the investor/homebuyer willing to pay a lot more?
An opportunity exists for the distressed homeowner to save
their property, reduce or eliminate their negative equity, and re-establish
their homeowner status.
Before you consider walking away from your home (through
whatever means that may be- Deed-In-Lieu, Short-Sale, Foreclosure, or
Abandonment), consider that there are resources for the homeowner to
potentially save their property (such as HomeLiberty) and if you roll-over for
the bank, you will be encouraging the type of behavior that has seen many
families lose their homes, their financial futures, and any potential gain
through value gains.
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