Foreclosure
Foreclosure heat map
Foreclosure has become a dirty word recently, and sadly, it is going to get even dirtier as the financial crisis continues to ravage the real estate markets in the USA and across Europe. Some markets are immune of course; it is unlikely that the up-market areas of Washington D.C. or along the Cote D’Azur will see the amount of foreclosures and repossessions taking place in the lower end of the markets and some areas represent substantial opportunities for cash buyers, or those with financing in place.
Finding foreclosures to invest in has actually became a tricky proposition because the banking system is not properly admitting the scope of the problem, and in order to maintain an apparently healthy balance sheet, it is necessary to hold on to many foreclosed homes in order to artificially keep prices inflated and claim higher values than would be achieved should all this inventory come on to the market at the same time.
This problem is by no means exclusive to the United States, as witnessed by the recent (November 2010) bailouts of both Greece and Ireland in the Euro zone. Whether Spain and Portugal follow in these footsteps is hard to predict, but is a very real possibility which may see severe pressure on the Euro, but we will be discussing the situation as it applies in the US in this article.
What is foreclosure?
Put simply, a foreclosure is the act of a lender taking possession of a property that some one owes money on, and which the property was used as a guarantee. Usually this is because the borrower has defaulted on one or more payments, and the lender decides to take the property and sell it in order to recoup the money lent. The process varies from state to state, and from country to country and if you are facing foreclosure, it is best to get local advice and information. In the UK for example, foreclosure is rarely seen as the process in that country does not allow the borrower to reclaim any excess equity in the property, so a house repossession is done instead.
Foreclosure consequences
In the United States, the consequences of being foreclosed upon have long-reaching implications, and – although the banks have beens seen to be extremely unfair in their handling of the so-called- “financial crisis,” they are all-but untouchable as far as this process goes and local state legislatures are bending over backwards to favor the banks legally. Soon – in certain states – a bank will not have to even prove it owns the mortgage before foreclosing on a home.
Foreclosed Home For Sale in the United States
There is an estimated twenty two million bank owned properties in the USA at time of writing this, and no matter how one looks at it – this is substantial inventory. 2010 was a record year for foreclosure filings and 2011 is shaping up to be more of the same. Despite a drop in filings in December as banks were forced to actually follow the law in some states, almost 3 million filings were made in 2010. Individual states – pressured by state banks are hastily rewriting laws.
Bankproperties.com was established as a venue for disposal of these properties and to offer potential investors access to detailed foreclosure listings around the world. In the United States, much of this inventory is owned – directly or indirectly – by the United States Government Inc.
Whether through HUD or some other quasi-government institution, bailed-out banks, or direct government auctions, the government is the place to look for stock and financing. Our own opinion on the subject is that it would be healthier for all concerned if these properties were returned to the private domain as soon as possible.
Foreclosure Drive
Finding foreclosures
There are numerous foreclosure listing sites, some of whom are bona fide, but many are simply looking to charge you to see information that is already in the public domain. Our own foreclosure listings are always free of charge, and here is a list of other possible places to find foreclosures.
Resources and references
Photo “foreclosure drive” courtesy: Center for responsible lending
Photo “Foreclosure heat map” courtesy: RealtyTrac