Foreclosures Blog – Foreclosure Listings Nationwide

Sales of existing homes and properties on lists of bank foreclosures surged by 14.5 percent in South Hampton Roads in Virginia. Data released showed that investors and first-time home buyers have showed interest again on the housing market, driving up home sales in the area.

The data indicated that in May, 963 existing homes and properties on lists of bank foreclosures were sold, an increase of 14.5 percent compared with April figures, but 3.6 percent lower than the total sales in May of last year.

Meanwhile the year-to-date sales drop by nearly 15 percent in the area, while the median home sale price was $219,900 in May, representing an increase of 2.3 percent from the previous month’s $215,000, but showing a 2.3 percent decline from a year earlier figures of $225,000.

The median home price is the middle point wherein half of the prices are lower and the other half higher.

According to industry experts, summer and spring months are usually the strongest in sales of existing homes and properties on lists of bank foreclosures.

Some first-time homebuyers said that they waited for their credit ratings to inch up so that they could avail of good deals and best interest rates. They pointed out that the collapse of the housing market provided them a chance to purchase a property.

Coldwell Banker Professional Realtors managing partner and chief executive officer Dorcas Helfant-Browning said that first-time homebuyers helped boost the local real estate market. She added that people who thought that they could not afford a house are the ones taking advantage of the government’s low interest rates and tax credit.

Helfant-Browning is referring to the federal tax credit of $8,000 made available to first-time homebuyers. Additionally, she said that many properties sold in previous months were mostly vacant, either because owners have moved out but could not sell immediately or the property has been placed on lists of bank foreclosures.

On the other hand, a strong presence of investors has been noted on the local real estate market. Helfant-Browning said that these investors are hoping to turn distressed properties into rental units.

The strongest area in South Hampton Roads in terms of sales is Virginia Beach, with 430 last month. All in all, homes on lists of bank foreclosures accounted for nearly 19 percent of the total sales last month.

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The wave of foreclosure in South Florida continues to gain momentum as two more prominent residential projects are facing the possibility of being added on REO property listings.

Lenders have filed foreclosure actions against residential projects: a Delray Beach condominium and marina development and Country Lake at Palm Beach rental complex.

A $17.8 million foreclosure action has been filed on the Delray Beach Yacht Club project while Country Lake was slapped with a $19.5 million lawsuit.

The Yacht Club is a limited liability partnership spearheaded by real estate and development firm David Hocker and Associates. The partnership paid about $25 million for the three-acre project site in January 2006. The project was approved to have condominiums and a 46-boat dockage.

The acquisition of the project site was funded by Orion Bank through a loan of almost $18.75 that was taken out in August 2007. The maturity date of the loan was extended three times by Orion Bank in an effort to avoid placing the project on REO property listings. After the loan reached its November 2008 due the bank granted another extension.

CB Richard Ellis multifamily broker Robert Given said that the project ran out of time to resolve the mortgage problem. He added that the residential project is worth less than 50 percent of its purchase price in 2006.

Meanwhile, the Atherton-Newport-managed fund owns the Country Lake property. Atherton manages funds supported by investors and entered the real estate business through the apartment market three years ago. It acquired several multifamily properties across the United States before it filed a Chapter 11 bankruptcy protection in California in 2008.

According to Joseph A. Eisenberg, Atherton’s bankruptcy lawyer, the fund management firm is negotiating with a potential equity investor to purchase the Country Lake property to protect it from REO property listings.

Majority of properties under Atherton’s portfolio are owned by limited-liability companies not party in any bankruptcy action filed by the parent company. And lenders are pursuing theses properties to be placed on REO property listings.

The foreclosure action against Country Lake was filed by PA Country Lake which acquired the loan for the Palm Beach property from NRFC WA Holdings Inc..

Atherton acquired the Country Lake apartment project, which is now facing the possibility of being added on REO property listings, for $86,000 per unit for a total of $16.5 million.

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• Inclusion of Base Project on Bank Foreclosure List Sought
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• Foreclosed Home Inventories Hinder Housing Market Recovery
• Repo Homes Listings Growth in Southern California

As foreclosure listings grew in many housing markets nationwide in June, the Wells Fargo/National Association of Home Builders HMI or Housing Market Index fell to 15, a difference of one point from last month. The index, whose maximum level is 100 points, reached its highest peak in December 1998 when it reached 78 and had its lowest level in January, when it had only 8 points.

From April to May, the index was in an upward direction, prompting some home builders to express optimistic forecasts. The slight dip doused the optimism.

Joe Snider, an executive of Moody’s Investors service, said the home building industry is crawling along low points as foreclosure listings continue to win the competition in terms of home prices.

The problems of the home building industry were reflected in their stock results on Monday. Standard Pacific shares fell by almost 11 percent to $2.13 and Hovnanian Enterprises shares fell by 6.3 percent to $2.39. KB Home shares dropped by 5.8 percent to $13.27 while Lennar Corp. shares fell by 5.3 percent to $7.56.

Meanwhile, the Dow Jones US Home Construction Index fell by 2.19 percent recently.

Investors in the home building industry had hoped that the sector was on its way to recovery, but the dip in the NAHB housing index is dousing hopes.

The situation is expected to worsen because mortgage rates have been climbing. Data from Freddie Mac showed that 30-year fixed rate home loans had been getting a rate of 5.59 percent last week, which was overwhelmingly higher than the 4.86 percent average rate four weeks earlier.

Also, the $8,000 federal tax credit, which has been enticing first-time home buyers to purchase their homes, is nearing its expiration date. The $10,000 assistance for first-time home buyers in California is also reported to be nearing exhaustion. Home builders are concerned that when these factors are absent, more potential home buyers will defer their home buying decisions.

However, the main factor clobbering sales of new homes is the low pricing of homes in foreclosure listings. Snider explained that foreclosure listings are lowering appraisal values, forcing home builders to sell new homes at a losing price or cancel the sale.

According to a June survey, more than 300 home building executives from over 2000 companies said their new home sales remained at low levels and that home prices continued to decline mainly because of low prices in foreclosure listings.

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• Realtors: Existing Home Sales to Pick Up by Mid-2008

A rising number of homeowners are complaining that they cannot refinance their homes to prevent them from becoming foreclosure homes because appraisers have been making extremely low home valuations.

The houses of a growing number of small businesses operators across California have been appearing in foreclosed home search results as more and more of them are losing their businesses and houses to the recession.

Investors are snapping up foreclosed home list properties in Stockton as prices continue to decline to levels unseen in California in nearly 4 decades.

The city of New York is planning to convert unsold apartments and condominiums on repo list into affordable houses for its residents. As luxury developers struggle to fill empty units on condominium buildings or obtain financing to continue construction on stalled projects, many empty condominiums languish on the market, further depressing market values.

A lawsuit has been filed seeking the inclusion of Noisette Company’s old navy base redevelopment project in Charleston, South Carolina on bank foreclosure list.

Short sales represent a way out for distressed homeowners who want to avoid putting their properties on repo homes listings. In short sales, homeowners will sell the house at less than the total amount of mortgage they owed.

Foreclosure listing prices and non-foreclosure house prices in Dallas are nearly 32 percent below normal values, according to home price studies by Massachusetts-based real property research firm IHS Global Insight.