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Wiping out housing's zombies: Banks sell off foreclosed remnants of crash

Discussion in 'Real Estate & Other Investments' started by Scorpio, Sep 8, 2016.



  1. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    Wiping out housing's zombies: Banks sell off foreclosed remnants of crash
    9 / 17
    [​IMG]
    CNBC

    Diana Olick 4 hrs ago

    Halloween isn't here just yet, but the zombies are already multiplying by the thousand — zombie foreclosures.


    After having left the worst remnants of the housing crash in foreclosure limbo-land, banks are now taking those vacant, foreclosed homes and selling them at a fast clip. They are the so-called zombie foreclosures.

    The result is that the numbers have shifted. Vacant homes in the foreclosure process are expected to drop 9 percent in the third quarter from a year ago, but vacant bank-owned properties are expected to jump 67 percent during the period, according to ATTOM Data Solutions. There are now just over 46,600 vacant bank-owned properties (known as REOs) littering neighborhoods nationally.

    "We believe it's a combination of market conditions that are ideal for selling properties, along with political pressure for banks to deal with these properties and not allow them to linger in foreclosure indefinitely," said Daren Blomquist, senior vice president at ATTOM (formerly RealtyTrac).

    More low-priced homes would seem to be a windfall for a housing market plagued with extremely short supply, but that is not the case. The vast majority of these zombie foreclosures are in the least desirable markets for investors. New York, Philadelphia and Chicago have the highest number of vacant foreclosures, but they are in some of the most troubled areas economically. The homes are also in terrible disrepair.

    As a comparison, San Jose, California, one of the nation's most desirable housing markets, has a vacancy rate of just 0.2 percent, compared with Flint, Michigan, which has a rate of 7.1 percent. There are likely no zombies in San Jose because there is simply too much demand for anything with four walls. Other markets will have to wait.

    "Eventually there will be demand. Some investor will be interested in these properties given the environment we're in and also more interest in the urban infill type of developments," said Blomquist.

    But only with significant investment. There is plenty of demand from home flippers and landlords looking for great deals, but they get most of the good properties the courthouse auction.

    "We have seen more properties selling at the initial foreclosure auction. They don't become REOs," said Rick Sharga, executive vice president at Ten-X, a real estate auction platform. "We are also seeing more rapid movement to sell REOs if those courthouse auctions don't work."

    That means the homes that are left, the zombie foreclosures, must need thousands of dollars of work to make them either rentable or sellable. Government-backed mortgage entities like Fannie Mae and the FHA have strict lending requirements when it comes to distressed properties.

    "Imagine a zombie foreclosure that's been vacant two to three years somewhere in the Northeast now becoming a bank-owned property. That is not for a first-time homebuyer and maybe not even for an investor. These are not properties that are going to fix the inventory problem, at least not when they are first repossessed," added Sharga.


    Real estate agent Edward Augsberger has been working the Jersey shore over a decade, but only now is he trying to sell some of the worst properties he's ever seen.

    "It's crazy some of the numbers. I've sold some things in Atlantic City for $3,000," he said.

    The properties are scattered throughout neighborhoods all down the coast. After the housing crash and then major flooding from Hurricane Sandy, a lot of people just walked away. New Jersey's slow judicial process kept many of these homes in limbo for years, and they are just now coming to market.

    "What you see is a handful of investors waiting for the property to get to that sweet-spot number," said Augsberger. "Anything will sell if it's priced right."

    http://www.msn.com/en-us/money/real...losed-remnants-of-crash/ar-AAiESrZ?li=BBnbfcL
     
  2. Uglytruth

    Uglytruth Gold Member Gold Chaser

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    He forgot to say you have inside info & plan to be a section 8 slum lord for rapeugees, illegals and undocumented democrat voters.
     
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  3. Hystckndle

    Hystckndle Daguerreotype Fanatic Site Mgr Site Supporter ++

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    Only 46,600 nationaly bank owned.
    Hard to fathom a number that low.
    They must have slid a huge # off to their buddies in those
    roll up investment firms we posted about here a few years ago.
     
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  4. southfork

    southfork Mother Lode Found Mother Lode

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    I don't believe 46k its much higher, looking on realtor.com and zillow it amazing the number of short sales, foreclosures and bank owned properties there are
     
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  5. Goldhedge

    Goldhedge Modal Operator/Moderator Site Mgr Site Supporter

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    There were 60 million back in 2008 when the robo signing hit the news.

    Nobody went to jail for that either...
     
    Uglytruth, Hystckndle and Scorpio like this.
  6. nickndfl

    nickndfl Midas Member Midas Member Site Supporter ++

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    Down in Florida some hedge funds and a couple of Indians (7-11 type, not casino) bought up many foreclosures and rented them out. The people who lost their homes cannot qualify for a mortgage right now, so they must lease. The landlords are riding the market back up and they have a captured market where if they wanted to sell they could would lease-to-own options.

    I had contemplated buying additional homes and even knew some who are professional landlords. Before the bubble burst I rented out two homes which was a lot of work. Was not worth it because I was absentee and too busy. It can work for others if you can manage it full-time and don't mind headaches.

    I took a different route and bought up lots of vacant land in my area. Don't need insurance or worry about tenants. If anybody has $15k-$48k send me a pm. I can turn you onto a couple of vacant lots that are still for sale. I placed a similar post early in the year and one person talked to me, but didn't bite. He missed out on a great opportunity on two properties that sold quickly after and are up at least 30% in the last six months.
     

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