Foreclosures jump 57 percent in last 12 months

Foreclosures haven’t yet peaked despite a dramatic 57 percent increase in filings and a 129 percent increase in bank repossessions between March 2007 and March 2008, according to a report issued Tuesday by RealtyTrac. Nevada, California and Florida, respectively, experienced the highest level of foreclosure activity for March 2008, the report said.

For my Readers:

• One of every 538 single-family households in the U.S. experienced some form of foreclosure filing during March, the report said. RealtyTrac officials predict record foreclosure activity in the third or fourth quarter of 2008 as subprime ARMs adjust upward.
• In most states, foreclosure occurs in three phases: a Notice of Default is filed after payments are missed, a notice of scheduled auction is filed if steps aren’t taken to remedy the default, and an REO filing occurs when the lender repossesses the property after failure to sell it at auction.
• Nevada, California and Florida experienced the highest foreclosure rates. In California, one in every 204 homes was subject to a foreclosure filing in March for a total of 64,711 properties. March filings were up almost 21 percent from February and approximately 106 percent from a year ago March.

Median price of SoCal homes plunged 24 pct to 4-year low

Southern California home prices fell 24 percent in March, almost a four-year low, according to DataQuick Information Services. March’s six-county regional median price was $385,000, down sharply from March 2007, when the median was at $505,000. The last time the regional median price was that low was in April 2004, when it was $380,000.

For my Readers:

• Foreclosures are driving price declines. Riverside/San Bernardino was most affected. Fifty-six percent of homes sold in Riverside County in March were foreclosures, which caused the area’s median price to drop 27 percent to $306,250. San Bernardino’s median price fell 28 percent to $265,000.


• Orange County continues to be the most expensive market in the region at $506,000, which was 20 percent below last year’s median price for March.

Best Places to Get Foreclosure Deals

In markets where housing appears to be stabilizing, buying a foreclosure could be a very good deal.

Forbes magazine has analyzed the country’s 100 largest metro areas and then differentiated among inexpensive foreclosure markets and those that were undervalued.

For instance, there are plenty of homes going for practically nothing in Detroit, but the chances of recouping your investment are made more difficult because of the city's economic challenges. On the other hand in a city like Raleigh, N.C., where the local economy is booming, searching for and buying a discounted foreclosed property could be a very good deal.

Forbes identified the healthiest economies and then looked at the spread between median prices and foreclosure prices, with data supplied by RealtyTrac, to determine where banks and sellers were offering the largest discounts on foreclosed properties.

Here are the top 10 cities where the magazine believes the best bargains can be found:

1. Charlotte, N.C.
2. Raleigh, N.C.
3. Nashville, Tenn.
4. Oklahoma City, Okla.
5. San Antonio, Texas
6. Albuquerque, N.M.
7. Knoxville, Tenn.
8. Seattle, Wash.
9. Indianapolis, Ind.
10. Washington, DC-Arlington-Alexandria, Va.

Source: Forbes, Matt Woolsey and Jon Bruner (03/19/08)

Foreclosed Properties at a Bargain

Now’s the time to pick up properties at fire sale prices, says Ralph R. Roberts, author of Foreclosure Investing for Dummies and Flipping Houses for Dummies.

"Properties could double in value over the next 10 years. But you have to be willing to go in, buy them, and hang on for the longer term," he advises.

Roberts, owner of Ralph Roberts Realty in suburban Detroit, who says he has bought and sold more than 2,000 foreclosed properties in his career, says profitable investing in foreclosures requires exhaustive records searches in advance.

Roberts recommends that buyers of foreclosures create a file that contains a range of property information that will establish what the property is worth and help avoid bureaucratic snafus.

Here is his list of must-have information:

• A copy of the foreclosure notice, or notice of default.
• Title commitment and a 24-month history in the chain of title or the last two recorded documents.
• Deed with the current home owners' names.
  Last recorded first mortgage, so you know how much the current home owners owe.
• Documentation of all liens against the property, including property tax liens.
  Map showing the location of the property.
• Exterior home inspection (with photos and videos), plus neighborhood photos.
• City worksheet on the property showing all repairs, inspection reports, and other information.
• MLS data showing how much comparable homes are selling for in the area.
• Tax bills.
• SEV (standard equalized value) of the property, on which property taxes are based.
• Any notes documenting conversations with neighbors.

Good Luck Investing!