Foreclosures at Deep Discounts
Last August, Deland, of St. Cloud, Fla., finally nabbed her dream home — a bank-owned foreclosure with three bedrooms, two baths and five acres of land for her horse — for an easy-to-take $111,900. But her closing was delayed in October after the seller, Fannie Mae, temporarily put all of its foreclosure properties on hold.
Deland patiently waited out the scare. By late November, as all 50 state attorneys general continued their investigation of so-called robo-signers and the process used to repossess many homes, Fannie Mae — as well as Freddie Mac. Ally Financial, Bank of America and JPMorgan Chase — lifted the freeze. Deland’s contract was extended to December 30, and she lined up an appraisal, a home inspection and homeowners insurance. Now she is back on track to close on her new home. “To me, it’s been worth it,” she says. “This is what I’ve been wanting for over a year.”
Before the robo-signers and the missing documentation of foreclosure-gate came to light last fall, bank-owned properties sold for an average discount of nearly 41% off the price of “normal” homes for sale. The discount could get even more attractive if spooked buyers stay out of the market. That spells opportunity for buyers prepared to do their homework and abide by the sellers’ rules.
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