Yesterday’s blog post regarding non arms length home sales in Tallahasseedistressed properties in the Tallahassee housing market. We saw that the ratio of arms length home sales to non arms length home sales continues to grow, thus creating concern that the shadow inventory of homes in Tallahassee is also growing. With this in mind, I started digging around the recorded home sales with the hopes of finding something that might be useful in gauging this growth. highlighted some serious concerns about the growth of
Finding Ways To Track Distressed Property Levels
The first thing I thought about is worthy of today’s entire blog post. I figured that we should take a look at the trend of people who are giving their homes back to the lender. There is a legal way to do this and it is called surrendering the deed in lieu of foreclosure.
For homeowners who cannot keep up with the monthly payments on a mortgage and wish to stop the foreclosure process, they can consider just signing their deed over to the bank “in lieu” of being foreclosed upon. At a minimum, it reduces expenses to the bank in the form of attorney fees and court fees that might ultimately be added to the deficiency that the homeowner will face.
Deed In Lieu of Foreclosure On The Rise
Unfortunately, the real estate graph below shows that the number of Deed in Lieu of Foreclosures is on the rise in the Tallahassee housing market. Historically, Tallahassee has seen about 1 in every 400 home sales being a Deed in Lieu, but currently we are seeing five times that number (1 in 78) and the trend is rising.