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How To Buy Bank-Owned Homes In A Period Of Rising Inventory

By
Mortgage and Lending with Company 12345

Foreclosures concentrate on 4 statesForeclosure filings rose close to 20 percent nationwide last month versus February, according to foreclosure-tracking firm RealtyTrac.com, and for the 13th straight month, total filings topped 300,000.

In addition to that wacky number, bank repossessions reached an all-time, quarterly record as well. Through the first three months of 2010, banks reclaimed more than 257,000 homes.

Nonetheless, 4 states dominated foreclosure activity nationwide.

California, Florida, Arizona and Georgia accounted for more than half of all bank repossessions AND together, the 4 states represent just 23 percent of the overall U.S. population. Talk about an un-even distribution.

The RealtyTrac report revealed some other interesting statistics, too.

  • Foreclosure activity was up in 40 out of 50 states last month
  • Bank repossessions rose 9 percent versus the same quarter last year
  • For the 13th straight quarter, Nevada topped the state foreclosure rate

Regardless of where you’re buying, foreclosures and REO’s are making a huge impact on the resale market right now.

About 1 in every 3 homes are distressed.

There’s excellent value in foreclosures out there if you know where to look, but keep these points in mind:

  1. Buying bank-owned homes can take 120 days to close or more. Be flexible.
  2. Foreclosures aren’t always listed for sale publicly. Some inventory is privately-held.
  3. Bank-owned homes are often sold “as is”. There may be defects that render the homes mortgage-ineligible. Get with a loan officer than understands the FHA 203(k) loan.

The REO market can be different from the traditional “existing home” market so if you’re interested in buying an REO, be sure to talk with an experienced real estate agent first, and then get with a great loan officer to find out your options.

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Tommy (NMLS #220122) is an active loan officer with AmCap Mortgage specializing in FHA loans. You can also find him on Google+ and Twitter. Over the past 10 years, he's provided home buying strategies and advice to thousands of homeowners. He's kinda like the Chuck Norris of FHA loans.

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Comments(2)

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Steve, Joel & Steve A. Chain
Chain Real Estate Investments & Mortgage, Steve & Joel Chain - Cottonwood, CA

Tommy,

So many reports seem to be like blind-men-judging-an-elephant-by-it's-feet.   Perhaps I don't know all the facts here. Foreclosures appear to me like going from selling short to selling shorter. lol

Steve

Apr 15, 2010 01:23 AM
T Chumba
Company - Arctic Bay, NU
Your dog

Hint - Investors, go to Cali, Florida, Georgia, and Arizona and buy properties.

This is good for the economy because it will add another reason to buy homes after the tax-credit goes away.

Apr 15, 2010 01:31 AM