According to data released by RealtyTrac last week, total number
of foreclosed properties sold in the first quarter of 2012 was
233,299, up 8% from the prior quarter and almost at par with the
prior-year quarter. Out of this, 109,521 properties were at some
stage of foreclosure (up 16% from the prior quarter and 25% from
the year-ago quarter), while 123,778 were bank-owned (up 2%
sequentially but down 15% year over year).
Additionally, the sale of pre-foreclosed and bank-owned
residential properties was 26% of the total residential sale in the
first quarter, growing from 22% in the prior quarter and 25%
reported in the year-ago quarter. Moreover, properties that were in
the early stage of foreclosure were sold 306 days on average, after
being in foreclosure process. Properties owned by banks that were
sold had been repossessed about 178 days before sale.
Further, average selling price of properties was $161,214, down
1% from the fourth quarter of 2011 and 2% from the first quarter of
2011. Also, these properties were sold at a discount of 27% to the
average selling price of non-foreclosed properties. Moreover,
Nevada recorded the highest foreclosed property sales accounting
for 56% of all residential home sales, followed by California (47%)
and Georgia (46%).
The jump in foreclosed property sales was primarily driven by a
rise in short-sale, where the homeowner sells the property at a
lower amount than owned on his loan. Likewise, lenders also support
short-sales, which are quicker ways of getting back some amount
from their mortgages than waiting for foreclosures (a more
expensive and time-consuming process).
Though there was a drop in foreclosures in the first quarter,
upcoming months will surely witness a hike following the $25
billion settlement deal that took place between five mortgage
JPMorgan Chase & Co.
Bank of America Corporation
), Ally Financial Inc. and
Wells Fargo & Company
), 49 states' attorneys general and the regulators. The deal is
expected to speed up the rate of the foreclosure activities across
the nation, which was almost frozen till now.
Moreover, the settlement deal clearly describes the procedures
to be followed while foreclosing a property. This will allow the
mortgage servicers to step up the foreclosure activities.
However, it would take quite long to overcome the foreclosure
crisis. Also, there will be pressure on the home prices across the
nation as many properties are expected to come to the market due to
increased foreclosure activities. Though the huge surge in
foreclosures may dampen the housing prices in the near term, this
will enable the housing market to revive over the longer term.
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