The Foreclosure Report

"It's Easy To Walk Away"

The Dayton Daily News reports from Ohio. "More than 20 residential properties in the region are slated for the auction block in the coming weeks, as the nation's largest auction firm of foreclosed properties makes it's way to Dayton. Dallas-headquartered Hudson & Marshall's is planning an Ohio tour in early March, in which the company is slated to auction off 186 properties on behalf of several national lenders."

"The firm will be in Fairborn on March 6 to auction off local properties valued between $5,000 and $250,0000 located in Middletown, Dayton, Springboro and Fairborn."

"Benefits in the auction process exist for both prospective buyers and lenders, said Erica Brown of the National Auctioneers Association. Unlike trustee's and sheriff's sales, real estate auctions typically allow potential buyers to inspect properties beforehand."

"For the lenders, she added, the chances of landing a truer market value for the property is increased because of the competitive bidding process. Additionally, sellers can decline the final bid, if they choose."

"'With auctions, you also have a specific time and date in which the home is going to be sold, unlike the traditional selling of real estate where the home can be on the market for seven or eight months,' Brown said."

The Saginaw News from Michigan. "On Bewick, where the average state equalized value, SEV, of a home is $33,000, it's easy to assume anyone who can afford a house on Five Oaks can keep up with his or her mortgage. On Five Oaks, where the average SEV is $180,000, it's easy to assume a home on Bewick is a comparative cakewalk to pay off."

"Real estate listings tell a different story. Bewick and Five Oaks are small streets each with fewer than 35 homes. On both streets, three of those homes have gone into foreclosure, listings from RealtyTrac, indicate."

"The number of foreclosures in Saginaw County more than doubled last year, to 1,326 from 530 in 2005, RealtyTrac statistics indicate. Bewick and Five Oaks demonstrate that the high rate of foreclosures is a distinction not unique to the two contrasting residential neighborhoods."

"The consequences are more clear: blight, widespread displacement of families and a drag on a housing market that can't afford any more hits."

"Residents at risk of losing their homes for failing to pay property taxes crowded into the Saginaw County treasurer's office this month to try to negotiate a deadline extension. 'The room was completely full,' Treasurer Marvin Hare said."

"Carl E. Young still has his one-story on Bewick, barely. He rounded up payments on his 2004 taxes in the last few weeks, banking on a big income tax refund to cover part of a debt that quickly accumulates late fees."

"'By the time you get to pay it off, you're in trouble. If you owe $700, that's up to $1,000, and then every month it's another $20, $20, $20,' said Young. 'Then you're at $1,300. If you couldn't pay $700, how are you going to pay $1,300?'"

"Young's mother, Lonnie, wasn't so lucky. Her landlords lost the house where she lived next door to her son while she was in the hospital recovering from a stroke last month, Young said. When the family brought her home last week, they found a note from the bank giving her 10 days to move"

"The only good news was that she had plenty of empty houses to choose from, Young said. His sister found a 'miracle' rental on Nebraska with an option to buy, and the bank gave Lonnie Young a few extra weeks to move. 'Isn't that cool?' Young said. 'They were so nice.'"

"Young's worry now is the new liability next door. 'It's not gonna sell,' he said. He pointed to a home a few doors down, empty for the past two or three years. The original asking price of $42,000 was a laugh, he said. County property records show no house on Bewick selling for more than $28,000."

"'Any time a foreclosure exists within any given street, it's a negative influence on the remaining property owners,' said appraiser Ronald C. Reimers of Saginaw. 'The houses are normally already trashed. I have yet to see a foreclosure you could turn around and sell without doing more work on it. As that property remains vacant, generally it isn't maintained. The longer it sits, the more negative an impact it's going to have on surrounding houses and lower their value.'"

"The foreclosure spike likely comes out of a perfect storm of financial factors, said Rich Bernthal, mortgage loan originator with Citizens Bank in Saginaw. 'Some of these people went into these adjustable-type-rate loans that are now coming up for adjustment, and the adjusted rate is higher than original,' Bernthal said. 'The combination of two, if they have a job loss and an adjustable rate doubling their mortgage, that's just too much.'"

"The sudden increase might have to do with interest trends about five years ago that made adjustable-rate mortgages more attractive next to a standard, 30-year fixed-rate mortgage. 'Right now there's very little spread, but five to six years ago, there was a big spread,' Bernthal said."

"'It relates back to if a person doesn't have any bank account and is able to move into a house that has zero down payment, or where the seller will give the money to buy that house so it qualifies as a down payment,' Reimers said. 'If they have a problem, if they're suffering bad economic times, it's easy for them to walk away. If a person has no equity in a house, they can just get up and move to an area where they get a job and let the house go back to the bank.'"

posted by Ben Jones @ 11:40 AM