The sales of foreclosed houses have increased again and the pressure has not decreased this year

The sales of foreclosed houses have increased again. This year the pressure has not decreased. A large number of foreclosed homes that were delayed last year due to the foreclosure document handling scandal have re-listed, resulting in the most...

A large number of foreclosures, which had been delayed last year due to the foreclosure document handling scandal, were once again put on the market, leading to a surge in foreclosure sales in the last quarter of 2011, with the proportion rising to nearly a quarter from one-fifth in the previous quarter. Experts predict that the pressure on the market from foreclosures will continue this year, but sales of distressed assets will shift from bank-owned assets (REO) to short sales and other "pre-foreclosure" methods.

According to the latest report from RealtyTrac, a total of 907,000 houses entered the foreclosure process or were repossessed by banks and were sold to third parties throughout 2011.

Real Estate Tracking CEO Brandon Moore said, "We expect foreclosure-related sales to increase in 2012, especially pre-foreclosure sales (pre-foreclosure sales) to grow faster as lenders actively deal with the (backlog of) distressed assets caused by the deadlock caused by mortgage servicers over the past 18 months."

Fannie Mae (Fannie Mae) and Freddie Mac (Freddie) A program piloted by Macau regulators to sell in bulk to investors, completing 2,500 foreclosure transactions, has already led to an influx of investors. Investor interest has picked up recently, with some real estate developers reporting bidding wars in parts of California and Nevada where bank delays have led to a drop in supply. Of course, the real estate market is not just about bidding wars for assets held by banks.

In the fourth quarter, Moore said, we continued to see more sales shift from bank-held properties to pre-foreclosure or short sales - where the owner sells for less than the mortgage balance with bank approval. Nationally, he said, pre-foreclosure sales are up 15% from a year ago and bank holdings (REOs) are down 12%. In seven barometer markets, including Los Angeles, Miami and Phoenix, pre-foreclosure sales have exceeded bank-held property sales, where bank-held property sales exceeded pre-foreclosure sales a year ago.

New improvement projects and government stimulus are boosting sales of such assets as banks see short sales being cheaper than foreclosures. While pre-foreclosure sales are rising across the country, the biggest increases are in states hardest hit by the housing collapse: Michigan up 103%, Georgia up 59% and Arizona up 48%.

The average price of former foreclosure homes in the fourth quarter of last year was 21% lower than normal sales. According to data from Real Estate Tracking, the average price at which banks repossess assets is 36% lower than the market price. However, the completion time for foreclosure sales is only half that of short-sale homes: short-sales take an average of 318 days to complete all procedures.

California, Florida, Arizona and Nevada accounted for more than half of all distressed property sales in 2011, but their numbers are declining, while sales are rising in states such as Georgia, Minnesota and Washington. In addition, there is a big difference between states where foreclosure requires court proceedings and states where a judge does not need to intervene. Even though banks have reached a $26 billion agreement with states and the federal government to resolve the robo-signing scandal in foreclosure documents, there is still a massive backlog of bank-owned homes in states such as New Jersey, where foreclosures require court proceedings. It takes an average of more than 900 days for New Jersey foreclosure transactions to complete.

Foreclosure sales look set to continue to increase in 2012 as banks are now expediting processing of 4 million mortgage defaults and 2 million homes in foreclosure proceedings. Although the government is offering new measures to modify loan conditions, many mortgages are no longer salvageable. As house prices continue to fall across the country, some borrowers' housing "negative equity" has fallen deeper, and the risk of default has increased. Although the national economy is slowly recovering and the job market is improving, economists say these are not enough to save large mortgages that are already in trouble.