Welcome to the DK Home Team
2011 WILL BE REMEMBERED AS THE YEAR OF FORECLOSURES, SHADOW INVENTORY, STRATEGIC DEFAULT, UNDERWATER LOANS, AND ROBO SIGNING
2011 WILL BE REMEMBERED AS THE YEAR OF FORECLOSURES, SHADOW INVENTORY, STRATEGIC DEFAULT, UNDERWATER LOANS, AND ROBO SIGNING
So what did we learn from all of this?
According to Joel Cone, the staff writer for Realty Trac’s Foreclosure News Report Borrowers learned how to use strategic default and walk away from their underwater loans instead of making payment.
Cone goes on to say that “armed with knowledge that the financial institutions are so far behind the eight ball playing catch-up with the delayed foreclosures, homeowners have no motivation to move on”
He also stated “there are documented cases now of homeowners who are simply staying in their homes without making a mortgage payment for as long as three years, figuring they can stay until the bank gets around to foreclosing on them. In the meantime, they are living rent-free”.
SO WHAT DOES 2012 LOOK LIKE?
We are seeing employment figures improve slightly so we will probably see less delinquent loans.
However, foreclosures will continue to rise as the banks push through the backlog of the Shadow Inventory that was previously stalled partially from the robo-signing.
Trulia said an increase in “foreclosures will depress prices for several reasons-foreclosed homes are often sold at a discount and used as comps for non-distressed homes”
“Agents should be gearing up with competitive pricing strategies to catch buyers and preparing to counsel their traditional seller-clients about the depressed prices to come in high-foreclosure areas,” Trulia said.
With many people losing their homes and the need to rent, they will find the rental market cost to rise in 2012.
Based on what we are hearing, this seems like the absolute best time for the first time home buyer to capitalize on low interest rates and low home prices.
For the long term investor there are great opportunities for rehabbing and renting these distressed homes to capitalize on the strong rental market and long term appreciation and positive cash flow potential.
2012 should be the year that will be remembered with the words: HOUSING RECOVERY BEGINS.
