You never want to find yourself surrounded by the word foreclosure. We know that it carries a negative connotation which can make the idea of home ownership a frightening and overwhelming concept. But what if I told you that this word could be seen in a positive light? I’m about to show you how the upswing in foreclosures could soon be a windfall to those looking to become prospective buyers in the world of real estate.
How it All Happened
The foreclosure process is expected to gain momentum over the next few months as a recent $26 billion dollar mortgage settlement has been completed by the nation’s five largest mortgage lenders. This move will provide stricter, but more easily plotted, guidelines for banks to follow when they are required to repossess homes.
These lenders, a list that includes Bank of America, JPMorgan Chase, Citibank, Wells Fargo and Ally Financial, have nearly stopped foreclosing on homes altogether since 2010. This was a direct result of the foreclosure scandal in which employees were allowed to sign off on thousands of foreclosure documents with little verification.
Borrowers who started off with a single delinquency sometimes took advantage of the system, becoming extremely delinquent on their loans, living in their homes for up to three years without making a single payment.Using Florida as a reference point, RealtyTrac found that the average foreclosure time was 861 days. New York on the other hand, was at 1,056 days, a number that closes in on that three year mark.They also estimate that the average time it takes to currently foreclose on a home — from the first missed payment to the final bank repossession – has stretched to 370 days, almost twice as long as it took five years ago.
Foreclosure’s Have Started to Increase
There are now indications that the pace of foreclosures has started to intensify, as filings have increased 10% in the 26 states where foreclosures must undergo court scrutiny. And as lenders have become more aggressive with removing people from their homes, some states are also taking a very liberal approach to foreclosures. Indiana and Florida, for example, boast filing figures up nearly 45% and 26%, respectively. This could just be the calm before the storm, as the resulting influx of open residences could bring home prices down even further, causing banks to clear out their foreclosure pipeline as quickly as possible.
Their Loss is Your Gain
The general idea is that with of all of the foreclosures, home prices will find their true value due to huge mark downs on overall price. Stan Humphries, of Zillow, predicts that it could happen as soon as the end of this year and that prices will bottom out by early 2013. So if you were even thinking of purchasing a home in 2012 or 2013, now is the time to get into this increasingly hot market.
Housing prices will be at record lows and lenders will need people to get into those empty houses, allowing you the opportunity to snag your dream home for much less than you ever imagined.
If there were ever a time to get in the housing market, this is it. If you’re a veteran and interested in using your VA loan to purchase a home, call Veterans United Home Loans at (855-524-7279) and see how they can help you start down the path toward home ownership.
Photo thanks to magandafille.
Veterans United Network is sponsored by Veterans United Home Loans.