Good news to our real estate markets and the overall economy, foreclosures fall to the lowest level since 2007. According to Realty Trac default notices and bank repossessions were down 33% from the prior year. Over the past 5 years over 4 million homes have been lost to foreclosure.
Our local real estate market has suffered our bumps and bruises but comparing to other areas we definitely held our own. Prices have declined 20-50% locally depending on the area.
Some government programs have helped soften the foreclosure landslide. HAMP and HARP have started over 5 million mortgage modifications since 2009. These programs have helped home owners stay in their homes by adjusting the mortgage terms.
Short sales are adding to the number of notice of defaults but not to the foreclosure amounts. When a homeowner stops making payments the notice of default is filed. The notice of default is the start of the foreclosure process for the bank.
Banks are realizing that it is in their best interest to do a short sale versus a fore closure. The fees for a bank can reach well over $50,000 just to get the property back and ready to be sold.
Hopefully we can get through most of the distressed properties this year and continue to stabilize the real estate market. We will have growth and appreciation once we clean up all the distressed properties.