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Top 10 Foreclosure Rates
Q1 2010 - 1/everyX HU


3.Florida 57
4.California 62
5.Utah 88
6.Michigan 99
7.Georgia 101
8.Idaho 101
9.Illinois 115


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May 12-14, 2010:
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June 9-11, 2010:
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July 13-15, 2010:
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The Latest News from RealtyTrac


Banks Have REO Market Locked Up  
By Daren Blomquist


Jay Schurman concluded that “banks are not in the real estate business” after a marathon REO purchase in 2008 that started in January and ended in August.

“While it was frustrating to have to wait for the bank to list the property — we would have offered the same amount in February that we ended up buying the property for in August — it was worth the wait,” he said soon after the purchase.

Nearly two years later lenders are much savvier about selling bank-owned properties, and their newfound know-how is grounded in the basics of supply and demand, which are both heavily impacted by foreclosures in the 2010 marketplace. Sales of properties in some stage of foreclosure accounted for one-third of all sales in the first three months of the year, according to RealtyTrac.

Driving Demand
Lenders have become more willing to set REO asking prices well below peak market values, helping to ramp up demand from first-time homebuyers and investors.

“We’re seeing significant discounts — sometimes as much as 50 to 60 percent off the properties’ previous high value,” wrote Robert Friedman, chairman of auction company REDC, in an e-mail.

The lower pricing strategy and resulting ramp-up in demand is ultimately better for lenders’ bottom lines, helping them move properties quickly and mitigate their losses, according to Tom Driver, director of operations for Keystone Asset Management, a Lansdale, Pa., company that provides REO asset management services to lenders.

“The practice of testing the market and adjusting after 30 or 60 days is no longer employed as banks realize that overpricing their assets only leads to longer days on market and greater losses,” he wrote in an e-mail.

Short Supply
Aggressive pricing and an “artificial shortage” of bank-owned properties in Las Vegas have created a buying frenzy there not unlike what occurred in the boom market, albeit with prices as much as 70 percent below the peak, according to REO listing agent Bryan Pellican.

 “We’re getting multiple offers on almost all our listings. … Buyers have been offering above-list for the last two months, and cash offers,” Pellican said.

But Pellican sees the current market as a “false bottom” that lenders and government-sponsored foreclosure prevention programs are helping to create by delaying the influx of new REO properties on the market.

“I think what they’re doing is that they’re trying to regulate the flow,” he said. “Which I think is going to prolong how long it’s going to take to recover, but it might feel like less of an impact.”

And lenders are increasingly leasing REOs instead of listing them, according to Michelle Mangione, who with her husband owns a property management company called Blue Real Estate Services in coastal Orange County, Calif.. The company runs a Hold For Rent (HFR) program that evaluates, repairs, leases and manages REO properties for mortgage servicing companies and private investors.