Distressed Properties Now Account for Two-Thirds of Home Sales

An ongoing flood of mortgage defaults and foreclosures is dramatically changing the home sale landscape in the U.S. According to preliminary results from a new nationwide survey of housing conditions sponsored by Inside Mortgage Finance, nearly two-thirds of all home sale transactions now involve some sort of distressed properties. This is way up from the just over 50 percent level found just four months ago.

The new research, based on a survey of more than 1,500 real estate agents conducted by Campbell Surveys, found that nearly half of the current home sale market involved real estate owned (REO). Of the REO being sold, more than half now consist of damaged homes in need of repair. The study also found that only about 14 percent of current home sales involve so-called short sales. This was actually down from a 19 percent level found earlier this year. For further information on the new study, contact John Campbell at (202) 363-2069 or john@campbellsurveys.com.

New Study Finds Lenders Could Save Money on REO Sales

Mortgage servicers could save a lot of money for themselves and investors if they better managed the sales of homes they acquire through foreclosures, according to a new study sponsored by Inside Mortgage Finance.

The study, based on a nationwide survey of real estate agents that focused on loss mitigation practices, indicates that servicers could significantly reduce losses on the sale of real estate owned (REO) if they: (a) negotiated lower sales commissions; (b) priced properties more realistically to reduce sales time; and (c) took specific steps to reduce damage to foreclosed properties before they are put up for sale.

The study found that REO sales now account for nearly 40 percent of all completed homes sale transactions nationwide. The survey of real estate agents was conducted in March by Campbell Communications and produced the first national rating of major loan servicers on their loss mitigation performance. Click here for more info.

One-Third of Pre-foreclosure and Short Sales Fail, New Study Finds

Despite an industry push to limit foreclosure losses via pre-foreclosure and short sales, one-third of these transactions on average fail, according to a new study sponsored by Inside Mortgage Finance.

The study, based on a nationwide survey of real estate agents that focused on loss mitigation practices, found that mortgage servicers on average take four and a half weeks to provide an answer on potential short sales. This compares with just 1.8 weeks to provide a  “yes” or  “no” on REO offers. Not surprisingly, the research found that efforts to do more short sales are being stymied by the fact that lenders can’t respond quick enough to close pending deals.

The survey of real estate agents was conducted in March by Campbell Communications and produced the first national rating of major loan servicers on their loss mitigation performance. Click here for more info.