Realty Trac is a great data base to see the current market trends in your area. Essentially, for the last 45 months foreclosure properties have increased each month.
There are 5 catagories of properties in some type of distress
1. NOD - notice of default on mortgage payments - currently about 5,000,000 are listed as late.
2. LIS - Lis Pendents - a legal term that someone has filed a legal claim on the property - this can be due to a pending divorce, pending estate settlement
3. NTS - Notice of Trust Sale
4. NFS - Foreclsure - this property will be auctioned on the court house steps.
5. REO - Foreclosure sale did not produce buyer and the bank now owns the property.
The 1st foreclosure wave was due to the market not able to sustain the high property values and the sub prime and Alt A mortgage products - in other words, very lose lending practice.
Now, it is the economy - for every 6 - 10 jobs lost, 1 home is going into foreclosure.
In 2010 - the wave will be from - Strategic Defaults - which is when the loan amount is higher than the value of the property due to the loss of property value. What will drive this is the 3,000,000,000 Option Arms and Atl A loans resetting at a rate that is higher than the home owner can afford - and they cannot refinance because the value of their property is less than 125% of the balance of their mortgage.
The treasury department is working on a couple of loan producst - as Stream Lined Short Sale Loan - and the FHA is dusting off their re hab loan ...
Stay tuned - and if you have an OPTION ARM - or Any arm that is due to reset next year - and you are concerned about the rate - now is the time to refinance!
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