The main topic of discussion currently are short sales. Given that the Home Affordable Foreclosure Alternatives program, which is a government program focused on short sales, is about to begin. But, in the end, the real key to resolving the problems that yet remain in housing, is likely to come back to an old standby: REO property sales. Armed with the current real estate comps for your target areas you will be well prepared for the increase.
According to data from Lender Processing Services, 7.4 million loans are now non-current, compared to just 4.1 million on average in 2008.
For all loans more than 90 days in arrears, the average days delinquent is now at 272 days—up from 204 days in early 2008. For loans in foreclosure, the aging numbers are even more staggering: loans in this bucket average 410 days delinquent, up from 260 days delinquent in early 2008.
Ponder those numbers for just a second. On average, severely delinquent borrowers have gone more than 9 months without making a mortgage payment—and yet foreclosure has not yet started for them. For those borrowers who are in the foreclosure process, it’s been an average of 13.6 months—more than one full year—since they last made any payment on their mortgage.
How does this affect you as a real estate investor? Here is an opportunity to get short sales and possibly even some “subject to” deals. Keep your eyes open in your local market for these opportunities and see if you can snatch some of these up before they go to foreclosure. And have the ability to help your fellow Americans who are in dire straits in their homes.