Louisville Properties Blog
Louisville Properties Blog

Foreclosures

Foreclosures Rates Down Slightly But Remain a Persistent Problem Across the Country

Figures provided by the Mortgage Banker's Association suggest that mortgage delinquency rates declined a bit in the third quarter of 2010, but warn that the coming winter will show little improvement for homeowners struggling to make house payments. The Association reports that foreclosures "declined last quarter amid hints of improvement in the job market, but headwinds from defaults and a rising rate of new foreclosure applications keep the housing outlook muddied." Real estate website Zillow.com's foreclosure figures differed from the Mortgage Banker's Association. They reported that foreclosures have reached a new peak in the U.S. since 1.17 in every 1,000 homes either are in the foreclosure process or perilously close. They report that high negative equity rates, which increased in the third quarter from 22.5 to 23.2 percent, will continue to drive foreclosures and "will be weighing on housing demand for the next few years." Zillow's Real Estate Market Reports publication had additional bad news for the nation's housing market. They said, "Home value depreciation began to accelerate again in September, fueled by lower transactional volumes and increased inventory levels. Home values dropped 0.4% from August to September and 4.3% from September 2009. With home values 25% below their peak and 51 consecutive months of declines, the length and severity of the current downturn is fast approaching the length and depth of the Depression-era housing declines. From the end of 1928 to the end of 1933 (60 months), nominal home values fell 25.9% according to Robert Shiller's reconstruction of long-term home price appreciation in the United States." While the Louisville real estate market has been somewhat insulated from the worst of the foreclosure crisis, it is not immune. If you're thinking of investing in foreclosed or non-foreclosed Louisville real estate as your primary residence...

How Foreclosures Affect Home Prices

There is plenty of evidence here in the Louisville real estate market and elsewhere that foreclosures have a negative effect on home prices, but researchers at Harvard and MIT wanted to know precisely how much. They analyzed years of home sales data in Massachusetts and found that foreclosed homes sell for an average of 27 percent less than homes that have mortgages in good standing or are owned outright. They also looked at how a foreclosure affects the selling prices of nearby homes and found that a non-foreclosed home takes a one percent hit in selling price for each foreclosure within 250 feet. The higher the number of foreclosed homes on a block, the higher the negative, cumulative effects on sale prices of homes on the market. Daniel Hartley, an economist with the Federal Reserve Bank of Cleveland, recently used the Harvard and MIT study in a study of his own on how foreclosures affect neighborhoods. He calls foreclosures "disamenities' and notes that other factors shape the effect of foreclosures. He said: "In neighborhoods with low vacancy rates (tight markets), foreclosures lower the prices of nearby single-family houses by way of the supply effect. I estimate that housing prices within 250 feet of a foreclosure are lowered by about 1.6 percent per foreclosure through the supply effect, while the disamenity effect is about zero. In contrast, in neighborhoods with high vacancy rates ("looser" markets), foreclosures lower prices of nearby single-family houses by way of the disamenity effect. I estimate that housing prices within 250 feet of a foreclosure are lowered by about two percent per foreclosure through the disamenity effect, while the supply effect is about zero." We have stated many times that, while not immune to the effects of foreclosures, the Louisville real estate market has been spared the worst of the problems that are affecting many other housing markets across...

Foreclosure Oversights Could Be "Epidemic" in Mortgage Banking Industry

Recent announcements from Bank of America, JPMorgan and some other mortgage lenders about a stop to foreclosures until they had investigated "oversights" in the foreclosure process suggest that these problems are more serious and widespread than we initially thought. In a deposition she gave last February, one Bank of America official admitted that she signed 7,000 to 8,000 foreclosure documents per month and typically did not read them. "I typically don't read them because of the volume that we sign," she said. She also admitted that she had identified herself as a representative of Bank of New York Mellon, a company that did not employ her. At the center of the issue is the fact that hundreds of thousands, perhaps millions, of foreclosure documents have been signed without the required investigations to ensure that the lender is within their right to foreclose. One attorney representing someone who may be dealing with an unlawful foreclosure said, "We have had thousands, maybe hundreds of thousands of foreclosures around the country by entities that did not have the right to foreclose." Consumer advocates say that the foreclosure oversight problems are not limited to Bank of America, JPMorgan and a few other lenders that have halted foreclosures recently. "The general level of sloppiness is pervasive around the industry," said Diane Thompson, Counsel at the National Consumer Law Center. If these and other lenders are found to have "rubber-stamped" foreclosure documents without reading them or vetting their contents, foreclosures on homes that are currently pending and those that have already occurred could be rendered invalid or illegal. If this occurs, the nation's foreclosure crisis could continue for a very long time. Buying foreclosures may not look like an attractive investment now, but if you're shopping for Louisville real estate, you're in the right place! We have the area's best selection of residential and commercial real estate. Browse the listings on our site, and...

Bank of America Stops Home Foreclosures in Kentucky, Indiana and Other States

Bank of America announced recently that it is delaying foreclosures on homes in Kentucky, Indiana and 21 other states. The country's largest bank reported that it is halting foreclosures to review whether it rushed the foreclosure process on thousands of homes without reading the documentation for each foreclosure. Other mortgage lenders, including Ally Financial Inc.'s GMAC Mortgage unit and JPMorgan Chase, have recently admitted that their employees may also have signed foreclosure documents without properly vetting the information on them. The companies admitted the oversights after the lapses were made public. These revelations could result in serious headaches for the mortgage lenders. Thousands of homeowners currently in the foreclosure process or those who have lost their homes to foreclosure could contest the validity of the foreclosure, potentially leaving properties in limbo until each case is sorted out. If other mortgage lenders admit the same oversights, it could extend the current foreclosure crisis sweeping the country for years. Some states are getting involved by preventing lenders from foreclosing on mortgages in default. Connecticut Attorney General Richard Blumenthal recently requested that a state court freeze all home foreclosures in the state for 60 days. He said the freeze "should stop a foreclosure steamroller based on defective documents." California Attorney General Jerry Brown told JPMorgan to suspend foreclosures until it could prove that it has complied with a state consumer protection law. Attorneys General in Florida and Ohio have similar investigations underway looking into foreclosure oversights. This development could have far reaching consequences for the millions of homes across the country that have been foreclosed on or are in the process of foreclosure. Fortunately, there are plenty of Louisville homes for sale that are not affected by foreclosure. For the area's best selection of Louisville homes for sale, contact Louisville Properties today...

More Louisville Real Estate Short Sales for Banks and Borrowers

One Louisville couple figured that the two-story colonial house they bought on Bashford Manor Lane in 2003 would be their residence for the rest of their lives. Now, one refers to the former dream home as "the albatross that hangs around my neck." One of them has a job offer in New York, but they are finding that if they sell their Louisville home, they'll get at most about $15,000 to $30,000 less than what they owe on the mortgage. Like other Louisville couples, they are thinking seriously about a "short sale" of their home, which is a fairly new concept inside and outside the Louisville real estate market. In a short sale, a mortgage lender agrees to accept less than the borrower owes on the home loan and to forgive the difference in price. From the lender's perspective, it can be an attractive option. They can occasionally receive more money in the short sale of a home than they would if they foreclosed on the property and sold it. By short selling, they can also avoid legal fees and the costs of maintaining a vacant Louisville home. From the struggling homeowner's perspective, short sales are attractive because they are less stressful and confrontational than a foreclosure and their credit rating doesn't take the beating from a foreclosure. In a short sale approval, the lender must agree in advance to take a loss, and bankers are understandably reluctant to lose money on their investments. Short sales create unique opportunities for savvy Louisville real estate buyers. If you're thinking about buying a Louisville home, call 502.744.9504 or browse the real estate listings on this site for the area's best selection of Louisville homes for sale. ...

Obama Administration Aims to Provide Foreclosure Prevention for Struggling Homeowners

The Obama administration has launched a new set of initiatives to help struggling homeowners keep their homes and avoid bankruptcy. If successful, more homeowners would be able to stay in their homes, property values would stabilize and the country's deepening foreclosure crisis would bottom out. The administration's first efforts, launched last year, lowered interest rates in order to reduce monthly payments, but did little to address the fact that moderately lower monthly payments offer little assistance for borrowers who have lost their jobs. Critics also said that the Obama administration's initial efforts offered little or nothing for homeowners who are underwater on their mortgages and lack the ability or inclination to keep paying mortgages that exceed the plummeting value of their homes. In addition, critics stated that participation in the original plan was mostly voluntary with some incentives offered to lenders to join, but lenders were not compelled to work with homeowners. The new plan includes the following:
  • Assistance for borrowers who are underwater and/or unemployed
  • If the borrower has no job, participating lenders will be required to help in some cases
  • Borrowers who are receiving unemployment benefits will have their payments lowered to no more than 31 percent of their income, and lenders will be required to participate
  • Any unpaid amounts will be added to the loan's principal and will be repaid later
  • Other measures
If you're struggling to find the right Louisville homes for sale or Louisville real estate agent, call Louisville Properties today at 502.744.9504. No one has a better selection of residential and commercial Louisville real estate, and if you're selling your home in the Louisville area, money-saving flat-fee brokerage services are offered. To speak with an experienced Louisville real estate agent, call 502.744.9504 today. Resource Link: ...

Some Homeowners Struggle with the Reality of Repeated Home Foreclosures

The loss of one's home to foreclosure can be devastating, and millions of Americans are intimately familiar with this kind of financial and emotional trauma. A Southern California couple is facing their third foreclosure in the past year. The couple, who lost two homes to foreclosure in March 2010, has been forced to declare bankruptcy, and is fighting to stay in their current home. The nation's foreclosure crisis has hit the Los Angeles metropolitan area especially hard as improper lending practices made it easy for people to take on mortgages that they couldn't afford. Other metro areas hit hard by foreclosures in the last couple of years include the Phoenix and Las Vegas housing markets. Once a rarity, multiple foreclosures have become much more common as people with easy access to credit bought multiple homes when property values showed no signs of slowing down. Lax lending standards allowed lots of people to get into the real estate investing business, and when the music stopped, they were left upside-down on homes that they bought for hundreds of thousands of dollars. The couple struggling to keep their only remaining home says that they would not have had the foreclosures or the bankruptcy had their health and the economy not taken a turn for the worse. Bad luck, a workplace accident for him, a pedestrian accident for her and a souring economy created a lethal financial tsunami for the couple, and their future is far from certain. This couple's situation is far from unique. Many couples, single parents and singles are fighting to keep up with their mortgage payments. If you're looking for a smaller, more financially manageable home for sale in Louisville or the surrounding area, contact a Louisville realtor at Louisville Properties today by calling 502.744.9504. Resource Link: http://www.latimes.com/business/custom/yourmoney/la-fi-cover-foreclose21-2010mar21,0,3077981.story?page=2...

Louisville Foreclosed Homes Up for Auction are Great Deals

Foreclosed homes in Louisville that have been sitting vacant and tough to sell are selling unexpectedly well at local real estate auctions. Online real estate auction company, Auction.com, held an auction at the Seelbach Hotel recently that brought out a wide range of people interested in buying Louisville foreclosed homes. "They bid on the property and if they win the property we put them in contract today and within 30-45 days, they close on the property. It's really that simple," said Bob Michealis, vice-president for online auctions for Auction.com/REDC. The Auction.com's low starting bids on their website upset some potential bidders who felt they had been misled. Examples of the low starting bids included $129,000 for a $400,000 home or $500 for a $102,000 home. "It's very misleading and it's a sales tactic," said one man who has bid in countless auctions. He said that he works as a consultant for private investors who buy properties like the ones up for bid Monday. "You can't get houses for $500 or $1000." The company said that even though some homes advertised on the site had very low starting bids, a buyer's reserve on each property was not advertised for each Louisville foreclosed home. Buyer's reserves are the lowest dollar amount that the banks that own the foreclosed homes would accept. If a bidder does not meet the buyer's reserve on a given foreclosed home, the banks can choose whether to accept the bid. One frequent foreclosed home auction attendee cautioned other potential buyers to come prepared to the auction. He said, "Just do your homework and you will find a bargain." He said that when people buy Louisville foreclosed houses at auction, they often forget that a buyer's premium of around five percent is often added to the purchase price. If you need assistance buying or selling Louisville Real Estate, please contact Louisville Properties for professional assistance at 502.744.9504....

Purchasing Foreclosure Property

Home foreclosures have received a lot of coverage in the media for the last 18 months. The number of people losing their homes has skyrocketed as the economy has flagged. People who bought their homes at the top of the market are so upside-down on their loans that many are simply walking away from them. The situation has communities and states scrambling to deal with the steadily increasing amount of vacant foreclosed homes. However, foreclosures can be a real bargain for home buyers if they exercise some caution. Many homes in foreclosure were owned by people with little or no equity in the home, and that is a huge disadvantage to buyers as the lender will try to recover as much of their investment as possible. Another "buyers beware" note is that most foreclosed homes sell "as is." In some cases, the previous home owner bitterly vandalizes or sabotages the house and necessary repairs to make the home livable may eat up the attractive 30 percent price reduction. When considering the purchase of a foreclosed home, you should also think about the financial considerations that may have nothing to do with the home itself. Depending on whether your buy the foreclosure at an auction, a pre-foreclosure sale by the owner or through a real estate company, if a lender cannot inspect the home first, they probably will not be willing to issue a mortgage for it. Prospective buyers should also be diligent about having a title search performed on a foreclosure they are interested in buying. If the home went into foreclosure, it's possible that the former homeowner used the house as collateral and there could be liens against the home that will be uncovered during a title search. When considering the purchase of a foreclosed home, let the buyer beware. If you are interested in buying a foreclosure or other Louisville Real Estate, please contact Louisville Properties at 502-744-9504....

Louisville Judges and Politicians Launch Foreclosure Prevention Program

An article published in Business First of Louisville discusses a progressive and innovative project to prevent more homes from foreclosure in and around the Louisville area. The report claims that Jefferson Circuit Court Judges, Louisville Metro Mayor Jerry Abramson and U.S. Rep. John Yarmuth joined together to launch what they are calling the Foreclosure Conciliation Project. The program is designed to encourage mortgage lenders to explore alternatives to foreclosure that will help more Louisville-area residents to keep their homes. Louisville area judges have agreed not to require the sale of a foreclosed home before the homeowners have a chance to meet with the lenders. Not only will the program help homeowners remain in their homes, fewer foreclosed homes will also help Louisville neighborhoods by reducing vacant houses that are frequently targets of vandalism. Homeowners who get involved with the Foreclosure Conciliation Project will learn about options that they can pursue to keep their home such as forbearance agreements, loan modifications and other alternatives to foreclosure. In a press release issued by Louisville Mayor Abramson, he said, "Having a clear plan to follow will make this process less traumatic and more educational for homeowners." In 2008, 3264 Jefferson County home foreclosures were filed that led to 2408 homes being sold at foreclosure sales. This year is looking even grimmer for foreclosures, and experts claim that if current trends continue, foreclosure filing will near 5,000 before the end of 2009. Chief Judge Jim Shake said in the press release, "A foreclosure sale displaces families, disrupts neighborhoods and drains wealth from our community. If we can use our resources to encourage communication, offer alternatives and prevent significant losses to families and neighborhoods, then we as a community have a responsibility to do that." Anyone interested in investing in ...

Home Foreclosures Hitting Louisville Especially Hard

An article on home foreclosures that recently appeared on WLKY.com cites a Louisville Courier-Journal report that claims there are more than 6,000 vacant homes in and around the city. The vast majority of these homes are foreclosures. The abandoned properties have become neighborhood eyesores, and city leaders are growing concerned about the hazards that these homes present. In early June 2009, Louisville hosted a national conference that focused on home foreclosures and some Louisville residents said that the conference is long overdue. Prentice Hawkins, a home craftsman who restores old, dilapidated homes, said, "A lot of them I wish I could purchase. I really do because I like doing this kind of work. I hate to see houses in the neighborhood like that going from a nice house to a boarded up house. It really brings the neighborhood down." A large concentration of Louisville's foreclosed homes is in the city's upper west side. The Director of the National Vacant Property Campaign, Jennifer Leonard, claims that Louisville's foreclosure problems are not unique. "What's happened over the last couple of years with the foreclosure economic crisis, though, is that cities all across the country large and small, rural, suburban, really strong market cities, and mid-market cities are having increasing problems with vacant properties and abandonment," she said. She also said that it is in Louisville's best interests to take strong, proactive measures to reduce the amount of foreclosures throughout the city. Foreclosed homes adversely affect entire communities through neglect, increased rodent populations, lower property values and many other undesirable attributes. Often, foreclosed properties sit vacant for many years and then they become a burden on taxpayers, as the city frequently has to pay for razing the home and removing the hazard. If you need  more information on how to avoid foreclosure, visit the governement's...

Foreclosures Continuing to Rise across the Country

The number of homeowners delinquent on their mortgage payments and the number of home foreclosures rose to record levels in the first quarter of this year. Interest rates on home loans climbed as the government's efforts to contain falling home prices appeared to lose momentum. The foreclosure report on Bloomberg.com claims that the delinquency rate climbed from 7.88 percent to a seasonally-adjusted 9.12 percent, and the number of home loans entering foreclosure rose to 1.37 percent. The Mortgage Bankers Association said that the 1.37 percent jump represented the largest increase in history and that the 9.12 percent jump in foreclosures was also an all-time record since they began tracking in 1972. The housing decline—now in its third year with no sign of a turnaround—has thus far resisted government efforts to reverse or stabilize foreclosure and delinquency rates. In a sign that job losses across the country are fueling a new wave of foreclosures, prime fixed-rate mortgages to the most creditworthy borrowers accounted for the single largest share of new home foreclosures at 29 percent. Jay Brinkman, the MBA's chief economist, said in a recent interview, "If people don't have a paycheck they can't support a mortgage. The longer the recession lasts, the more people run through their savings reserves, leading to higher delinquencies and higher foreclosures." Right now, one in every eight American homeowner is either late on a house payment or their home is already in foreclosure as the economy continues to shed jobs and people fall behind. The MBA claims that around half of the latest wave of foreclosures is in four states: Nevada, Florida, California and Arizona. If you're thinking about buying a foreclosed Louisville home as an investment or primary residence, visit LouisvilleProperties.com for the area's most extensive Louisville real estate listings and foreclosures...
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