More Foreclosures Predicted for 2012

January 19th, 2012 -- by Bill Ivey

As we embark on a new year, there is both good news and bad news on the foreclosure front.

The good news?

According to RealtyTrac’s Year-End 2011 U.S. Foreclosure Market Report™, total U.S. foreclosure activity and the foreclosure rate were both at their lowest annual level since 2007.

The bad news?

Foreclosure levels were artificially lowered due to delays following the robo-signing scandal. However, those delayed foreclosures will likely reappear in 2012.“There were strong signs in the second half of 2011 that lenders are finally beginning to push through some of the delayed foreclosures in select local markets. We expect that trend to continue this year, boosting foreclosure activity for 2012 higher than it was in 2011,” said Brandon Moore, chief executive officer of RealtyTrac.

Fortunately, both the financial and government sectors are more committed than ever to finding alternatives to foreclosure, including short sales. In fact, Bank of America expects a 60-70% increase in short sale closings this year.

Foreclosure in Memphis, Tennessee

This news can also be viewed positively or negatively depending on the individual. Let’s consider the homeowner/potential seller, the home buyer, and the investor.

1. The Homeowner/potential seller

The person is not going to be excited to hear that foreclosures are on the rise. Why? Because he knows that the sell-price (even it is a foreclosure) of homes in his neighborhood effect the market value of his home. Hence, the more homes in his neighborhood that sell undervalue, the more likely his home will depreciate in market value. If you are confused on the difference between market and appraisal values, check out a previous article we wrote. Want to learn more about the market value of your home?

2. The Homebuyer

This is great news for this person, because now he has the choice of many homes at lower prices to choose from. He will most likely be able to get more house for his dollar in 2012 than he would have in 2011.

3. The Investor

This is good news and bad news for the investor. More foreclosures definitely means more opportunity to purchase properties that can be rented. But investors should always consider the supply and demand of rental properties in the area in which they plan to invest. A great deal is only a great deal if you can find a tenant for the property. Want more information about investing in Real Estate. Contact Ryan Tucker.

For those who are facing foreclosure in 2012, consider a short sale instead and contact Bill Ivey today.

This post was written by

Bill Ivey – who has written 85 posts on Enterprise Realtors Blog.

Bill Ivey, Certified Distressed Property Expert Broker/Owner, Enterprise Companies (901/857-3888) If you know anyone who is behind or about to be behind on their mortgage and doesn't know what to do, please have them call me immediately! I can help them avoid foreclosure.

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