A client the other day asked “how about a deal on foreclosures?”. The quantity of foreclosures, or distress sales in the system are at historic lows. Back during the recession 10 years ago, foreclosures and short sales were a combined 70% of the real estate sales transactions. Now they’re only a combined 3%. There will always be foreclosures, but today the interest rates are low, the economy is strong, equity in properties is back, and inventory of houses on the market low. That equates to a real estate market where an owner of real estate can either refinance, or sell their property without going through a distressed sale.
Financial institutions 10 years ago were highly motivated to cooperate with short sales, or modify loans, so they didn’t have the additional “non-performing” loans on their books. Agreeing to the short sales or loan mods wasn’t necessarily to help the borrower’s financial position, but to kick the can down the road for themselves. The institution’s books are in a much better position today to handle the foreclosure inventory, so they are much more aggressive in handling non-performing loans.
Most of the loan mods were temporary, are now adjusting to higher interest rates, and a large monthly repayment of principle, as the interest only loans are now amortized over a shorter period. Anybody that has a loan mod needs to be reviewing the terms, if they haven’t already been contacted by their existing loan servicing department.
If you are in the Los Angeles area, have any questions or real estate sales or financing needs, feel free in contacting me.
Ron Henderson GRI, RECS, CIAS
President/Broker
Multi Real Estate Services, Inc.
Gov’t Affairs Chair – California Association of Mortgage Professionals
BRE #00905793 NMLS #310358
www.mres.com
ronh@mres.com
Specialist in the Art of Real Estate Sales and Finance
Real Estate market, mortgage rates, Los Angeles, San Fernando Valley, Conejo Valley, Simi Valley, Woodland Hills, West Hills, Calabasas, Chatsworth
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