The “Not So” fun facts about Distressed Property
- According to the Mortgage Bankers Association, mortgage delinquencies are unchanged in the past year. 8.1% of all mortgages, of 4.2 million homes, are either seriously delinquent or in foreclosure.
- According to the National Association of Realtors there are approximately 3.5 million homes presently available for sale. Excluding the new homes that are typically listed each month, 3.5 million additional foreclosures could double this number.
- Government statistics show loan modification programs have been unsuccessful. Of the 1.5 million loan modifications started in 2009, only 670,000 have been completed under the Home Affordable Modification Program (HAMP).
- RealtyTrac Data shows it takes an average of 400 days to complete a foreclosure nationwide. This is twice as long as last year. New York and Florida lead the nation with the longest delays. New York is taking 800 days and Florida takes and average of 807 days to complete a foreclosure.
- LPS Analytics data shows 40% of borrowers who are 90 days or more delinquent have not made a payment in over a year, while over 33% have not made a payment in over 2 years.
- NAR statistics show distressed sales account for 37% of all sales. According to FAR, Florida is the poster child for distressed sales with a 24% increase from the fourth quarter of 2010 to the first quarter of 2011.
- NAR statistics show about 1/3 of all closings involve cash deals.
Given the present conditions with delinquencies and foreclosures, it may take years before the distressed property issues are resolved. It is possible that sellers who are waiting for better days could be wasting years of a better quality of life in the hopes that prices will recover. If so, that may not be working very well for them.