Foreclosure Home Sales are Rising!

Foreclosure home sales are rising. Over 52,000 American homes went on the foreclosure auction block in August, an increase from the year earlier. Even that it was only a small rise; it has many worried if it is the beginning of a coming trend.

Does it mean a return of the mortgage meltdown or is it just a slowdown of the strong real estate sales activity of the last few months. Additionally, many lenders might be cleaning the back logs of foreclosures before the close of the 3^rd Qtr reporting period.

With the great robo signing mess, many lenders were sued and the litigation has now been cleared from the courts and the homes can be sold. Many states have now created new laws to prevent that from ever happening again but they do have the inventory now.

One state, New Jersey has over 80,000 Foreclosures on the books and many are many months behind on payments and still not received a sheriff’s sale notice. That’s not the only place where mortgage servicers have had to adjust their procedures to make sure they stay within legal guidelines. It’s common in foreclosure states such as Florida, where home loan mortgage defaults have to go through the courts.

We will just have to watch the next few months to see if the trend continues. In the meantime, it offers prospective homebuyers a great opportunity to buy a new home at good prices. Get a pre-approved home loan before you go bidding as you will find the auction may not allow you to bid on foreclosure property if you don’t have an approval letter. You might also consider using a FHA home loan to purchase the foreclosure home but get approved before you go.

The home loan team at Mortgage Consumer.