Lenders Change Strategies For Dealing With Foreclosures

Lenders have been flooded by foreclosures over the past five years. Foreclosure is usually the worst result for everybody concerned — the homeowner, the lender, the community.

So lenders are trying to achieve short sales and auction sales of distressed properties.

When you buy a foreclosure at an auction, you are usually expected to pay the full price in cash and you usually do not have a chance to fully inspect the property you are buying.

Amy Hoak reports: When a home buyer looking for a place to live considers a foreclosure, they’re usually looking at those listed as “REO” or “bank-owned,” meaning that the lender has taken back the property and is now putting it up for sale. But REO sales have been shrinking.

There are a couple of reasons.

First, more properties are selling at auction, typically the first opportunity the lender has to sell the property and where buyers are mostly investors. Buying a foreclosure at auction often requires full payment in cash, and the buyer often doesn’t get the chance to fully inspect the property before buying it–both turnoffs for a home buyer looking for a place to live.

“Anecdotally, we’re hearing from investors that the lenders are more aggressively pricing the opening bid at the auction to attract more bidders,” said Daren Blomquist, vice president of RealtyTrac, an online foreclosure marketplace. In a more typical market, the lender sets the opening bid at what they’re owed on the property, he said.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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