When you see a short sale or foreclosure, do you think a bargain is coming your way? My advice: slow down and see who owns the note on the property. If the foreclosure is a Fannie Mae owned property, be patient. If it is a short sale and Fannie Mae holds the lien, you should seriously question submitting an offer. You could wait months and then be asked to pay market value or higher. Don’t expect logic or common sense to found anywhere in the transaction.
Headlines quick to report foreclosure activity rises in 21 states
News of this activity seemed to cast doubt on a housing recovery, and gives hope to buyers who have been watching the market for great deals that have seemed to evaporate in the last 12 months. One article even said it was the 2012 tidal wave of foreclosures. The trap that many fall into is not understanding the underlying cause as why this is happening in these specific states. Some states have been impacted harder than others; Florida, California, Arizona, Georgia, and Nevada, to name a few. However, the increase in foreclosure activity in this case can be better traced to the foreclosure process employed by a state. The above graph shows the pending foreclosures for Maricopa county. No tsunami or tidal wave on the horizon for Arizona. Read on to find out why.
It is very common to associate a foreclosure with a bank, and this idea is reinforced when we see advertisements for “bank owned” properties. Mistakenly, we also believe banks are taking the biggest financial hit when a house is sold as a foreclosure. However, the fact is that in many cases a foreclosure is not owned by a bank. If not the bank, then who owns these distressed properties and takes the financial loss? Continue reading “Who really loses on a foreclosure – the bank? Think Again!”