Tuesday, February 21, 2012

3 Predictions for Distressed Properties in 2012

Brain Summerfield, Realtor Magazine

"Its hard to know exactly what will happen with foreclosures, REOs, and short sales in the coming year. However, there are certain things regarding distressed properties that can be predicited with some level of assurance, " says Andy Firoved, CEO of CounselorDirect, a technology company that specializes in automating processes for various government foreclosure-prevention programs.

Firoved's clients include housing departments in states with the hightest unemployment and biggest declines in home values - the so-called "Hardest Hit." Here are three of his prognostications for 2012:

Prediction #1 - Government home owner assistance programs will get more effective.

They failed early on because of a combination of poor promotion of the programs and arcaen, overly bureaucratic processes. "However, the word is getting out now, and people are starting to get assistance, " Fivored says. "These programs are starting to find higher-level efficiences as well."

Prediction #2 - The nuber of evictions will stay the same or even go down.

While the number of evictions that have taken place over the past couple of years seems high compared with healtier economic times, they actually aren't as high as they could be. Why? For one thing, banks are hesitant to pursue foreclosures because of the robo-signing issue, which still hasn't been settled. Also, many banks simply don't have the will or the resources right now to evict all of those borrowers.

Prediction #3 - Banks will get creative in dealing with REOs and delinquent home owners.

According to Fivord, banks will accomplish this by working out special deals, such as leasing foreclosed and bank-owned homes to their former owners. They may even allow foreclosed-on and delinquent borrowers to continue living in homes without making any payments - at least in the short term - because they want properties mainteained for eventual resale.

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