If you’ve been waiting for more lower-priced homes to hit the market, this just might be the opportunity you’ve been waiting for. Portland metro foreclosures were up in November, about 87% over the same time period in 2013! This surge in foreclosures reflects a “pent-up” demand by lenders to close their books on delinquent home owners and clear that inventory off their books.
Since 2012, we had seen a slow-down in bank repossessions. Prior to 2012, in the state of Oregon, banks were allowed to file notices of default if a buyer was as little as 30-90 days late on payments, and then they could proceed to foreclose as quickly as they deemed prudent. This led to the glut of bank owned properties that hit the market due to the recession of 2007. And of course, the result was a further depreciation in home valuations.
In order to slow the repossession process and to ensure that all foreclosures were in fact legal, our Oregon legislature got to work to protect home owners. All lenders were required to use the “judicial” foreclosure process, which gave home owners 180 days after a notice of default was filed to try work with their lenders to try to save their homes. This created a reprieve for home owners, but a logjam in the foreclosure process for lenders.
A few months ago, our legislature ruled that lenders had to at least offer a delinquent borrower the opportunity for a face to face meeting prior to taking a property back. Without that 180 day wait, lenders are now able to speed up the process and are clearing out the distressed property inventory that has been growing since 2012.
Washington County saw the highest number of properties in the foreclosure process in the metro area during November (142 homes), while Clark, Multnomah and Clackamas counties all saw those numbers drop. Throughout Oregon, there was a 90% increase in the number of homes in some stage of the foreclosure process during November, as compared to November 2013, with the Astoria and the Pendleton-Hermiston areas leading the way.
Realty-Trac predicts that increasing numbers of bank repossessions during late 2014 could be a forerunner of what is to come as we head into 2015.
According to FHFA (Fannie Mae) records, there are currently 1,336 properties in the state of Oregon that are bank owned. BUT, there are 5,330 home owners who are 90 days or more delinquent on their mortgages. This represents a disturbing 1.9% of all loans in the state that could be facing foreclosure in the coming months.
Bank owned properties typically are priced at or just below fair market value. Because our housing market is pretty healthy now, the only real bargain basement priced homes are those in need of serious repairs or those that have been on the market for an extended period of time. Still, if you are one of those people willing to take on even a moderate fixer, there are still opportunities out there. In most cases, even relatively minor upgrades will increase the value of the home more than the actual cost to make those improvements.