Foreclosures Continue to Flood Market
The U.S. housing market is being flooded with foreclosed homes held by trusts managing pools of securitized mortgages. The trusts sold six times as many properties as banks during the six months ending March 31.
The average property sold for 69 percent of the original loan amount, according to data compiled primarily in the Atlanta area by Data Intelligence Corp., a real-estate analytics firm.The dump isn’t over yet with thousands of properties still awaiting sale.
"While the banks are trying frantically to get loans off their books, they face the problem of large shadow inventories of housing being dumped on the market, which would depress prices further," says Anthony Sanders, real-estate finance professor at George Mason University in Fairfax, Va.Karen Weaver, global head of securitization research at Deutsche Bank AG, says the steepest losses involve subprime mortgages in which lenders generally are recovering just 26 percent of the original loan amount.
From a home shopper’s standpoint, there are bargains galore in many areas. Tim Hamill, an associate with RE/MAX Greater Atlanta, who is handling sales for an asset-management firm on behalf of a trust, says his mandate is to do what it takes to sell in 30 days.
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