Investors flock to US foreclosures

With US home prices at historic lows in many markets and rental rates on the rise, investors are increasingly buying foreclosed properties in distressed markets and converting them into rental properties. According to real estate data firm CoreLogic, the number of completed foreclosures for 2011 totaled 830,000, down from 1.1 million in 2010.  Since the start of the financial crisis in September 2008, there have been approximately 3.2 million completed foreclosures across the US.
Data from CoreLogic also shows that 1.4 million homes in the US (or 3.4% of all homes with a mortgage) were in the process of being foreclosed upon as of December 2011. Foreclosure inventory is measured against homes with an outstanding mortgage—not against all homes. In the US, approximately a third of homeowners own their homes free and clear.
The percent of US borrowers who were 90 days or more delinquent on their mortgage payments (classified as “seriously delinquent”) improved to 7.3% percent in December 2011 compared to 7.8% a year earlier.
“The inventory of foreclosed properties has begun to shrink, and the pace at which properties are entering foreclosure is slowing. While foreclosure filings are being curtailed by a variety of judicial and regulatory constraints, mortgage servicers are completing REO (foreclosed) sales faster than they are completing foreclosures,” said Mark Fleming, chief economist with CoreLogic. “This is the first time in a year that REO sales have outpaced completed foreclosures, and part of the reason for the decrease in the foreclosure inventory.”

Brazilians enjoy homeownership stimulus

Brazilian would-be homeowners are enjoying a month of opportunity and stimulus. In its 8th edition, Caixa Econômica Federal is holding Feirão “Housing in a Box” whereby the bank will offer more than 430,000 new and secondary market homes with easy credit and reduced interest rates.
The credit lines for Feirão cater to all ranges of family income, with payment of up to 30 years. Interest rates vary within the Housing Finance System (SFH) of 4.6% to 9% per year for all funding arrangements, including up to 100% of property value. Reduced rates are available to customers, regardless of their relationship with Caixa, although the reduction may be greater for those who choose to become clients.
According to the vice president for Government and Housing, Urban Joseph Duarte, “the great advantage of Feirão is the possibility of going through the process of acquiring the property in one place, where all actors in the chain of housing, such as builders, brokers, notaries and technicians are all together, responsible for analyzing and releasing the funds, which saves time and money for families.”
Flavio Prando, vice president of the Housing Union Secovi-SP, agrees and adds: “financing terms offered by Caixa are very attractive. Now, with greater reductions in interest rates, more families have access to mortgages.” Secovi-SP believes that this movement of cash to reduce the interest on the mortgage will stimulate healthy competition among private banks which will present new products. “It’s a virtuous cycle that occurred in mid-2005,” recalls Prando.
Feirão will be offered in 13 cities beginning early May; moving around the country until June 10. A schedule is available on the Fenanci news page. The last edition of Feirão recorded more than 450,000 visitors, with financial transactions exceeding $10 billion in deals signed and forwarded.
Submitted to