Golden Nuggets of Opportunities in Foreclosures

Foreclosure is a real estate term that has been heard more often over the past year and a half due to the current recession. Unfortunately one person's misfortune, can be another person's gain, but for consumers that are looking to buy a home for 50 to 60 percent below their peak values, can find golden nuggets of opportunities in foreclosed and distressed properties. Via a CNN article there was a foreclosure auction at the Jacob Javits Convention Center in New York City this past Sunday that drew around 2,000 potential buyers looking to find great bargains in the 375 foreclosed properties that were available for bidding. This shows me that consumers have finally acknowledged that there are great deals in the market and they are being proactive in the homebuying process. As more people attend these auctions, inventories in foreclosures will decrease, which will reduce the banks non-performing assets and will create more liquidity for these banks so they can start lending again. Staten Island has already started to see a recovery in the foreclosure market and I am confident that coupled with Obama's foreclosure plan we will see further reductions in foreclosures. Check out the video below highlighting a family's dream to buying a desirably priced home at the foreclosure auction in NYC.

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Paul Bishop's Truth behind the World Savings Bank Fiasco

We all know that the reason we are in this economic recession is primarily due to the abundance of bad loans that were issued by banks. Below is a 60 Minutes story of a mortgage salesman named Paul Bishop who discusses the demise of World Savings and the reason why Wachovia inherited billions of dollars in debt when they acquired this bank. This is a very interesting video and now I know why Wachovia was another victim of the sub prime mortgage market.

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All This Money and No One To Give It To

Photo by nomadic homemaker on Flickr.

Apparently what's wrong with the real estate market today is not so much the unwillingness of banks to loan money, but rather people's unwillingness to ask for it. There are billions of dollars that the FHA is trying to loan home buyer's, but people still aren't biting. With mortgage rates as low as they are, even if you can't afford a 20% down payment and have to pay PMI, the net payment is virtually equivalent to the 6%+ 30 year fixed rates of only a few months ago. And if you can afford the 20% down payment, most people are too scared to jump into the housing market and would rather sit on their cash rather than live in it.

Either way, you can't argue that home prices around the country are at their lowest levels in the past few years, with some case by case exceptions. If you are in the market, now is the time to kick it into high gear and start to seriously look. We are sitting on 5% 30 year fixed rates with no points today and those numbers are looking like they will come down even further. We have record low mortgage rates. We have record levels of housing inventory. We have record levels of foreclosures and bank owned properties and we still don't have people buying. It's amazing that the FHA is having such a tough time finding a home for all that money. - By special guest blogger Adam Steinhandler

Home Buyers Can Easily Find Money for Mortgages or Refinancing [KnowledgePlex]

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