Foreclosures Drop in November

‘Tis the season for cheer and care. Mortgage Goliaths Fannie Mae and Freddie Mac got into the spirit and issued an eviction moratorium, giving a break to homeowners missing their payments during the holiday season. There’s relief elsewhere, too.

Foreclosure filings dropped 14 percent in November, compared to a year ago. A total of 224,394 homes were served default, auction or repossession notices , according to RealtyTrac Inc. That number translates to one in every 579 U.S. homes receiving a filing, compared to one in every 563 the previous month. Bloomberg reported that the U.S. housing market has to take care of 14 million distressed homes, where owners owe more to their lenders than their homes are worth, before the foreclosure crisis dissipates. So, the decreased numbers are hardly any consolation.

“The python took a break – the pig is still in there,”  RealtyTrac Chief Executive Officer James J. Saccacio told Bloomberg. “I expect 2012 to look similar to 2011 in volume if nothing changes with government intervention or regulations.”

Nevada led the country with the highest foreclosure rate for the 59th straight month. One in every 175 Nevada housing units had a foreclosure filing in November, more than three times the national average, according to consumeraffairs.com.

Is Owning a Home Still the American Dream?

There are deals galore and the interest rates look the most enticing ever. So, should you take the plunge and invest in what could be the most precious purchase of your lifetime?

May be not, says Joseph Lazzaro, a columnist with the International Business Times. Owning a home should no longer be equated with the American dream, he says. Until a few years ago, the economy here was thriving with real, median incomes and home prices rising. Not anymore.

“Housing does not appear to be that slam-dunk, no-doubt-about-it, appreciating asset that it was for decades – basically since the end of World War II in 1945 to the start of the Great Recession in 2007,” Lazzaro said. Of course, if you’ve found that dream house with the unbeatable price, nothing should deter you from buying it. Here are a few things to keep in mind, said Lazzaro, for those who haven’t yet found that dream home.

• Buy small: Now’s not the time to splurge on mansions. “Buy the minimum house you need,” Lazzaro said.

• Study the local economy: Do your research and buy in an area where the local economy has growth potential. That would ensure that your home value doesn’t plunge.

• You don’t need the best house in the neighborhood. Buy something that’s in the mid range. “A sub-par neighborhood can decrease the value of your pricey home,” Lazzaro said.

• Factor in commuting costs. There are no guarantees that oil prices won’t skyrocket. Find a home near work, so that even if a gallon of gas costs you $6, you won’t feel the pain. Better still, find a place close to a mass transit stop.

• Explore employment opportunities: Check for job availability in a different field in case of a catastrophe such as layoff at work. In a global world, economic conditions can change in a heartbeat, so make sure the area you are moving into has opportunities for an alternate career.

• Lastly, be diligent before making that purchase of your life.

Home Flipping Caused Housing Boom and Bust: Federal Report

According a new federal report, real estate investors played a huge role in the housing bubble and its bust afterward, which left states to deal with a huge inventory of foreclosed properties. The Associated Press said that researchers with the Federal Reserve Bank of New York found that investors who used low-down payment, and subprime credit to purchase multiple homes helped inflate prices and are largely to blame for the recession. The report said that in 2006 more than a third of the mortgages awarded went to people who were already homeowners. In states such as Arizona, California and Florida – which suffered the worst in the housing crisis – investors made up nearly half of mortgage borrowers, the AP said.

“This may have allowed the bubble to inflate further, which caused millions of owner-occupants to pay more if they wanted to buy a home for their family,” the researchers noted. As the investors defaulted on their mortgages, they triggered a spiraling of home values across the nation. Of course, there’s no point playing the blame game now. Hopefully, we will learn from history and steer clear from making the same mistakes. The focus should now be on turning things around.

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