Posts Tagged ‘brooklyn foreclosure’

Dos and Don’ts of Buying a Brooklyn Home in Foreclosure

Tuesday, May 25th, 2010

Whether you’re looking for an investment property or a home for your family, a foreclosure might be a good deal for you. However, buying a foreclosure is different from buying a home from a seller and requires different considerations.

Before you sign a contract, consider what you should and should not do when buying a Brooklyn home in foreclosure.

  • DO consider the cost of repairs. Foreclosures are sold “as is.” That means the bank will not make any repairs to the Brooklyn home in foreclosure before closing, so you will be responsible for them. For example, if the home needs a new roof, make sure you have enough money to pay for it.
  • DO get a home inspection. In a traditional home sale, the seller is required to tell you about any defects or problems they’ve had with the home. However, a bank does not have to supply a disclosure statement because they have not lived in the house and do not have any information about defects.  Make sure you hire a professional home inspector to check the structural integrity and condition of the home.
  • DO be prepared to wait. Buying a foreclosure usually takes longer than buying through a traditional sale. You will have to look through and sign stacks of paperwork. In some states, banks are required to go through the court system to sell a foreclosure which can take time.
  • DON’T buy a home just because the price is low. Banks like to sell their foreclosures as close to market value as possible. If the price is exceptionally low, there’s a reason why. Make sure you know it. Home repairs can easily add up, turning what you thought was a bargain into a money trap.
  • DON’T expect to flip the home for a quick profit. Despite what the get-rich-quick-buying-foreclosures crowd tells you, foreclosures don’t automatically mean you’re getting a steal, nor can you always quickly sell them. Buy a foreclosure because it’s an affordable home for you and your family, not as a way to build an overnight fortune.

When you take your time and do your homework, buying a Brooklyn home in foreclosure can be a great bargain.  I can help you find well-priced foreclosures.  Call me today at (718)253-9600 ext 206 or email me at [email protected].

Charles D’Alessandro

[email protected]
tel 718 253-9600
fax 718 253-9573

High Brooklyn Foreclosures Equals Great Deals

Sunday, February 28th, 2010

The extension of the homebuyer’s tax credit, as well as the expansion to include upgrade homebuyers, has a lot of people looking for their dream home. Many are looking for that dream home in the listings for Brooklyn foreclosures. Why?

The Law of Supply and Demand

Quick marketing lesson: every market is dependent on the law of supply and demand. When the demand for a product is higher than the supply, prices go up. When there’s more product than demand, prices go down.

This is what’s happening now, especially with Brooklyn foreclosures. Around the U.S., the supply of homes has doubled in the past two years, reaching as high as a ten-month supply. While Brooklyn homebuyers have been reluctant to buy a foreclosure in the past, people are starting to rethink the situation because:

  • Foreclosures are usually less expensive than traditional homes for sale.  In fact, some buyers have found their dream home and bought it for pennies on the dollar.
  • Foreclosed properties are generally in better condition that they used to be.  In the past, foreclosed homes had a higher than average amount of repairs needed compared to other homes for sale. This is no longer necessarily true. Many foreclosured homes have been lovingly taken care of by their previous owners.
  • Potential buyers of foreclosures have a wider variety from which to choose. They aren’t stuck with just one type of house in one Brooklyn neighborhood. For the careful new homebuyer, the possibilities really are almost endless.

Most foreclosed homes aren’t money pits. To protect yourself, make sure your real estate agent includes in the contract that you want to have the home inspected, and that if the home inspection finds major problems, you then have the right to walk away from the deal.

If you’re looking for a great home at a great price, I can help. Call me at Charles D’Alessandro of Fillmore Real Estate at (718)253-9600 ext 206 or email me at [email protected] for more information.

Will Mortgage Servicers Become the Country’s Landlords?

Thursday, December 31st, 2009

Will Mortgage Servicers Become the Country’s Landlords?

Foreclosures have skyrocketed over the past two years and even more are predicted in the coming year. Not only are massive foreclosures tragic for the individual families losing their homes, but they are also responsible for major lender losses, resulting in the current mortgage credit crunch. They have caused dramatically dropping house prices, and increased crime and problems for neighborhoods where foreclosures are rampant. Banks, consumer advocate groups, and the government have been searching for ways to stem the tide of these destructive defaults.

Enter the Deeds For Lease (D4L) program from government-controlled mortgage financier Fannie Mae. With this initiative, Fannie Mae would essentially become the landlord for seriously struggling homeowners. It is designed to “minimize family displacement, deterioration of neighborhoods caused by vandalism and theft to vacant homes, and the effect these have on families, communities and home price stabilization.” Here’s how it works:

A homeowner with a Fannie Mae-backed mortgage facing foreclosure must contact their servicer to see if they qualify. If the homeowner does not qualify for any other home loan

help, like mortgage modification or a short sale, then he/she may be eligible for the program. These homeowners must also be able to afford rent at the current market price. At that point the borrower turns over the home’s deed to the bank, the bank forgives the loan, and the borrower is allowed to rent the same home back from the bank for up to 12 months. During that time the renter will be expected to figure out other living arrangements so that the bank can then sell off the house.

Will other banks follow suit in order to stop losing money on foreclosures? Not likely, according to a recent online Time article. It quoted Cheryl Lang, CEO of Integrated Mortgage Solutions, as saying the main problem lies in the legality of the program. “Once a lender takes possession, if there’s a mold issue or Chinese drywall, whatever the problem is with that house, whether or not the lender is aware of it, that’s a liability.”

Many of the nation’s largest lenders, including Citigroup and JPMorgan Chase, have meager interest in converting homes into rentals. “We’re in the lending business,” says Chase spokesman Tom Kelly. “We’re not really equipped to be landlords.” Lenders are sitting on nearly half a million repossessed houses nationwide, but getting rid of them quickly, even if that means taking a hit on price, seems to be the preferred response. A recent presentation by the head of Chase’s retail-financial-services division showed that the company’s servicing portfolio went from having about 52,000 repossessed homes in September 2008 to only some 30,000 in September 2009. Over that period, the average price at which the firm sold houses from that stock dropped from $175,000 to $150,000.

Now, none of that means rent-backs won’t eventually take off. There are plenty of examples in recent past of housing policies starting at the federal housing agencies and later expanding industry-wide thanks to strong-arming from some combination of the Obama administration and Congress. Loan modifications are the quintessential example. Perhaps one more relevant bit here is the law that was passed earlier this year requiring banks that repossess houses to honor the terms of existing leases (i.e. to not immediately kick out any existing renters). Fannie Mae already had such a policy in place. Over the summer, an Assistant Secretary of the Treasury Department told a Senate panel that the administration was considering rent-backs, but the idea hasn’t gained traction since then.

After all, the big administration push has been loan modifications. Earlier this week, Treasury reported that through October more than 650,000 homeowners have received trial modifications under the government’s “Making Home Affordable” plan. How long lasting that help will be, though, is a different question. As of Sept. 1, only 1,711 borrowers had successfully completed the trial phase and received permanent changes to their loan terms, according to a report by the Congressional Oversight Panel.

If loan modifications aren’t the long-term success the administration is banking on, people will wind up losing their homes to foreclosure anyway, and the number of repossessed properties owned by banks will again rise. According to foreclosure tracker RealtyTrac, the number of foreclosure notices nationwide has been ticking down the past three months, but the number of notices is still running about 19 percent higher than last year. Considering high unemployment and how many people still owe more on their mortgages than their houses are worth, there might be a chance yet for attention to turn to the idea of renting houses back to former owners.

Why Would Lenders Hold Back Brooklyn Foreclosures?

Monday, December 21st, 2009

It’s in the news and has been for several months now; financial institutions may be holding back their inventory of Brooklyn foreclosures and national foreclosures.  Why on earth would they do that?

For those of you who are wondering what would cause lenders to hold back on listing Brooklyn foreclosures, here’s a little information that might enlighten:

  • April 2009, the San Francisco Chronicle published a news article about the state of foreclosed homes. In the article, Rick Sharga, vice president of RealtyTrac said, “We believe there are in the neighborhood of 600,000 properties nationwide that banks have repossessed but not put on the market.” With an already glutted market, imagine what would happen to real estate if those 600,000 foreclosed properties flooded the market further.
  • October 2009, CNN stated in an article, “Despite concerted government-led and lender-supported efforts to prevent foreclosures, the number of filings hit a record high in the third quarter, according to a report issued Thursday.” According to the report, one in every 136 homes – a staggering 937,840 homes – were in foreclosure.
  • Financial institutions know that the foreclosures could cause a severe drop in the average price of housing. Should prices fall farther, faster, lenders would not be able to recoup their losses.
  • Some may be holding a few properties back for a “rainy day” – for when the prices start to rise again.

Even though lending institutions are holding back on some of their inventory of Brooklyn foreclosures, there are still some great deals to be found.

If you’d like to find a great deal on a foreclosed home in Brooklyn, I can help. Call me now at 718 253-9600 or email me at [email protected] for more information.

Charles D’Alessandro
Fillmore Real Estate
tel 718 253-9600
fax 718 253-9573
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