New Bank of America Program Could Mean Fewer Foreclosures
All signs continue to point to higher foreclosure numbers during the year as the recent settlement 5 of the major banks reached with the government truly frees them up with a clean slate and the freedom to push delinquent loans through the system. Unique ideas keep coming and this week Bank of America started testing a new program where they will allow delinquent homeowners to do a deed in lieu of foreclosure and let them rent back the homes at market rate. Actually sounds like a great program but we will see how the banks enjoy being landlords. Initially Florida is not included in the program but certainly something to keep an eye on.
The chart above shows you the six-month trend of foreclosures in Palm Beach County which accurately reflects the trend over the past 180 days. After hitting a multi-year weekly low during the week of February 6th, foreclosure numbers have now increased for the 5th time in 6 weeks and this week we hit a nine week high. A total of 232 properties were foreclosed upon which was ahead of the 212 we had last week. With that number we jump well ahead of the 6 month average of 211 per week but still far below the 338 units we saw foreclosed on during the same week in 2011.
Investors who know how to play the auction game and are able to minimize risk with quick research have been doing very well lately as far as a percentage of auctions that go their way. This week those numbers dropped to 12.5% which is still a historically high number but the lowest weekly success rate we have seen in 4 weeks.
The new Bank of America test program could have a significant impact on the real estate market moving forward as if they are successful no doubt other banks will follow their lead and on the surface keeping people in their homes even if they no longer own them makes good sense, They may even then package those loans as performing assets and sell them to investors. Very interesting concept.
The south Florida market remains crazy busy on many segments, interest rates leveled off this week after last week’s jump and finding homes for clients remains difficult.