Tag Archives: property value

CFPB Goes Hunting for Zombie Foreclosures

From 2006 to today, 10 million homes have fallen into foreclosure.   Of those homes, more than 2 million remain in foreclosure.  An estimated 152,000 homes are zombie foreclosures.   That's 22% of the 676,000 homes that are owned by banks but are not listed for sale.

Zombie foreclosures can cost already struggling borrowers thousands of dollars.

(Joseph Mikkelson, OnlineEd) Zombies have been enjoying a renaissance as of late. Ever since George Romero’s 1968 film, “Night of the Living Dead,” zombies have maintained a steady presence in the media. However, one doesn’t have to look far to see that their popularity has risen to new heights in recent years. Zombies are represented in the theater, on TV, in adventure 5K races, and now in . . . real estate?

With the flood of foreclosed homes in 2008, many banks found that many low-value properties simply weren’t worth the cost to repair the home, and opted not to complete the foreclosure. Zombie foreclosures are properties that have had foreclosure proceedings initiated and have been vacated by the owners, but have not yet been reclaimed by banks. The owner of the foreclosed home may have been long gone, only to find out years later that he or she technically still owns the home and may owe thousands.

The walking dead these properties may not be, but they still pose a threat to borrowers. The CFPB aims to help bring these zombie properties back to life.

“The CFPB is beginning to look very closely at abandoned properties and zombie foreclosures. There is direct borrower harm if a borrower believes a foreclosure on their property has been conducted and they are no longer responsible, and months or years later find out that they are, that there was never a foreclosure and they have large financial responsibilities that they never knew about.” – Laurie Maggiano, CFPB servicing and secondary markets program manager

[ezcol_2third]Servicers typically send dozens of letters and calls to defaulted homeowners notifying them that their home is going into foreclosure, but usually don’t communicate nearly as well, if at all, when the foreclosure is stalled. The CFPB found it was “extremely common” for servicers to charge off low-balance loans and not notify borrowers or municipalities if they did not take title to the property. Consequently, borrowers had no idea that they were still on the hook for continuing to pay not only the mortgage debt, but code violations, municipal services, taxes and upkeep as well.[/ezcol_2third] [ezcol_1third_end]

Quick Facts:

  • Since 2006, 10 million homes have fallen into foreclosure.
  • More than 2 million homes remain in foreclosure.
  • An estimated 152,000 homes are zombie foreclosures.

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The CFPB indicated that consumers had repeatedly asked the agency for help, saying the servicers were not complying with disclosure requirements. The agency has joined a task force to identify the estimated 152,000 zombie properties. It intends to help resolve the problem by creating a national definition of “abandonment,” which will accelerate the foreclosure process, making vacant homes available for transfer to potential owners, as well as creating a national registry of these zombie properties.

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This article was published on March 14, 2014. All information contained in this posting is deemed correct and current as of this date, but is not guaranteed by the author. Due to the fluid nature of the subject matter, regulations, requirements, laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

The Four Essentials to Real Property Value

 

For real estate to have value, it must have specific characteristics

By Jeff Sorg, OnlineEd Blog

canstockphoto25609598 property value appraisal(May 23, 2012) – For real estate to have value, it must have particular characteristics. These characteristics are often referred to as the Four Essentials to Value.  The Four Essentials to Value are:

Demand – Demand changes from person to person. When many people want the same property, demand increases, and so does its value. When few people desire the same property, demand for it lessens, and so does its value.

Utility – The character of utility requires the property to be useful in some way. The more people it is useful to, the higher its value. Because needs differ from person to person, utility is most often a personal characteristic.

Scarcity – The characteristic of scarcity is based on the supply of the property concerning the demand for the property. The less scarce the property in comparison to its demand, the lower its value. On the other hand, the rarer the property, the higher its value.

Transferability – For a property to have value, the owner must be able to transfer its ownership in exchange for something else of value. Under normal circumstances, transferability is not a factor that affects value. However, because real estate is immobile, its rights and interests must be perceived as valuable. This means the more encumbrances or restrictions against a property, the less its perceived value.

The Four Essentials to Value are easily remembered by the acronym DUST.

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 All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained by third-party sources. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.