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Effects Of Mortgage Foreclosure In Real Estate
from:Even if you are not defaulting on your mortgage, you still may be feeling the effects of other mortgage foreclosure in real estate markets. It's estimated that multiple foreclosed homes in your neighborhood can affect a 1% drop in price, however, some neighborhoods in the states with the highest foreclosure rates have dropped significantly more than that. Is it all because of mortgage foreclosure in real estate or something more?
Additional Factors In Foreclosures
In addition to the loss for a lender, the reason most prices drop in neighborhoods is not strictly because one or two foreclosures. It's mostly because of the perception of loss that is associated with mortgage foreclosure in real estate. Foreclosures are sometimes easy to spot as the bank with board up the house and eviction notices posted on doors. Once that happens to one owner, others may follow and that's when it can become a neighborhood problem.
When there is a mortgage foreclosure in real estate, the owner who occupied the home often abandons the home or is evicted. Once they are gone, the mow doesn't get cut and the house starts to deteriorate from lack of maintenance. If the house remains empty for a long period of time, it can attract squatters and vandals. The copper piping might be stripped and the house damaged, reducing it's market value even further. Once there is more than one house that looks this way, nearby houses in the market can be seen as less desirable too – because the neighborhood has become less desirable on whole.
Effects Of Mortgage Foreclosure In Real Estate For Homeowners Associations
Another, often overlooked, effect is that the homeowners are no longer around to pay homeowners dues to the homeowners association. This means that as the homeowners association fund gets drained trying to keep up with foreclosed homes, other homeowners in the association may be asked to make up the difference. This can put a strain on the entire community and eventually, if the homeowners dues get too large, they can be a source of default too.
In terms of comparable market value, most realtors will use homes in the same neighborhood to estimate the value of your home, especially if they are part of the same homeowners association group. Once there are multiple foreclosures in the area, this can begin to drag down the value of the homes within the same homeowners association group. Even with their ability to foreclose on properties that fail to pay homeowner dues, this would be considerably more expense than most homeowners associations can afford.
Real Estate Foreclosure Auctions News
Fifth real estate investor pleads guilty to rigging foreclosure auctions
MOBILE, Alabama -- A local real estate investor last week became the latest businessman to acknowledge guilt in a years-long conspiracy to rig foreclosure auctions to artificially depress prices by limiting competition.
Read more...Mobile real estate investor to plead guilty to bid rigging, mail fraud at foreclosure auctions
A Mobile real estate investor has agreed to plead guilty and to serve one year in prison for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions, according to a Department of Justice press release.
Read more...I-Team: Lawsuit Claims Conflict of Interest in Real Estate Auctions
Investors decide the future of Las Vegas homeownership underneath a downtown carport, trading millions of dollars and dozens of homes every weekday. But a lawsuit claims those at the top of the group running the auctions may have a conflict of interest that violates state law.
Read more...Fourth investor pleads guilty to rigging real estate foreclosure auctions in Mobile area
MOBILE, Alabama -- A local real estate investor pleaded guilty today to manipulating auctions of foreclosed properties, becoming the 4th person to admit to a long-running conspiracy.
Read more...Real estate investors plead guilty of rigging auctions
Two real estate investors who do business in San Mateo County have pleaded guilty to mail fraud and rigging public foreclosure auctions outside the Redwood City courthouse by agreeing not to bid against each other, according to the Department of Justice.
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