Loudoun Foreclosures

Don't Fall Prey To "Quick-Fix" Foreclosure Scams

As a home owner facing foreclosure, you may be desparate to find a way out - a way to turn things around and get back on your feet. But don't let that desparation cloud your judgement or stop you from doing your homework when approached by someone promising to "fix everything" and "keep you out of foreclosure."

Here is the latest case involving scam artists preying on home owners facing foreclosure (via InmanNews):

"Federal officials announced the indictments of 20 people Thursday in two California-based foreclosure rescue and equity-stripping schemes that allegedly netted more than $12 million from more than 100 victims who were left without their homes.

Prosecutors said victims believed that they were making rental payments to "investors" whom they agreed to add to the title of their home. The "investors" were actually straw buyers who often replaced homeowners on the title. After taking out a new mortgage to extract the home's equity, the defendants would sell the victims' home, stop making the mortgage payments, or begin eviction proceedings against the victims, prosecutors said."

Be careful out there, do your homework and remember...there is no quick fix.

Loudoun County Foreclosure Filings Up Despite Virginia & US Down

Here's the latest data regarding foreclosure filings in Loudoun County as well as the rest of the state and nationally (via VAR's Commonwealth Online):

Home foreclosures dropped in the majority of the Washington, D.C. area and across the country, from January to February.

The one-month decrease comes at the start of the spring season, when real estate activity tends to pick up.

The number of properties with foreclosure filings fell 32.5 percent in the District of Columbia in February, with 340 foreclosure filings on properties, down from 504 the month before, according to Irvine, Calif.-based RealtyTrac, a Web-based foreclosure listing company, which releases monthly foreclosure data.

In Northern Virginia, filings slid 18.7 percent, with only one county, Loudoun, seeing a slight increase of 1.3 percent, from 388 properties with foreclosure filings to 393 properties. Prince William County, which has been hit hard by the mortgage crisis, saw a decrease in filings of 23.7 percent, from 1,504 properties to 1,147 properties.

Fairfax County's number of foreclosures dipped 19.2 percent, from 1,330 properties to 1,074 properties, and Arlington County dropped 12.8 percent from 94 properties with foreclosure filings to 82 properties.
Overall, in the state of Virginia, foreclosures dropped 18.7 percent over the past month as well, from 5,152 properties with filings to 4,187 properties.

Across the entire country, the number of properties with foreclosures dipped 4.0 percent from Janury to February.

Rate of New Foreclosures/REOs and Short-Sales For Sale Steady

The rate at which new foreclosure/REO and short-sale properties are coming on the market in Loudoun County remains steady.

• January saw 308 new foreclosure/REO and short-sale properties come on the market. That's 9.9 new properties for sale per day.
• February saw 258 new foreclosure/REO and short-sale properties come on the market. That's 8.9 new properties for sale per day.
• So far this month (3/1-3/16), 153 new foreclosure/REO and short-sale properties have come on the market. That's 9.5 new properties per day.

As you can see, the rate at which new foreclosure/REO and short-sale properties come on the market has remained steady so far this year. Until we see the number per day go down, property values will have a tough time going anywhere but sideways.

In addition to this type of inventory, another thing to keep a close eye on is the overall inventory in Loudoun County (click here for the post on that).

An Example Of Real Estate Investing Gone Bad

During the boom market, many people and investors jumped at the opportunity to buy new construction in Loudoun County with the hopes of flipping the property(ies) in the future for a profit. After all, many thought that the boom would never end.

Well, many got burned.

One such example is the owner of three of the homes in the Villages of Waxpool subdivision in Ashburn.

They bought three properties from the builder for a total amount of $3,403,708 in 2005.

These three properties are now all on the market almost 3 years later as "short-sales" for a total amount of $2,490,664. If they get the full asking price, they will have lost $913,044. And that's if the bank/lender approves the short-sale, which doesn't happen often.

This just goes to show that you need to do your homework before making any such decisions and perhaps not go at it alone.

U.S. Foreclosures Hit Record High; Virginia Below National Level

Just in case you haven't read or seen any news within the past 24 hours... Foreclosures in America have hit an all-time high. Here are links to some of the stories:

From The Washington Post: Home Foreclosures Hit Record High

"The spike was driven by declining home prices..."

From CNNMoney: Foreclosures hit all-time high

"Declining home prices are clearly the driving factor behind foreclosures, but the reasons and magnitude of the declines differ from state to state," said Doug Duncan, MBA's Chief Economist said in a prepared statement."

From AP: Home Foreclosures Hit Record High

"Clearly it's the worst it's been," chief association economist Doug Duncan said in an interview with The Associated Press. ... "We expect some increases in the next couple of quarters,"

From Bloomberg: U.S. Mortgage Foreclosures Rise as Owners "Give Up"

"U.S. mortgage foreclosures rose to an all-time high at the end of 2007 as borrowers with adjustable-rate loans walked away from properties before their payments rose, the Mortgage Bankers Association said today.

"We're seeing people give up even before they get to the reset because they couldn't afford the home in the first place,'' said Jay Brinkmann, vice president of research and economics for the Washington-based trade group."

From InmanNews: U.S. foreclosure starts hit new records

"Our general outlook is as long as house prices are declining, we expect to see some continued increase in delinquencies and foreclosures," Duncan said. With the continued seizure of credit markets and tightened underwriting standards, "we don't expect to see the peak (in foreclosures) until mid- to late-2008."

All of the articles/quotes hit on a few key points:

1. foreclosures are at all-time highs
2. falling prices is the driving force behind foreclosures
3. the foreclosure rate is expected to continue to rise
4. people are giving up/walking away before their rate resets

Despite all of this negative news, there is some good news for us in Loudoun County and the DC metro area. In the Washington region, foreclosure rates were below the national level: In the District, 1 percent of loans were in foreclosure; in Virginia, 1.01 percent; and in Maryland, 1.22 percent.

Loudoun County Foreclosure/REO Market Makes International Headlines

The situation regarding foreclosures in Loudoun County made international headlines by being featured in a story in The Economist entitled "Foreclosures In America; Searching For Plan B" (this week's issue).

Are Some Borrowers Just "Walking Away" From Their Mortgage?

There is a great article over at Calculated Risk that deals with the notion that some borrowers are just "walking away" and letting their property go into foreclosure rather than trying to sort things out and work with the bank. It's a long article, but definitely a good read.

Least Expensive Foreclosed/REO Town Home In Ashburn

At $219, 920, this is the least expensive foreclosed/REO town home in Ashburn. It has 3 bedrooms, 3.5 baths, approx. 1850 sq ft, a fenced yard and a deck. It backs to common area and a tot lot.

If you'd like more information, let us know.