Foreclosure Fraud Alert

Desperate Lenders Slashing the Prices on Properties they Own

  From NuWire Investor - June 17, 2008

 With foreclosures rapidly increasing, many lenders are finding themselves with more foreclosure properties on hand than they can deal with, and are slashing prices as a result.

"By setting prices at extraordinarily low levels, say, $175,000 for a house that sold for $350,000 three years ago, banks can spark multiple offers," according to the Associated Press. Many lenders use this strategy because they can get multiple offers on each foreclosure property from buyers lured by the hugely decreased prices. Lenders can then choose the buyer who offers them the least amount of risk.

The bursting of the housing bubble and the rapid rise in foreclosures have made many lenders wary of risk. Between April 2007 and April 2008, skyrocketing foreclosures caused the number of bank-owned properties to more than double, from 254,000 to 660,000, according to First American CoreLogic, a real estate information company. Bank-owned properties are also known as real estate owned properties (REOs).

"For real estate agents, helping banks sell off properties is one of the only flourishing businesses these days. But it's not for everybody," according to the AP. "Agents can easily pay hundreds of dollars a month on upkeep—including utility bills, cleaning and lawn care—and must go through the hassle of getting reimbursed by the bank. They sometimes have to evict homeowners, tenants or squatters. And in many cases, they have to deal with vandalism or theft of everything from copper pipes to appliances and air conditioners." (For more on how investors can take advantage of the rising number of foreclosures, please see our previous article Capitalizing on Record Foreclosures.)

The Foreclosure Fraud Alert Website http://www.foreclosurefraudalert.com/

The Foreclosure Fraud Alert Blog  http://www.foreclosurefraudalert.com/fraudblog

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