Foreclosure - The Silver Lining To The Foreclosure Clouds

Foreclosure Clouds

April 10th, 2008

For those hunting for quick bargains the foreclosure mess seems to be a good place to take the pickings. But it is not as easy as it sounds. Anybody hunting for pearls on the beach following the aftermath of a tidal wave knows the difficulties of finding a gain through the maze of destruction.

Each state has its own foreclosure laws with its specific requirements and timings. There are many steps involved in the foreclosure process. Firstly the house owner has to be formally notified about foreclosure action if he or she has become delinquent. Then it comes up for court auction. If at the auction the house fails to get sold then it becomes the property of the lender. Thus the term foreclosure includes all the various stages of the judicial process.

Thus sifting through the mass of data provided by online trackers is an extremely painstaking job. The data providers make use of public records and the statements of lenders. This has led to competition among firms to collect the information and benefit from this knowledge. Two prominent firms are RealtyTrac and First American CoreLogic. It is another way of business – selling information about foreclosures. The problem is that because there are many variables to one property the findings can be skewed. Darn Blomquist, a spokesperson of RealtyTrac admits that in the beginning this had been a serious problem but not so recently. Today RealtyTrac counts the filings on one property to a maximum count of three – default notice, foreclosure notice and auction notice leading to repossession. Steps are taken to avoid double counting by double checking its own information files.

With this improved method of counting, the company has found that Cape Coral/Fort Myers is the top ranker in the country in this foreclosure race during February this year. One out of 84 houses are in foreclosure – in a total of 3,739 units. The counting is still not perfect, Blomquist admits. Unless there are at least three foreclosures the states are left out of the count and this leads to undercounting.

First American CoreLogic also sells its information. It uses the inventory method of counting the distressed foreclosed units. But here too there are flaws and the perfect picture does not come through. Those states that allow for longer periods for foreclosure are likely to show more properties than other states where the foreclosure process is not lengthy.