Loan Modifications Up While Short Sales and Foreclosures Slip
New data from Housing Wire indicates loan modifications are on the rise while short sales and foreclosures continue to trend downwards.
These statistics show emerging trends. So what does it all mean for real estate investing?
According to the numbers just released, 204,000 loan modifications were approved between April and June 2013. During the second quarter, 81,000 short sales were approved, down 3% from the first quarter and down 25% year-over-year.
Foreclosure starts are also reportedly down 30% from the first quarter of 2013. Foreclosures actually completed nationwide were only 2% off for the same period.
However, those focused on real estate investing in short sales and foreclosures should be encouraged by the fact that mortgage delinquencies exceeding 60 days actually remained unchanged at 2.2 million.
There is undoubtedly a massive pool of distressed loans and coming foreclosures, totaling many billions of dollars and dwarfing the current REO pool, which investors can tap into. Despite the size of this pool and foreclosures, there are still at least a couple of years worth of deals; even in the healthiest markets from San Diego to Connecticut.
Many homeowners may be lucky enough to avoid foreclosures, as house prices rise and loan modifications are approved. Still, this doesn’t mean that many of these property owners aren’t eager and highly motivated to sell their homes. In fact, many that have had loans modified may have assumable mortgage loans which can be taken over by real estate investors.
Right now, experts anticipate these statistics to continue to bump along. While home values and equity rises, the great conditions for flipping houses and acquiring long term rentals for the foreseeable future will continue.