"Opportunity or Disaster?"
If you are Los Angeles home buyer looking for a great deal, keep a lookout for three letters that can signal opportunity... N...O...D.
NOD stands for notice of default, which is the instrument used to start a foreclosure proceeding...and according to a recent report... they're being used a lot in California right now.
Realty-Trac recently reported that 3 states dominated the foreclosure list and accounted for more foreclosures between them than the rest of the country combined.
Those three states in order were:
1. California - 30.0 %. 2. Florida - 15.7 %. 3. Arizona - 5.4%.
Home buyers can expect the flow of property in many parts of California...and Los Angeles in particular...to be controlled by banks.
Banks will continue to have a back log of inventory as they accumulate an ever growing number of foreclosures.
However...buying a bank property can be a trying experience.
Not every foreclosed home is in pristine condition, but there should be a glut of them to chose from in the months ahead. In many instances, these homes are perfect for first-time buyers...move-up buyers... and investors.
Banks are gradually getting better at disposing their foreclosures from toxic Los Angeles home loans.
The process of buying a bank REO (REO stands for a bank real estate owned) isn't as difficult as it has been in the past...but it can still be a very challenging process.
This dynamic of banks controlling the ebb and flow of real estate sales in certain areas of the Los Angeles doesn't figure to change any time soon.
The Mortgage Bankers Association reported today that the home mortgage delinquency rate climbed to 9.24%...up slightly from the first quarter... which had been the previous record high.
To know ones surprise...California's 9.4% delinquency rate was slightly higher than the nation's.
The MBA defines a loan as delinquent when at least one payment is past due. Lenders typically do not start foreclosure proceedings until multiple payments are missed on a Los Angeles home mortgage.
With the absence of an effective foreclosure remedy... which doesn't seem likely in the near future... these latest numbers indicate a steady stream of foreclosures will continue for many months.
Many of these current delinquencies will eventually lead to foreclosures...and these foreclosure will become REO's for interested home buyer searching for bargain properties.
"It is unlikely we will see meaningful reductions in the foreclosure and delinquency rates until the employment situation improves," said Jay Brinkmann, MBA's chief economist.
Employment is the key to stabilizing the economy and reducing the amount of possible foreclosures.
Unfortunately, the latest news on the job market does not provide any real encouragement.
California's unemployment rate was 11.6 percent in June as 66,500 were lost during the month. The number of unemployed in California was up by 850,000 compared to June of last year.
Based on these numbers...banks figure to be big players in the real estate market in many areas throughout Los Angeles for the next several years.
For those looking at Los Angeles, Ca homes for sale right now...there is opportunity in the real estate market as California digs out from a tough recession.
Given the current state of California's economy... it appears that one man's NOD...is another man's dream home.
If you don't think so...just ask you local banker.
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