Distressed Houses for sale in the U.S. largest off in Five Years

U.S. households in the foreclosure process was sold for about 32 percent less than non-distressed properties in the third quarter, the biggest reduction in five years, depending on buyer demand slumped, according to RealtyTrac Inc.

The average discount real estate owned by banks, residences or otherwise which is scheduled for auction increased from 29 percent a year earlier, RealtyTrac said in a report released today. A quarter of all U.S. transactions participating household types, according to data from the vendor in Irvine, California.

Sales of foreclosed properties fell 31 percent as the end of a tax credit for buyers of reducing global purchasing, said RealtyTrac. The decline was filed with loan servicers such as Bank of America Corp. and JPMorgan Chase & Co. stopped some attacks home amid allegations that employees process thousands of documents without checking it, a practice known as sign theft.

"The controversy over exclusion of processing, which was brought to light late in the third quarter, demand may cool further," said James J. Saccacio, CEO of RealtyTrac, in the report.

Home attacks fell 9 percent in October from the previous month, RealtyTrac reported Nov. 11. The company data are from the information recorded in government records. Another company, Lender Processing Services Inc., reported a fall of 36 percent, basing its figures on data collected from managers at the time of foreclosure.

Negotiating price cuts

Carl Chmielewski, a broker with Providence Realty LLC in Hudson, Ohio, that specializes in selling foreclosed properties, said 14 of its sales were suspended in October while lending managers or owners, such as Bank of America, JP Morgan, Fannie Mae and Allied Financial Inc. 's unit of GMAC, made sure the documents are processed correctly.

Lenders are more willing to negotiate lower prices for foreclosures, "said Chmielewski, who said he sold 25 to 30 homes during a typical month.

"We're finding that there is greater flexibility of banks said in a telephone interview. "The offers were not accepted a couple of years now."

Fannie Mae began offering incentives to their homes seized in September, including giving as much as 3.5 percent of the purchase price for closing fees. Agents representing buyers Fannie Mae foreclosed homes also stood to receive a bonus of $ 1,500 for closing a sale, according to an announcement of 23 September.

41% off

property owned by the Bank sold an average of 41 percent off in the third quarter, up from 35 percent a year earlier, RealtyTrac said. Discounts for homes in default or auction an average of 19 percent, compared with 18 percent last year. Most of these properties were short sales, in which a lender accepts less than the balance of a mortgage, said Daren Blomquist, a RealtyTrac spokesman.

The global offering was the largest since the fourth quarter of 2005, when the average was 34 percent. Only 0.5 percent of U.S. sales foreclosures were at that time, according to RealtyTrac.

Sales of existing homes, which constitute over 90 percent of the market, fell more than expected in October amid the foreclosure moratorium and a lack of tax credit of up to $ 8,000, the National Association of Realtors reported 23 November. Purchases fell in July to its slowest pace in a decade of record keeping by the Chicago-based group.