The amount of bank owned properties currently available in the Lehigh Valley has risen to new levels. Part of this is due to creative financing done by both banks and borrowsers in recent years. In addition many homes were over valued and therefore over priced, which lead to many buyers over paying. Add this to  certain mortgage programs which allowed borrows to get in the door at a lower payment, only to have that payment reset to higher levels and higher interest rates and that equals disaster.

So many people today are faced with the value of their home going down, yet the mortgae payment is going up, putting them into a position that is very difficult to overcome. The market is correcting itself now, and will continue to do so for the next 1-2 years.

That said, now more than ever is the time to buy real estate in the Lehigh Valley! Both prices and interest rates are lower than they have been in years and there are a wide selection of bank owned foreclosure listings available in the Lehigh Valley.

A few things you need to understand about buying a foreclosure: They are not in the best condition, usally they are fixer uppers, requiring extensive cosmetic updates, and in some cases minor repairs. Bank owned properties are typically sold as-is, and that is why they are priced below market.

The first step in buying a home is to get pre-approvedby a local lender her in the Lehigh Valley. The next step is to request a list of foreclosures from Lehigh Valley Real Estate Agent.

You can also use our contact form to request a free list of all Lehigh Valley Foreclosure listings.

Foreclosure aid: Measure would help about 400,000 homeowners.

The Senate cleared the last hurdle Friday to passing a housing rescue aimed at sparing hundreds of thousands of homeowners from foreclosure and bolstering troubled mortgage giants Fannie Mae and Freddie Mac.

The 80-13 test vote showed broad support for the election-year package and put it on track to pass the Senate by today. The White House says President Bush will sign it, having earlier dropped a threat to veto it over $3.9 billion in neighborhood grants.

The bill — regarded as the most significant housing legislation in a generation — is designed to help an estimated 400,000 homeowners escape foreclosure by letting them refinance into more affordable loans backed by the Federal Housing Administration.

It was set to clear Congress as a private company reported that the number of households facing the foreclosure process more than doubled in the second quarter of 2008 compared with a year ago. RealtyTrac Inc. of Irvine, Calif., said that 739,714 homes received at least one foreclosure-related notice during the quarter, or one in every 171 U.S. households.

”The American people can begin to see they’re going to get some relief and some help from their Congress,” said Sen. Christopher J. Dodd, D-Conn., the Banking Committee chairman.

The plan gives the Treasury Department power to spend unlimited amounts to prop up Fannie and Freddie, should they need it, to calm investor fears about their financial stability at a time of rising foreclosures and falling home values. Treasury Secretary Henry M. Paulson calls the authority a ”backstop” which he has no intention of using.

Paulson’s request for the emergency power helped forge a bipartisan deal on the legislation, which also creates a new regulator with tighter controls on the government-sponsored mortgage firms — something Republicans have long sought.

Democrats also won key concessions as part of the compromise, including a permanent affordable housing program to be financed by Fannie and Freddie profits and the $3.9 billion in grants for buying and fixing up foreclosed properties in neighborhoods hit hardest by the housing crisis.

Many conservative Republicans are vehemently opposed to the foreclosure rescue, which they call a bailout of irresponsible homeowners and unscrupulous lenders. They are equally furious about the help for Fannie Mae and Freddie Mac, companies they say enjoy lavish profits in good times and wield their outsized political clout to resist regulation while depending on the government to bail them out should they falter.

Sen. Jim DeMint, R-S.C., was single-handedly delaying a final vote on the package until today because Democrats refused to allow a vote on his proposal barring the two firms from lobbying and making political contributions.

”These organizations that are now guaranteed by the American taxpayer should no longer be able to spend millions of dollars buying influence in Congress. That’s a conflict of interest,” DeMint said.

Dodd called Republican efforts to delay the measure’s passage ”tragic” given how many people are losing their homes each day.

More than three-quarters of Republicans voted against the measure when it passed the House on Wednesday.

By Julie Hirschfeld Davis | Of The Associated Press
July 26, 2008

So what exactly is a shot sale anyway? A short sale is when a home is in pre-foreclosure and the bank allows the owner to list the home with a Realtor and try to sell the home and avoid foreclosure. In most cases it is being sold for less than what is owed to the bank. The owner may be very behind on the payments, and may also have multiple loans on the home. The bank(s) will agree to the short sale because they will ultimately recoup more money a lot faster than if they had to go through the foreclosure process. Also, if the home was foreclosed upon, usually only the primary lender gets paid. So if  the owner has 2nd mortgages, or lines of credit with other banks, they may not even get paid at all if the house goes into foreclosure. The owner makes out because even though they are paying back less than what they owe, their accounts are marked settled and paid, also there credit does not suffer as badly as if the property was foreclosed on.

This works out well for the potential home buyer as well. He or she is able to purchase a home in the Lehigh Valley for less than market value, usually 10 to as much as 30 or 40% below actual value of the home. One thing to consider is that the bank(s) approve all offers, and the homes are being sold as-is, and quite often the may need minor repairs and/or TLC. Time is another factor to consider, it may take the bank(s) up to 6 or even 8 weeks to approve the offer.

If you look at the big picture, everyone makes out. The banks recoup most of their money and don’t have to deal with the hassle and expense of the foreclosure process, the seller gets to save their credit and satisfy their account(s) and best of all, the buyer gets a good deal on a pre-foreclosure in the Lehigh Valley!

Contact an Agent for more info