Many people have been fearful of the next wave of foreclosures due to hit the market. It is estimated that it will be about two or three years before all of the adjusting loans (toxic loans) are out of the system.
There are new methods of dealing with the foreclosure requirement. Last year the banks were required to follow certain guidelines to handle defaulting loans. They did not have lots of options. There were strict rules and timelines.
The new system encourages the bank to avoid foreclosure as much as is possible. Banks are urged to make loan modifications whenever possible. If an owner is not able to meet mortgage payment requirements, the house can go to short sale.
The new option allows the bank to offer the owner an opportunity to lease the house from the bank. The owner will be required to pay market rate rent. The rent can only be 31% of the owner's income. The owner will have to sign the deed for the house back to the bank. The bank can hold the property for months or years. It is the bank's choice as to when they will sell the house.
Are foreclosures history. No. Foreclosure is still possible. Banks now have other options available. Now that banks are able to hold properties until it is the right time to sell, we can readily expect to see the market stabilize.
One year ago, foreclosed properties were in terrible condition and the banks would not fix them. Today, banks freshen up homes and make them appear as if they are a vacant house listed as a standard sale.
For those individuals who waited to see what the market was going to do; it is time to act. The price drop is gone. Eastvale home prices are already showing positive growth.