WASHINGTON – July 14, 2011 – An analysis of 153,956 foreclosure sales on first mortgages from January 2008 to July 2011 by ForeclosureRadar finds that homeowners get to stay longer in foreclosed properties that worth more than $417,000.
It happens because lenders want to look good, and it helps to keep the higher losses off their books as long as possible.
ForeclosureRadar CEO Sean Toole says that homeowners with second mortgages maintain occupancy without making payments for 393 days on average, versus 291 days for homeowners with only one mortgage.
The average loan balance for higher-value foreclosures was $616,000, with an average current market value of $404,000, meaning the lender will lose more than $250,000 per loan after sales costs. The average loan balance of lower-value foreclosures was $274,000, with an average current market value of $176,000, resulting in an average loss of $115,000.
Source: RISMedia (07/13/11)
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