From the Record:
About one in every 12 New Jersey home sales in the third quarter of 2011 involved foreclosed properties — a steep drop from the previous year, according to RealtyTrac, a California company that follows the foreclosure market.
Nationally, foreclosure sales made up 20 percent of sales in the third quarter, down from 30 percent in the same period a year earlier.
Lenders have sharply pulled back on foreclosure activity since fall 2010, when reports arose that lenders’ representatives were “robo-signing” affidavits and other documents — signing them so quickly they couldn’t be verified. Lenders are now trying to show courts in New Jersey and other states that they are not cutting corners in foreclosures. And state attorneys general are close to a settlement with lenders over their foreclosure practices.
“Even with the hurdles to selling foreclosures, foreclosure sales continue to represent a historically high percentage of all sales,” said Brandon Moore, chief executive officer of RealtyTrac. “In 2005 and 2006, foreclosure sales consistently accounted for less than 5 percent of all sales nationwide.”
Foreclosed properties typically sell at a steep discount, which tends to pull down the prices of competing properties. In New Jersey, foreclosed properties sold for an average of $208,801 in the third quarter, a 38 percent discount to regular properties. Nationally, foreclosed properties sold for an average $165,322, a 34 percent discount, RealtyTrac said.
“The sooner the market gets more clarity about accepted foreclosure procedures, primarily through the long-promised settlement between multiple states attorneys general and major lenders, the sooner the market can more efficiently dispose of these distressed properties,” Moore said.