Phila. area homes repossessed by mortgage lenders totaled 7% of fourth-quarter sales

Posted: March 01, 2012

Houses repossessed by mortgage lenders through foreclosure accounted for 7 percent of fourth-quarter 2011 sales in the metropolitan Philadelphia area, the search engine RealtyTrac said in a report released Thursday.

Although the number of houses repossessed, 1,010, was 8.14 percent higher than in the same three months of 2010, the percentage of total sales was half that of the United States as a whole. RealtyTrac's numbers cover the Philadelphia, Camden, and Wilmington metropolitan statistical area.

For all of 2011, however, sales of repossessed, or bank-owned, properties locally were about 10 percent lower than in 2010, 3,954 houses vs. 4,407, representing 6.05 percent of total transactions.

Nationally, bank-owned transactions accounted for nearly one in every four sales during the fourth quarter and through the year, said RealtyTrac CEO Brandon Moore.

Nationwide, Moore said, "we expect to see foreclosure-related sales increase in 2012, particularly pre-foreclosure [short] sales, as lenders start to more aggressively dispose of distressed assets held up by the mortgage-servicing gridlock over the past 18 months."

Neither numbers nor percentage of sales put this region on the list of "top metro areas to buy bank-owned properties" in the fourth quarter - it was the size of the price discount, an average of 52.5 percent, which dropped the sale price of a bank-owned house to $109,878.

Only Milwaukee's discount of 57.9 percent was higher than Philadelphia's on the list of the 10 metro areas.

The increase in bank-owned sales here in the fourth quarter appears related to policy changes by some lenders.

"What I have noticed is that many of these lenders have put a better and more realistic system in place to manage these listings," especially being reasonable about the price, said Noelle M. Barbone, office manager of Weichert Realtors in Media. "This shortened the turn-around time for negotiating and closing."

There are still some holdouts among lenders, as Donald Sepety, an agent specializing in bank-owned sales at Prudential Fox & Roach in Collegeville, has found.

"Things appear easier, but many of the lenders are sticking to their appraised values for their final sale price," Sepety said.

For example, he said, he had a Pottstown listing with an appraised value of $40,000. The house sold for that, but not before the lender turned down two other offers that were not full price.

Sepety said there seemed to be a "lull in getting the foreclosed properties up and running," most of it having to do with the eviction process.

The short-sale process, long criticized by agents for being unreasonably slow, is showing improvement.

"I had a buyer who made an offer on a short-sale property in the late fall, and the short-sale bank approved the offer the day after it was submitted," said Ruth Feldman, an agent with Weichert Realtors McCarthy Associates in Philadelphia.

"We had to scramble to get the buyer's mortgage process completed in order to settle within the required 30 days," she said, noting some lenders have become "more cooperative, proactive, and speedy."

For the year, Pennsylvania had 10,988 bank-owned sales, accounting for 9.56 percent of all transactions, down 12 percent from 2010. New Jersey's 10,020 bank-owned transations represented 10.47 percent of all sales and were 26.4 percent lower than in 2010.


Contact Alan J. Heavens

at 215-854-2472 or aheavens@phillynews.com, or follow on Twitter @alheavens.

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