Info and Tips about Ky Master Commissioner Sales

Foreclosures filings down, for now . . . New foreclosures have slowed dramatically in Greater Cincinnati and Northern Kentucky, dropping 27.7 percent to 5,840 cases in the first six months of this year.

Records also show that Ohio and Kentucky each had its lowest new caseload in at least five years, according to the Ohio Supreme Court and the Kentucky Administrative Office of the Courts.

Ohio saw 34,330 foreclosures through June 30, down 25.3 percent from the same period a year ago. Kentucky saw a 40.4 percent drop to 6,277 new foreclosures.

But experts say the foreclosure crisis is far from over. Foreclosures are expected to escalate in coming months as major banks and loan servicers increase foreclosures after tightening their procedures following the robo-signing scandal that emerged late last year.

“It’s an artificial drop – a statistical anomaly,” said Michael Van Buskirk, president of the Ohio Bankers League. He said major financial institutions under scrutiny from federal regulators and state attorneys general slowed down their foreclosures to improve their procedures.

What is a short sale? has an excellent article on short sales:

What is a short sale?

Short sales are an increasingly common real estate practice with a somewhat confusing name. It doesn’t refer to the time the sale takes but that the selling price of the home falls short of paying off the existing loan. In fact, short sales rarely take a short time.

“Short sales take quite a bit longer than regular transactions,” said Heagy’s real estate agent, Brandi Mahon, a certified default resolution specialist with Keller Williams Realty Alternative Foreclosure Solutions.

The added time comes because lenders are involved in the process and must approve a sale after they have determined that the homeowners have a proven hardship and won’t be able to pay the bills.

“Because it takes so long, the home’s buyer may not want to wait that long, and it causes a lot of frustration,” said Mahon, who has handled short sales since 2007. She moved here last year after working in Texas. “I have had some short sales that have taken over a year.”

The concept has “moved to the forefront” over the past three years, as the country seeks to deal with a housing market in pain, said Rookard Real Estate Consultants’ Jack Rookard, who has handled short sales in Lexington. For lenders, he said, a short sale is easier than dealing with the time involved in proceeding to foreclosure and the various fees associated with it.

In short sales, lenders sometimes forgive the difference between the home’s sale price and the loan amount, but others require that borrowers repay the difference.

There are two other common options for homeowners in distress. The first, called deed in lieu, sees property owners sign the property’s deed back to the lenders in exchange for the loan being canceled. The downside for the lender is that it must market the property for sale without assistance from the former owner.

The third option, which has received the most notoriety in recent years, is foreclosure, in which the property is sold to the highest bidder in an attempt to satisfy the debt.

The rest of the article is excellent as well.

Kentucky borrowers having harder time getting financing

Chris Otts from the Courier-Journal has a good roundup:  Yesterday I linked to a new Wall Street Journal analysis showing that Kentucky borrowers had more trouble, on average, getting new or refinanced mortgages in 2010.

I asked Louisville mortgage loan officer Adam Hall, president of the Mortgage Bankers Association of Kentucky, what he makes of the report.

Hall cited several factors, including vacant properties in Louisville, manufactured homes in rural areas of the state and a significant percentage of the population without bank accounts or credit histories.

Here are his full comments:

Adam Hall

In the urban areas of the state, like Louisville, we have a significant issue with foreclosure and vacant property since 2005.  Since this has been so prolonged and predominantly concreted in the West and Southwest, you have pockets in the community where lending is very challenging.  Freddie and Fannie and FHA  both require appraisers to complete, and underwriters to review, a market conditions report.  This report provides context to the nature of the sales in the market (i.e. how many foreclosures, how many vacant homes, based on current sales trends how much supply is there? etc).

When you look at an neighborhood like Portland or Russell where 20-25% of the properties are vacant, and values even from the PVA, have declined 15%  for two consecutive years, making that loan is a challenge.


When you look at more rural parts of the state, a good portion of those properties are going to be manufactured homes.  The lending standards over the last several years have become  much stricter for this property type.

There are a lot of reasons for this but the biggest is that these property types typically depreciate over time.  From a legacy perspective, lenders did not always make sure the vehicle title was properly retired and so that calls into question lien enforcement.  And finally, frequently people will build on or move a manufactured home.  If this occurs, it  is not longer eligible for mortgage financing.


Finally, in more rural areas, the value of property is more the value of the land and less the value of the structure.  For traditional mortgage financing, if the value of the land exceeds 1/3 the overall value of the property, it is not eligible for financing.


From the borrower perspective, in the urban areas, you have a lot of folks who have suffered through foreclosure.  20-25% of our population is unbanked or under banked so they lack the credit histories to qualify for financing.  And our unemployment rate is among the top 20 in the country and has held at around 10% for a very extended period of time.


With all those factors, we are a more challenging market to lend in with the current, more restrictive requirements.

Foreclosure affecting home prices

WPSD Local 6: Imagine trying to sell your home and realizing it just isn’t worth what you thought it was.

That’s what lots of families are discovering and a local realtor said foreclosure is to blame.

If two homes are for sale, one for sale by owner and the other by a bank that desperately needs to get rid of foreclosed property, then a buyer will likely choose the foreclosed home because of the deep discounts offered. That’s good for the buyer but bad for the seller.

Now imagine other foreclosed properties pop up in the neighborhood. If they all sell for less than what they’re worth, a realtor said that brings down the value of similar houses in that neighborhood.

. . . A look at foreclosure numbers by state as of last month: in Kentucky one in every 1879 housing units received a foreclosure notice; in Missouri, one in every 1051; in Tennessee, one in every 949, and in Illinois one in every 480 housing units received a foreclosure notice last month.