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davepamn

M$1.00 Funded By Mahalo ? | April 15, 2009 02:49 PM

What number of foreclosed homes are second home investments?

Are the bulk of foreclosed home investment properties or primary residents?

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ssharon

April 22, 2009 03:16 PM

I can't give you an exact number or percentage, but I would estimate that no more than 15% of foreclosures are investment properties. I work in a real estate law firm that exclusively does foreclosure work in the state of New York and that 15% is my guess based on all of the files I have worked with (in the hundreds).

I would speculate that most people who can afford to have an investment property are more savvy with respect to getting better interest rates. Having multiple properties also allows investors to sell off failing properties to help pay for the others.

By far the majority of the foreclosures I have seen are primary residences, but many are also summer homes or semi-fraudulent loans (as in someone with bad credit gets a friend to take out the mortgage for them).

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Voted as best: davepamn, interzone, masontx, lesliec, jellylala

davepamn

April 24, 2009 05:12 PM

Banks can't tolerate much more than 3-5 percent foreclosures. If 15 percent is true then banks must be near insolvancy.

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ssharon

April 24, 2009 10:10 PM

I am saying that of the foreclosures (which may only be 3-5% of the number of mortgages a bank gives out) no more than 15% of the ones I have seen were investment properties.

So if a bank gave out 1000 loans and 5% are in foreclosure (50 homes) of that maybe 10% (5 homes) were investment properties.

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