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Foreclosures in Frisco Texas
The Advantages of Buying REO Foreclosures in
Frisco Texas
Foreclosures in
Frisco Texas offer some of the best deals in the Dallas, Fort Worth area. If
your looking for a newer home at a great price, this location has it all.
There are
thousands of foreclosed properties in the Dallas Fort Worth (DFW) area, and
Frisco has some of the best deals available. Foreclosures are not new
to the real estate market, nor is this predicament exclusive to Texas. In the
past the number of properties that went back to the bank flowed at a somewhat
steady rate and posed no real threat to the financial stability of lenders, that
however has changed. A decade ago almost all of homeowner defaults stemmed from our rapidly
changing world that spawned financial difficulty for people, and if that bump in
the road of life was not adjusted swiftly, some people eventually lost their
homes. Today,
subprime lending, a sick economy, and
massive loss of jobs, is producing a flood of foreclosures and subsequently destabilizing the
entire mortgage lending business and housing market.
Not your
Fathers Foreclosure
When most people
think of a foreclosure, they tend to imagine a forty year old house that is run down,
in need of major repair just to make it livable, and it’s usually the ugliest
house on the block. Am I right? Well, I have to admit that those houses are
still out there but with all the available foreclosures on the market today,
they are in the minority. Most of the recent REO’s do not require extensive
repair and they are far from ugly. If you are planning to buy a bank owned
property in Frisco, you may have some difficulty finding a ten year old house
that is in need of a major make over. There is a reason for that, the majority
of homes in that area weren’t even around ten years ago, so the percentage of
available foreclosures in Frisco are newer homes, in very good condition, that
have seen very little traffic with in. The most common repair for these homes is
interior paint and maybe carpet.
What’s going
on?
I’m sure
everyone is tired hearing the word "Subprime", and all the subsequent news
relating to the mortgage crises.
Well this is where those newer
foreclosed houses in Frisco, Prosper, McKinney, Allen, Sachse, Wylie and the
majority of other towns that skirt the DFW area are coming from. Over a period
of time, starting around 1999, banks began this upward spiral of “alternative
lending” to accommodate investors that were looking for a better return on their
money.
Ten years ago, to qualify for a home loan a
borrower had to have two years non interrupted employment, at least a five
percent down payment with good credit and had to fall within the prescribed debt
ratio that would determined how much the person could borrow. This was a formula
for a conforming loan, one that Fannie Mae and the secondary markets required in
order for them to buy that note, thus allowing the bank to make more loans.
The problem started when lenders steered
away from this requirement and were allowed to set new rules.
In the beginning, the risk was
relatively low and only a few people could take advantage of the new rules, but
as time went on more private investors wanted to get in on the action flooding
the market with money and the loan originators started cranking out loans with
higher yield and ,of course higher risk. The feeding frenzy had begun.
Each successive year brought on
new competitive programs and riskier loans, until there were virtually no
requirements to qualify for a loan. Now I’m not a loan officer, so I guess using
the phrase “Until You Walk In My Shoes” would apply, but, if a person came in
with a loan request and they had bad credit, no money for a down payment, no
money to cover the closing let alone the inspections, and on top of that, they
did not have a job, do you think the thought “Bad Investment “might come to the
forefront of a loan officers mind, but this is an example of just how
nonsensical the lending business had become.
Why
Now
Qualification was one aspect of
the lending game. Praying on people's wants and desires also played a role in
this national disaster. Lenders were allowing homebuyers to purchase homes that
they could not afford. By lending 100% of the purchase price and using a loan call an ARM (Adjustable Rate Mortgage)
too many people obtained loans with a very low initial first year payment
allowing them to buy a much more expensive house then they could otherwise
afford. Unfortunately, as the ARM adjusted, the monthly mortgage payment became
unaffordable and the owner was forced to abandon the home usually at the end of
a foreclosure. An adjustable rate mortgage is not a bad vehicle to use to
finance a home, it was the unusual way that lenders structured these loans that
made them so dangerous.
These homes have been making themselves know for a few
years now, via loans that had originated four to seven years back, and with some
of the worst financing abuse occurring well into 2006, there were more
foreclosures to come, many more, and at this point as job losses
continue, an easing in foreclosures looks unlikely to happen any time soon.
This is why you can buy a foreclosure in Frisco, and other
cities surrounding the Dallas Fort Worth area, that are newer homes, in great
shape, for much less then market value.
To sum it up, a person was allowed to obtain a loan for a
new house that they could only afford for one or two years, with no down payment
and no closing cost, and when the end came, they just walked away. Doesn’t that
sound like renting? Now, with the inevitable devaluation in the real estate
market, many people are walking away from homes that they can still afford, but
see no positive monetary future if they stay.
In 2007 a major turn around took place in the lending
world. With the onset of an escalating foreclosure rate in the subprime, Alt-A
and Jumbo markets, private investors have pulled their money out of the now, too
risky investment, leaving the loan originators nowhere to sell the notes. In
addition to that, hundreds of lenders that dealt specifically in the subprime
market have permanently closed their doors.
The mortgage market today has done a 180 degree, radical
reform, trying to right the wrong thus not exacerbating the problem further,
unfortunately the damage has been done and now it’s time to pay the piper. Just
how much that cost is going to be……..no one knows, but as with most bad events
there is a silver lining. For those who are in the market for a home, this is
one of the best times to buy, and acquiring a foreclosure can save the purchaser
thousands of dollars allowing for a smaller monthly payment or a much nicer home
for much less then market value.
Thinking about buying a Frisco foreclosures, or a bank
owned property in other city around the Dallas Fort Worth area? As a
REALTOR®
I can locate any
foreclosed property in any DFW area city, contact me at
one of the numbers listed below to discuss the possibilities. We can also submit
bids for
HUD homes that are available through
Department of
Housing and Urban
Development.
These homes can be viewed online at
bid select
and can only
be bid on through a licensed
real estate agent or broker.
Jay A Hendrick
William
Davis Realty
8856 Coleman
Blvd
Frisco, Texas
75034
Cell:
214-336-7088
Voice/Fax: 972-248-5991
jay@foreclosuresfrisco.com
www.ForeclosuresFrisco.com
www.RealEstateDal.com
Member: NAR TAR
CCAR
Frisco
foreclosures offer a tremendous amount of value and we also service Allen,
McKinney, Prosper, Plano, Lewisville, The Colony, Sachse, Wylie, Murphy,
Richardson, Carrollton, Flower Mound, and many other areas around DFW.
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