Foreclosure Freeze Chills Home Buying
The ongoing controversy surrounding foreclosures is taking its toll as homebuyers refused to look at distressed properties in October, and sales suffered from delays, according to the latest Campbell/Inside Mortgage Finance Monthly Survey.
Both the share of home purchases involving distressed properties and average prices for foreclosed properties fell last month, the survey found.
News reports that major servicers were pulling REOs off the market, including some already under contract, spooked would-be homebuyers. The monthly survey found that 14% of owner-occupant homebuyers and 6% of investors refused to view foreclosed properties in October. Homebuyer fear was worse for short-sale properties where 30% of owner-occupant buyers, and 20% of investors refused to view these homes.
Servicing problems disrupted both short sales and REO sales. Survey results show that 24% of closings scheduled for October were delayed or canceled due to issues with , while 12% were delayed or canceled due to REO title issues.
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