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Bend Oregon Mortgage Defaults Skyrocket

by jimmymoto2006

The Bend Bulletin reported Sunday that the Bend Oregon real
estate market is not doing well.  There were 788 notices of
default filed in Deschutes County for the first six months of
2008.

A notice of default occurs when the mortgage lender files a
notice of foreclosure.  Lenders generally file notices after a
borrower is two to three months behind on their payments.  As
foreclosures increase lenders tend to file notices sooner to try
and cut their losses.

There were 192 notices of default filed in 2007 over the same
time period.  This year's defaults show a 410% increase over last
year.  Prices continue to fall as more bank repossessions come on
the market.

The Bulletin reported that 75% of the notices of default filed
this year were on homes purchases made in 2006 and 2007 at the
peak of the Bend Oregon real estate market.  Not all of these
notices of default will result in foreclosure.  Borrows have an
opportunity to bring the loans current.  If they do the default
notice and foreclosure proceedings will be stopped.

Most homes purchased in 2006 and 2007 are currently worth
substantially less now than they were then.  If a purchaser
bought a home during these years with nothing or little down they
cannot sell their homes and pay off the mortgage.

Some lending institutions are allowing owners to sell their
homes for less than they owe.  The bank takes the loss.  These
are known as "short sales".

If a loan is not brought current after 90 days of the notice of
default the lender will put the home up for auction on the court
house steps.  If the home isn't sold for more that the
delinquency the bank takes possession.  Thus the name "bank
repo".

The increasing number of short sales and bank foreclosures will
add additional lower priced homes to the market and continue the
price decreases we are currently experiencing.  Prices are
currently down approximately 23% from this time last year.

The latest market report for Bend showed that the median prices
of homes rose slightly for June 2008 over June 2007.  Statistics
can be tricky though.  There were 22 homes sold over $500,000 and
one of those homes was a sale for $3,000,000 during that period. 
Naturally that increased the median price substantially.  The
average price per square foot was up also.

The fact is our prices are still falling and will continue to
fall until bank foreclosures slow down considerably.  A decrease
in notices of default will predict a decrease in Bend
foreclosures.  The current amount of notices of default guarantee
more bank repos will be hitting the market this year.

Bank repos can sometimes be a good buy.  The banks have to sell
them to get them off of their books.  Country Wide and other
lenders made mortgage loans of question over the past several
years and they are now coming back to haunt the banking industry.

There are currently many homes on the market in Bend that are
over priced.  The values continue to fall and people won't lower
their prices to market value to sell their property.

Inflation is up.  Gas prices are up.  Unemployment is up and it
seems that interest rates are inching up also.  I don't think the
Federal government will let interest rates get too high.  But you
never know.  They raised them to 16% in 1981.

Keep an eye on mortgage notices of defaults and they will tell
you where the real estate market is headed in Bend Oregon.

Jim Johnson has lived in Bend Oregon since 1981. Call
541-389-4511 or see his web site <a target="_new"
href="http://www.bendoregonrealestateexpert.com">http://www.bendoregonrealestateexpert.com</a>
See more Bend Oregon information at <a target="_new"
href="http://bendoregonrealestateexpert.com/bendoregon.asp">http://bendoregonrealestateexpert.com/bendoregon.asp</a>

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