Buyers Increasingly Suspicious of Foreclosures

Fewer buyers are willing to consider purchasing foreclosed property than they were seven months ago, according to a study commissioned by Trulia.com and RealtyTrac.

Seven months ago, 54 percent of adults surveyed said they would consider purchasing a foreclosed home. In November, only 47 percent of adults say they’d buy a foreclosure.

The chief turnoff is perceived risk, with 80 percent of those surveyed citing hidden repair costs, a tricky buying process, and the possibility that the neighborhood will lose more value and drag the property down with it.

To compensate for these risks, 75 percent say they expect at least a 25 percent discount and 30 percent say they would only buy if there is a 50 percent discount compared with a comparable home that isn’t in foreclosure.

Other findings:

* 56 percent of single/never married adults were at least somewhat likely to consider purchasing a foreclosed home, down from 60 percent in April.
* 43 percent of married adults were at least somewhat likely to consider purchasing a foreclosed home, down from 50 percent in April.
* 42 percent of divorced/separated/widowed adults were at least somewhat likely to consider purchasing a foreclosed home, down from 50 percent from April.

Source: Trulia.com

Illegal Immigrants Are Good Lending Risks

 

Illegal immigrants can make good home buyers, according to a new study.

Undocumented immigrants — those who aren’t legal permanent residents — who have an individual taxpayer identification number (ITIN), good credit, and proof of tax filing can qualify for a fixed-rate “ITIN mortgage.”

Less than 1 percent of ITIN loans have gone into foreclosure, according to the Hispanic National Mortgage Association. That compares with 1.2 percent for prime mortgages and nearly 11 percent for subprime mortgages given to borrowers with poor credit history, according to the Mortgage Bankers Association.

The Internal Revenue Service has issued more than 12.5 million taxpayer ID numbers since 1996 to foreigners who weren’t eligible for a Social Security number, including visa holders legally in the United States, spouses of U.S. citizens, and undocumented workers.

Community banks and credit unions began accepting the nine-digit numbers from mortgage applicants in 2000, most of them illegal immigrants with modest incomes. Most large banks are still reluctant to accept these numbers. By law, banks must verify customers’ identity, but they don’t have to check immigration status.

Source: Charlotte Observer, Deborah Hirsch