Kauai Distressed Properties are Driving the Market

The velocity in the Kauai housing market continues its steady growth as more buyers are looking at distressed properties, properties where owners fall behind on their mortgages for a variety of reasons.

Once a homeowners falls behind, a common solution is to pursue a loan modification to make owning the home more affordable. Unfortunately, Loan Modifications continue to struggle along as many island homeowners attempt to use the bank’s programs to stay in their homes. At the moment, a very small % of people are qualifying and of those who get a trial modification, 60% or more of them go into default almost immediately. Even though 650,000 homeowner have qualified for a temporary loan mod, only 1700 have been approved for a permanent modification through the 3rd quarter of this year. These types of statistics tell us that we are going to continue to see more short sales and foreclosures. One in four homeowners nationally are upside down,  one in seven are behind on their mortgage, and one in 22 is actually in the foreclosure process.  The real estate industry is poised to have 2.9 million foreclosures for the year of 2009, and that number will be a new record in recorded mortgage history.

While the stock market and GDP are improving, there is no substantive evidence that our economy will recover unless the housing market stabilizes.  According to the Mortgage Bankers Association (MBAA), the number of mortgages at least one payment behind was 14.41 percent as reported in the 3rd quarter.  The largest share of foreclosures and the biggest driver in the foreclosure crisis are prime rate mortgages, no longer the sub prime. And the luxury home market is being effected as well.  In every category of loans that is tracked, including even VA and FHA loans, one out of every ten mortgages is not being paid.

If you are thinking about purchasing a property in Hawaii that is either bank-owned or in the foreclosure process, I strongly encourage you to work with a professional who is trained in distressed sales and understands the process of working with banks, loss mitigators, and asset managers.  To learn more about the foreclosure process and how to avoid it, regardless of where you own property check out my website, www.kauaiavoidforeclosure.com. As a Certified Distressed Property Expert,  I belong to a network of almost 15,000 Realtors nationwide, who provide invaluable experience to my business and to homeowners, working with every bank that is involved in the home mortgage industry.

If you want to look at some of the newest foreclosure properties on Kauai, check out my Foreclosure Gallery on the Hawaii life website. If you have any questions about the short sale process as a buyer, I’m available to answer your queries.