IRVINE, Calif. (UPI) — U.S. foreclosure sales jumped 21 percent in the third quarter from the second, but remain below the same period of 2011, an online real estate firm said.
RealtyTrac, which monitors the nation’s foreclosure market, said the 193,059 foreclosure sales July through September were 3 percent below the same quarter of 2011.
In the quarter, bucking a recent trend, so-called pre-foreclosure sales, which include properties in a stage of foreclosure, but not yet bank-owned, outnumbered REO sales, which stands for real estate owned.
There were 98,125 pre-foreclosure sales in the quarter and 94,934 REO sales, RealtyTrac said. The firm said foreclosures remain a discount market with the average price of REO homes 32 percent below the price of homes not in foreclosure.
The discount window has even increased. In the second quarter, homes in foreclosure were on average 29 percent cheaper than homes that were bank-owned.
RealtyTrac vice president Daren Blomquist said the new buying trend is a result of “both lenders and at-risk homeowners … realizing that short sales are often a better alternative than foreclosure.”
That, however, may change with the expiration of the Mortgage Forgiveness Debt Relief Act, which is scheduled to end Dec. 31.
With the end of the Forgiveness Act, the unpaid portion of the loan balance left on the mortgage could be considered taxable income “in many cases,” Blomquist said.