I was listening to Marketplace Money on Public Radio this morning and reporter Dan Gretch assured me that I hadn’t missed out on a foreclosed home bargain.  Sadly, I can’t find a link to the clip, so you’ll just have to believe me when I tell you more’s to come. That’s because some banks have been holding off on foreclosures - playing a wait and see game - until they saw Obama’s $75 billion plan to stem the foreclosure tidal wave.

Now that bankers know which homes can benefit from the plan - and those that won’t - they’ll likely take legal action on  those that won’t.

And the good news about shopping for a foreclosure property is that banks are also feeling the pressure of a flooded marketplace and are starting to play ball. 18 months ago if you were shopping for a foreclosed home and asked the bank to turn on the water for you, they would have told you to fly a kite. Today, they’re more likely to honor requests and may even make a few repairs.

A Webdig’s agent can help walk you through this. You can search listings HERE

USA Today ran this 2008 Foreclosures By State heatmap last week, reminding us of a simple truth: Headline statistics can be misleading.

According to data compiled by RealtyTrac, 1 in 8 U.S. homes were in various stages of default or delinquency at the end of 2008.  This is a fact and it was widely reported by the press. 

However, as the heatmap plainly shows, in stripping out just 35 of the nation’s 3,232 counties, we can decrease the number of foreclosures nationally by half. 

In other words, yes, 1 in 8 U.S. homes face mortgage trouble.  In your neighborhood, though, the ratio is likely much, much lower.  Real estate is a local phenomenon.  National statistics rarely apply.

To Search Active Real Estate Listings in Your Area, Visit www.webdigs.com

Foreclosed people that’s who. According to the Wall Street Journal, and other reputable news sources, animal shelters are jammed pack with pets. The reason is that when a home is foreclosed upon families over end up in apartments - with no dog and cat allowed policies.

Taking on an animal companion is a big deal and thinking through the long-term impact isn’t very easy when staring into Fido’s loving eyes. In addition to the obvious food and vet bills, pets really limit their people.

But that being said, I truly miss having a dog. Walking now seems absolutely pointless whereas I went about 3 miles everyday in all types of weather. When I do purchase another home, I’d probably get another Pound gem. In addition to looking at housing on the Web Digs MLS, I also like to browse dogs (cats, too) at animal shelters such as the Twin Cities Animal Humane Society.  That’s where Russel, the dog above, is currently available.

Or you can google a specific breed to find a rescue organization that specializes in a specific type of dog or cat.

The City of Minneapolis has been offering perspective home buyers a financial incentive to purchase in what it is calling “key neighborhoods” in Minneapolis. It’s a program called the “Minneapolis Advantage.” From what I see on the map above and  heard on MPR, those key neighbors are mostly in North Minneapolis.

It gives $10K to buyers to put towards their downpayment and closing cost in an effort to rebuild the housing market in areas were foreclosures are rampant. All funding is fully committed at this time, but plans are underway to continue the closing cost assistance program in 2009.

It’s worth following up on as there are no income guidelines to qualify.This is what $$ recipient Brian Reichow had to say when interviewed on public radio, “Particularly since the requirements for the program were minimal, at best,” Reichow said. “There weren’t any income requirements; you simply had to find a house that was on a block with a boarded or foreclosed home, which is not difficult in north Minneapolis.”

Here have been some outcomes for the pilot program:

Property Details

• Properties were required to be on the block with a foreclosed home: 62% of the properties were foreclosed and 9% of the properties purchased were boarded and vacant.
• 62% of the properties, registered as non-homestead prior to being purchased, now have a homestead status.
• The program had a mix of purchase prices, but more than 50% of the buyers bought homes under $100,000 and 82% purchased homes under $150,000.
• Half of the eligible neighborhoods were in North Minneapolis; 80% of the homes purchased were located there.

And here’s a hidden advantage to buying a house in one of those “key” areas. Often these neighborhoods did not succumb to remodeling crazes that gave us green appliances and lights on wagon wheels. So if you’re big into historic homes with orginial goodies like wood trim, built-ins and old-tyme light fixtures you might find them there.

I heard a story on Minnesota Public Radio by Jessica Madore that just about, at first blush, made me fall off the couch. You can give it a listen HERE.

It’s the idea of good credit homeowner backlash. It goes like this: People who have been paying their mortgages all along get fed up that their neighbors’ mortgages are now subsidized by the government. And they want in.

You probably have heard that lenders don’t even talk about lowering a payment unless you’ve missed a few or at least been late. (This is mostly true, but Citibank announced earlier this month that they are willing to talk to mortgage holders who are current, but the idea of the program is aimed at those with financial hardship. You can read more about Citibank’s Homeowner Assistance Program here.)

Apparently there are folks out there talking about muddying up their credit with some late payments to get into lower rate & payment talks with their lender. I can kinda see where they’re coming from, but it’s nowhere I want to go. I mean, foreclosure, while more common now is STILL a big deal.

And let’s suppose one does decide to “skip a payment.”  The next payment one makes will be credited to the month that was “skipped” - so suddenly, that homeowner is delinquent on the month  just paid.  So once you miss a payment, you’re a month late every month until that “skipped” amount is paid.

Sadly, if you’re not on top of this, this could go on for months before one realizes that they’ve been in the rears for months - all the while trashing their credit. Then when they need a loan for something like a car and they’re “high risk” and paying the price. And it takes years to rebuild from a mistake like that.

So does it suck sometimes to do the right thing? Yeah, it does. That’s about all I can say.

Foreclosure is a hot topic among the press lately.  It’s hard to turn on the television or open up a newspaper without seeing a story about it.

But what’s most interesting about foreclosures is that they appear to be concentrated in just a few parts of the country. 

According to the foreclosure-tracking service RealtyTrac, 4 states accounted for more than half of nation’s foreclosures last month.

And those 4 states — California, Florida, Arizona, and Nevada — share some very similar characteristics including:

1. Their respective popularity with retirees and real estate investors
2. Their large home value increases earlier this decade

In looking at the rest of the country’s foreclosure data, the remaining 46 states combined accounted for just 48.8 percent of October’s foreclosures. 

That’s 1.06% per state on average.

Now, this isn’t meant to diminish the impact of foreclosures on the economy — quite the opposite.  Foreclosures harm to the national housing market because most mortgage lenders are national.  But, we highlight statistics like this to show that the foreclosure “problem” isn’t so bad in most parts of the country, relative.

Furthermore, mortgage lenders are intervening to slow the flow of defaults nationwide.  Following the lead of JP Morgan and Bank of America, CitiMortgage announced a sweeping plan this week to help homeowners avoid default and stay in their homes.

In a way, for as good as this news is for homeowners, it’s equally bad news for home buyers.  As the number of foreclosures decrease in any given market, it reduces the inventory of homes for sale.  Lower supply levels often lead to higher sale prices and less room to negotiate. 

And this may be what the banks are trying to accomplish.