Distressed property sales decline on foreclosure issues facing servicers
Distressed property sales made up a lower percentage of total home sales in February, as mortgage servicers continued to grapple with legal and regulatory issues surrounding the foreclosure process. Overall, investors stepped up their homebuying game last month even as distressed property sales fell, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. The report shows the HousingPulse Distressed Property Index — a barometer of distressed home sales — fell to 47.3% in February from 49.6% in January. While this decline in distressed transactions is typically good news for the market, the Campbell/Inside Mortgage Finance survey showed the most recent decline has little to do with a housing recovery. "[I]t appeared linked to a nationwide delay in the listing and sale of distressed properties as mortgage servicers continued to deal with legal and regulatory fallout surrounding title and paperwork issues," the report said. Financing also remains an obstacle for borrowers, making the movement of distressed properties less robust. The buyers who are finding a silver lining seem to be those paying in cash, the report concluded, with cash transactions making up 33.7% of all February purchases. The National Association of Realtors said Monday existing homes sales fell 9.6% in February hurt by more contract cancellations, as all-cash sales hit a record high and distressed sales continued to climb. Meanwhile, investors accounted for 23.5% of homebuyers in February, up from 19.9% for the two prior months, according to the Campbell/Inside Mortgage Finance survey. "We are seeing investors come back into the market," one agent out of New Jersey said. "One investor told me that one house he wanted came on Wednesday p.m. and had nine offers by Thursday a.m. There are a number of investors and businesses buying up the short sale and REO properties and renovating them and then selling them as traditional sales." Write to Kerri Panchuk.