Foreclosures Make No Distinctions Between Property Types

May 5th, 2008

Foreclosures are defying all analysis and predictions by hitting people coming from socio-economic levels. Foreclosures also make no distinctions between property types as it reaches out to embrace anything from condos to mansions.

There is no surety that living in a gated community foreclosures can be forestalled. This is the lesson to be learnt from the sale of a waterfront house in West Knox County. Crown Investments bought the house on Choto Road in 2006 for $1.25 million. But Crown Investments had taken a loan from Sun Trust Bank on which it began to default. This led to the property being foreclosed and sold at a court auction for $865,000. A 30% discount had been offered.

One buyer Ernest Hofferbert refused to make any comments. The two general partners of Crown Investments also kept silent. The attorney of Sun Trust, Thomas Snapp said that he did not know the details specific to the matter and what had triggered off the financial crisis of the borrowers. But this much he knew was that the property was an investment and not used for residential purpose by the owners.

The unit is a gated community in the southwest corner of Knox County. The region sits on a peninsula that protrudes into Fort Loudoun Lake. When foreclosures shot up by 47% from last year it was never thought that the Lakefront houses would come under its dark clouds. But lately this seems to be the trend. The whiplash of foreclosures has made the mortgage companies tighten their belts and jumbo loans are not easily available. The scenario is completely different from what it was a year ago. As a result these upper bracket properties seem to be adversely hit – in fact they are worse off neither buyers nor loans are not easy to get. Who can finance these – even with discounts?

One of the brokers specializing in properties of West Knoxville is Debbie Elliott-Sexton. She comments that recently she has been witnessing a rise in the number of short sales. A short sale occurs when the lender agrees to the selling off of the mortgaged property even if the amount is less than the loan amount. By it the lender is spared time and money consuming foreclosures. It is a loss all right – but a lesser one than if the lender had pushed ahead with foreclosure. Her word of advice is that those facing foreclosures should contact a realtor – somebody professionally qualified to deal with the specifics.

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