It all depends on the laws that govern the state in which you live, however, the average loan is 484 days — or about 16 months — past due, according LPS Applied Analytics (via WSJ.com).

The article provides more context:

“In New York, the average borrower in foreclosure hasn’t made a payment in roughly 20 months. The shortest foreclosure timelines occur in Nebraska and Wyoming, where the average is 358 days, according to LPS.”

Keep in mind that typically if you miss three monthly mortgage payments your lender will likely initiate the foreclosure process.

But, again, it all depends on the state laws (judicial foreclosure proceedings often take longer), as well as your lender. If the lender is jammed up, it could take awhile before it gets to your case — that’s the reason you might see a vacant foreclosure house that isn’t yet listed for sale.

Always proceed with caution and care in a foreclosure situation. Don’t think that you can live rent-free for 16 months! Contact your lender early and often about your foreclosure situation and try as hard as possible to negotiate a mutually beneficial resolution.

To check out nationwide foreclosure laws and procedures in all 50 states click here.

And foreclosures, short sales and other distressed situations looming on the horizon are to blame, according to a report today from the Associated Press, which cites The Standard & Poor’s/Case-Shiller 20-city index.

Here’s the gist:

” … the peak home-buying season is now ending after a dismal summer. The hardest-hit markets, already battered by foreclosures, are bracing for a bigger wave of homes sold at foreclosure or through short sales…. Add high unemployment and reluctant buyers, and the outlook in many areas is bleak. Nationally, home values are projected to fall 2.2 percent in the second half of the year….”

Sounds like yet another perfect storm-like situation.

Here are the major markets expected to feel the pain the most:

• Port St. Lucie, Fla., and Reno, Nev., where prices could fall 7 percent over the next year.
• Orlando and Daytona Beach, Fla., which face price drops of at least 6 percent.
• Las Vegas, which led all declines in the latest report, is also expected to post a 6 percent drop. Home values there have already tumbled 57 percent from their peak four years ago.

This, naturally, will likely create more foreclosure inventory, which typically drives down collective home prices because distressed sales are almost always available for much less than current market value.

In fact, it’s projected that 2.4 million distressed properties will be sold next year nationwide, accounting for nearly half (45 percent) of all home sales. This is of course good news for first time homebuyers, investors and speculators, who can continue to take a “wait and see” approach and strike when the iron is hot.

We suggest checking out our free foreclosure email alerts, which will notify you if and when a great deal in your area hits the market. To be notified all you have to do is click here.

There’s a glimmer of hope for the “Sunshine State” housing market, which is among the five “hardest hit” in the nation.

It was hit so hard, in fact, that investors near and far are now snatching up cheap deals left and right with cold hard cash.

Miami Herald reports today that a staggering 60 percent of South Florida purchases have gone to foreign buyers, pushing pending home sales in July up more than 40 percent in Miami-Dade county alone when compared to the year prior (2009).

Jack H. Levine, chairman of the board of the Miami Realtors, is “encouraged” with the latest numbers.

Here’s a snip:

Read the rest of this entry »

It’s no secret that foreclosures often offer buyers and investors significant discounts on home purchases.

Today, the brainiacs at Massachusetts Institute of Technology (MIT) and Harvard proved it with 12 years of research, revealing that “foreclosure reduces the value of a house by an average of 27 percent.”

MIT economist and study author, Parag Pathak, was surprised with the “large” finding.

Here’s a snip:

“It’s not surprising that there is a discount due to foreclosure. But it is surprising that it’s so large.”

Probate homes, which are those sold after the death of an owner, save buyers about 5 to 7 percent on average. Bankruptcy homes, meanwhile, reduce prices by about 3 percent.

Keep in mind that these are all averages, meaning that you can likely score even greater deals with a quick search on Foreclosure.com.

But we doubt that you would mind nearly a 30 percent discount (at the very least) on your next home purchase.

Yes, it can and will if you stop paying dues.

In fact, 34 states allow Homeowners Associations (HOAs) to foreclose on homes through judicial foreclosure in as few as 10 days (Florida). Of course, there are redemption periods — some as many as 180 days (Texas) — during which homeowners can bring their balances current and keep their homes.

But many simply don’t have the financial means or simply lack the desire to keep tossing precious dollars into “money pits.”

Robert Tankel, a Florida attorney, represents HOAs throughout the “Sunshine State.” He tells CNBC.com that the HOA foreclosure business is “booming.”

Here’s a snip:

“People don’t understand that by failing to pay the association dues they can lose their home and be put in the street…. The associations and their boards of directors have a duty to the people who pay and the duty is to collect the assessments.”

HOAs have bills to pay, too, which is among the many reasons they are so aggressive about collecting dues.

If an HOA falls behind on its payments to service providers, it can affect its ability to attract new homeowners to the community — “big banks want to see healthy HOAs” — and provide services for the homeowners who are paying their bills on time.

HOAs have the ability to move much quicker than overwhelmed lenders.

For example, it might take a lender a year or more to begin the process of foreclosure because of the paperwork backlog. HOAs, meanwhile, can “swoop in, take title, boot the borrower, and either rent or sell the home for a good six to twelve months before the bank comes in with the far bigger lien and forecloses again.”

So if you find yourself in a foreclosure situation, and intend to wait it out until the bank gets around to filing the official paperwork, do yourself a favor and, at the very least, continue to pay your HOA on time.