Will a 'Pre-Foreclosure Wave' Sweep Across the Real Estate Market?

CAMPBELL, N.Y., December 8, 2021 (Newswire.com) - 2022 is coming, and along with it, a pre-foreclosure wave. So says investor and residential real estate expert Cameron Dunlap, of the Real Estate Wealth Network. Housing prices remain at or near record highs and inventory at an all-time low. A homeowner facing foreclosure can sell their home before it goes back to the bank. Hence the term "pre-foreclosure." 

"When a homeowner has equity," says Dunlap, "they want to recover it. They don't want further damage their credit, and can sell their home to forego a loss. Real estate investors look at these types of opportunities to help someone out of a bad situation."

As long as interest rates stay low, demand will remain high. Dunlap also predicts that Mom and Pop investors will see upticks in activity. iBuyers (like Zillow) have exited many major markets. The instability in the market that caused Zillow to exit is not a challenge unique to Zillow. Cameron predicts other iBuyers may also pump the brakes.

"We have not seen a decline in property values. Many homeowners have owned their properties for years and have a lot of equity," adds Dunlap. "Many property owners are in a good place because they don't owe anywhere near what the property is worth. This gives investors and sellers a chance to negotiate win-win transactions. In 2009-10, short sales were prevalent because the vast majority of people in trouble owed more than the property's value. This left short sales, where the bank elects to accept less than they were owed, as about the solution. Today, we have the opposite. The majority of owners in trouble owe less than what the property is worth."

What else could the real estate market see in 2022? Dunlap thinks: 

• Housing values will not change much so long as demand stays high and interest rates don't go up. Dunlap predicts interest rates won't go up at all. He thinks the Fed is unlikely to pull that trigger in an election year.
• Small investors will do very well over the next 12-18 months due to declining pressure from iBuyers, the presence of motivated sellers with an abundance of equity.
• A pre-foreclosure wave will take place because homeowners facing foreclosure have the ability to sell before the foreclosure sale. There are tools to help investors aggregate this data. When notices are posted by the Lender, investors can see easily see and target properties that are pre-foreclosure opportunities. Credible investors want to help the seller recover as much of their equity as possible and keep a foreclosure off their credit. A pre-foreclosure sale accomplishes that.
• In stark contrast to the last foreclosure crisis, homeowner's can sell before it goes to foreclosure. They can save their credit because of equity.

Cameron Dunlap is the CEO of Real Estate Wealth Network

For More Information: Mike Zimov, [email protected]

Source: Real Estate Wealth Network