Bone McAllester Norton attorney David Anthony says a Tennessee Court of Appeals decision last week should help lenders bidding on foreclosed assets prevail in litigation after they buy distressed assets. The appeal judges said that a 14 percent discount to a property's appraised value is "commercially reasonable" and thus gives banks the backing they might need in court. But Anthony warns that there's a good chance the new guidelines will be tweaked in the not-too-distant future.
This opinion is creditor-friendly, but not overly so. Keep in mind, a bank conducting a foreclosure must still bid at least 86% of a property’s highest value. Taking into account costs of the foreclosure, the costs of “owning” property, and other administrative costs associated with foreclosure, I question whether we’ll see a later opinion on different facts that affirms a lower percentage (65%-75%).
Tennessee had 2,538 homes in foreclosure for the third quarter of 2012, up 16.9 percent from Q3 2011, according to numbers RealtyTrac released today.
Third-quarter sales of foreclosed homes in the state represented 10.77 percent of all sales, the report shows. Approximately 193,000 U.S. properties either in some stage of foreclosure or bank owned were sold during the third quarter, an increase of 21 percent from the previous quarter, RealtyTrac reports. The number is down 3 percent from the third quarter of 2011.
For Nashville-area numbers, read here.
Home prices in the Nashville MSA rose 2.9 percent in October versus numbers from a year ago, say the researchers at CoreLogic. That's up from about 2 percent in August and less than 1 percent early this year. Excluding so-called distressed sales, year-over-year prices rose 3.7 percent. September's gains, however, were revised to 2.3 percent from an initial reading of 2.9 percent.
CoreLogic's latest data on mortgage delinquency and foreclosure rates show Middle Tennessee consumers and lenders continuing to steadily process the housing bust. The share of loans that are at least 90 days behind (the blue line in the chart below) has come down 45 basis points over the past year while the region's foreclosure rate is at its lowest since July 2010. Both Nashville-area statistics are almost 2 percentage points below the national averages.
Louisiana-Pacific CEO Curt Stevens recently told investors his team is examining plans to boost production capacity to keep up with the rise in home construction. Among the options on the table are the addition of a fourth shift at a plant in British Columbia and the reopening of a large Alabama factory that was idled about four years ago.
The latest building permits statistics digested by the Business and Economic Research Center at Middle Tennessee State University show that the growth in Tennessee building permits is trailing the South's and the nation's by quite a margin — especially with the apartment pipeline growing smaller. You could interpret this statistic in two ways: Either the state's residential builders, still chastened by the recent bust, are being veritable paragons of restraint. Or the shadow inventory of property still held by our banks is large enough to put a damp rag over new construction activity. What say you?
Real estate number crunchers CoreLogic say Middle Tennessee's housing market is gaining strength: Home prices here rose almost 3 percent in September, with distressed sales making little difference. Nationally, year-over-year gains now stand at 5 percent.
Excluding distressed sales, year-over-year prices increased by 2.7 percent in September 2012 compared to September 2011 and increased by 2.0 percent* in August 2012 compared to August 2011. On a month-over-month basis, excluding distressed sales, the CoreLogic HPI indicates home prices decreased by 0.1 percent in September 2012 compared to August 2012.