During the late 90’s, snapping up an apartment on New York City’s Central Park took a fast pen and a loaded checkbook, but no more: According to a recent New York Times article, luxury real estate in the city is not only depreciating severely, it isn’t even moving now at the bargain prices.
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At the end of 2006 there were about 100,000 bank-owned properties for sale in the United States. Today, thanks to the ongoing tsunami of new foreclosures there are over 700,000, and that number is climbing.
American homeowners are starting to fight back when lenders force foreclosure proceedings.
Many lenders say they are willing to work with homeowners to keep them in their homes, but in practice voluntary loan modifications are extremely rare.
Moody’s lates REAL commercial property price index is a stark reminder of the current financial situation. Showing a 5.5% drop in prices in January, this is the largest one-month drop in the history of the index.
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The number of cases of mortgage fraud reported to the Federal Bureau of Investigation has more than doubled in the past three years, but what is especially troubling is the dramatic increase in reports of corporate fraud. Right now the FBI has more than 560 pending corporate fraud investigations that relate to the mortgage meltdown and the current financial crisis. Instances of individual mortgage and foreclosure fraud are so out of control right now the FBI has a huge backlog of uninvestigated cases, with a 26% increase in reports over last year alone.
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Investing in U.S. real estate has never been more complicated or more confusing.
Sales of existing homes in the U.S. unexpectedly rose 5.1% in February, but prices of existing homes fell another 15%. Most of the homes were sold to first time buyers, and nearly half of the properties sold (45%) were distressed in some way.
