Property Matters: What An Improving Real Estate Market Means for Foreclosures

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Property Matters: What An Improving Real Estate Market Means for Foreclosures

How will the improving real estate market affect foreclosures?

Written by: Michael Dujovne, Esq. | July 20, 2016

Answer: There will be fewer foreclosures and the properties sold at foreclosure sales will be worth more. There will be fewer foreclosures because borrowers will do what they can to preserve properties if they have equity in the properties or if they are not unreasonably “upside down.” When properties appreciate, this shrinks the deficiency (the difference between the value of the property and what is owed on the mortgage loan). A borrower can pay off a mortgage at any time prior to the foreclosure sale, and more borrowers will have incentive to do so. At foreclosure sales, investors will be able to realistically bid on more properties. Investors do not bid on properties when mortgage lenders are owed more than the properties are worth. Investors will only bid on properties that have equity or can be expected to appreciate to the point that they will have equity. For many years, most properties sold at foreclosure sales lacked equity. The improving real estate market will make more properties at foreclosure sales attractive for investors.

            Michael E. Dujovne, Esq., of Volk Law Offices, P.A., practices in the areas of real estate, business and civil litigation.  VolkLaw is located at 1901 S. Harbor City Blvd., Suite 700, Melbourne, FL 32901.  VolkLaw’s telephone number is (321) 726-8338.  The matters discussed here are general in nature and are not to be relied upon as legal advice in the absence of a consultation with Volk Law Offices.  No attorney-client relationship is intended or created as a result of matters discussed here. Volk Law Offices and its attorneys and other employees make no representations or warranties with respect to the matters addressed.


The matters discussed here are general in nature and are not to be relied upon as legal advice. Every specific legal matter requires specific legal attention. 

The law is constantly changing and matters discussed today may not be the same tomorrow. Legal matters are also subject to different interpretations by attorneys, judges, jurors and scholars. No attorney-client relationship is intended or created as a result of matters discussed here. You should consult counsel of your choice if you have any dealings in these areas of the law. Volk Law Offices, P.A. and its attorneys make no representations or warranties with respect to the accuracy or completeness of the matters addressed.


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