NEW YORK (CNNMoney.com) — You want to buy a foreclosure? It has gotten a lot harder the past couple of weeks.
The fallout over “robo-signing” — where bank executives sign off on foreclosure filings without reviewing the paperwork to make sure they’re valid — has led to a freeze on foreclosure sales, limiting the number of properties available.
In South Florida, for example, the inventory of repossessions — also known as bank-owned properties — for sale sank nearly 20% between late September and October 18, according to Peter Zalewski of Condo Vultures.
“The whole distressed property market is probably going quiet until the freeze ends,” he said.
But, there are still bargains out there to be had for buyers who are willing to do some extra work.
“The safest and best way to buy is still when it’s a bank-owned property,” said Rick Sharga, a spokesman for RealtyTrac, the online marketer of foreclosure properties. “As long as there’s a clear title and the buyer can get title insurance, it’s a great time to buy.”
In addition to bank-owned properties, there are two types of foreclosures you can buy: 1. pre-foreclosure; 2. sheriff’s auction. All three are affected by concerns over the way foreclosures have been handled.
Pre-foreclosure: These homes are in the foreclosure process, but they have yet to be sent to auction. Owners are typically trying to unload them because they are “underwater,” owing more on the homes than they are worth.