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Efforts are made to entice buyers to the commercial real estate market, including reducing sale prices of REO properties for sale. However, Real Capital Analytics reported that sales of commercial properties, such as retail parks and office buildings, remained in place despite the significant price cuts.

Market data showed that out of 185 REO properties for sale, only about 53 sales for a total of $17.7 billion were completed since last year.

And the worst sales rate was posted in retail wherein only 13 out of the 71 properties on sale were escrowed for an estimated $143 million or $198-per-square-foot.

Meanwhile, hotel sales provided a positive note on an otherwise lackluster commercial real estate market, with 13 properties out of 16 sold since last year or an average price of $256,854 per-square-foot. The total sales volume for the whole deal was estimated at $17.2 billion.

On the other hand, disappointing sales were posted at the office and industrial building market, with only nine properties sold out of 29 REO properties for sale, for an average price of $227,000 per square-foot. Additionally, eight out of the 38 industrial buildings on the market have been sold with an average price of $109 per-square-foot.

Most potential buyers are adopting a wait-and-see-attitude when it comes to purchasing commercial real estate properties. They prefer to wait for the market prices to drop before jumping into the bandwagon.

Industry experts are expecting sharp decline in prices once a flood of commercial foreclosures are release on the market in the months to come.

The hesitancy of prospective buyers to jump into the current commercial real estate market is evident in the case of the 5.3-acre former Klondike Casino property in Las Vegas, Nevada. The property was initially offered on the market for $8 million. However, lack of interested buyers forced owners to remove the price and to consider all sales offers.

Restrepo Consulting Group consultant John Restrepo pointed out that some buyers purchased commercial properties before they go into foreclosures for just 40 centavos on the dollar or much less.

Many commercial properties across the country are on the precipice of becoming REO properties for sale because of the worsening economy which resulted to decline in rents and values, indicating that they are worth more than their total debt.

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A Florida task force reviewing the foreclosure process concluded that the growing REO property listing in the state is due to homeowners’ lack of understanding of the foreclosure proceeding.

Task force chairwoman 11th Circuit Judge Jennifer Bailey said that homeowners in Florida missed out on many alternatives to avoid REO property listing, including federal programs, because most of them do not trust their lenders or failed to understand the process.

According to results of a statewide survey, many distressed homeowners want to work with their lenders to create possible ways to avoid foreclosure. Meanwhile, lenders are developing new types of foreclosure prevention programs and attempting to reach out to troubled borrowers.

However, these efforts proved to be ineffective because many homeowners have little understanding of the foreclosure proceeding, other than its cost, according to Bailey. She explained that most lenders failed to explain the process to distressed homeowners in a way that they would understand it.

The state task force is planning to recommend that troubled homeowners pay for their foreclosure counseling. It also plans to require mediations in all repossession cases.

According to Bailey, many homes will be saved from REO property listing if foreclosure prevention counselors can recommend programs that will best work for the troubled borrower and they can explain details of various workout programs. She added that in this case, more foreclosure cases would be settled instead of languished in court.

Data showed that foreclosure filings in the state rose four times between 2005 and 2007, resulting to case backlogs due to limited judicial resources.

On the other hand, Judge Lee Haworth requires mediation in Manatee and Sarasota counties. Under the rule, distressed homeowners of homestead properties have the option to request for mediation before lenders could file an expedited foreclosure process in court.

The state task force is to recommend to the Florida Supreme Court ways to manage all the foreclosure cases while protecting lenders and homeowners’ rights.

Bailey said that several options are available for homeowners to save their properties from foreclosures. These options include loan modification, mediations and short sales.

The task force plan to use results of the survey to ensure that it has a clear and accurate outlook of the REO property listing crisis.

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In an effort to help contain the number of foreclosure properties in Ohio, Attorney General Richard Cordray filed lawsuits against three foreclosure prevention services: Foreclosure Home Assistance LLC, 21st Century Legal Services and Financial Emergency Inc.

Cordray said the three firms were already ordered to stop offering illegal and predatory foreclosure counseling services in Ohio, but the firms persisted. He asked the court to order the firms to reimburse clients whose homes have been foreclosed and pay $25,000 for every violation.

In Cordray’s suit, he stated that Foreclosure Home Assistance charged $1,500 for each loan modification application it received. The firm also used the FHA acronym in its mail solicitations and promised renters that the deeds of landlords can be transferred to their names once the rental units are foreclosed.

Meanwhile, a court in Cuyahoga County indicted lawyer Dea Character and his partners for forging mortgage documents to obtain $3 million in home loans for seven borrowers. Investigators said Character deceived lenders and title companies by inflating home sales prices and repair costs and submitting false income documents and fraudulent bank account papers.

Character also deceived the borrowers by giving them inflated home sales prices and loan costs to be able to profit from the differences.

In another Ohio court, Cleveland Judge Raymond Pianka instructed banking firm Wells Fargo to maintain its foreclosure properties in Cleveland and comply with building codes by repairing substandard properties or tearing down dilapidated properties.

The court also ordered Wells Fargo to first submit documents indicating compliance with building codes before selling foreclosure properties priced lower than $40,000.

As of April this year, Wells Fargo has 180 foreclosure properties in Cleveland.

Nonprofit housing directors such as Frank Ford applauded the court order, saying that the court action will be an example for all other banks that own foreclosed properties in Cleveland.

Previously, Wells Fargo argued that court requirements would weaken home sales further and would make its properties become vacant for longer periods of time.

Wells Fargo planned to appeal the court’s order, contending that Judge Pianka was biased because he has just attended a meeting on vacant properties.

In December, a unit of Neighborhood Progress, sued to make the courts declare bank owned foreclosure properties as nuisances if they are not fixed.

In response, Wells Fargo reiterated its long record of responsible home lending and preservation of foreclosure properties in neighborhoods.

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Home sales across Northern Kentucky increased in April and May as foreclosure list prices and other housing list prices fell by 21 percent in the region in May, according to real estate sales data in the state.

If you are doing your foreclosed home search, consider cities that care about the conditions of their neighborhoods.

Mansfield, Ohio is eligible to receive about $1.7 million federal funds under the Neighborhood Stabilization Program (NSP). In line with the plan, Fair Housing Director Don Mitchell has requested the city to authorize him to purchase repossession homes from the Department of Housing and Urban Development (HUD) or Federal National Mortgage Association.

Arizona received about $121 million federal funds under the Neighborhood Stabilization Program (NSP) in April. And the largest share of the funds went to the city of Phoenix which received about $39.4 million.

Californians facing financial and repo properties problems may get a boost of help from Whittier Area Interfaith Council’s support group which will start its two and half months sessions on July 1.

Over 6,000 properties in Dallas-Fort Worth Metroplex in Texas were added on foreclosure properties listings scheduled for auctions in July. The figures were 62 percent higher than the same month last year.

Repossessed homes backlog is reported in California in May. According to data, about 111,824 distressed properties in California were scheduled for auctions.