Because Salt Lake City has the 10th largest inventory of U.S. Housing and Urban Development foreclosed houses in inventory, the Salt Lake office is taking drastic steps to sell some of the dwellings.
A seminar was held Thursday in the Salt Palace for those real estate agents involved in selling the HUD inventory of houses, and the subject included incentives for buyers and realtors to reduce the inventory of foreclosed houses to a tolerable level, said Richard Bell, office manager.In the early 1970s, the Salt Lake HUD office rarely dealt with foreclosed properties, but in the last 13 years the number of foreclosed properties in the office was 1,460 in 1987 and is projected to reach 2,100 this year.
Bell's office presently is insuring about 35 new home loans daily, representing an income from mortgage insurance premiums of about $84,000 daily. Bell said HUD is acquiring an average of 9.5 properties daily representing a daily loss of $190,000.
HUD has insurance in force involving more than 88,000 loans in Utah and presently 4.2 percent of the loans are in default. The default figure is better than several neighboring states, which shows Colorado at 8.6 percent, Montana at 6.9 percent and Wyoming at 8.4 percent.
The cities ranking ahead of Salt Lake City in the number of houses in the foreclosure inventory are Denver, Houston, Fort Worth, San Antonio, Tulsa, Oklahoma City, Chicago, Phoenix, Philadelphia, and Anchorage, Alaska.
Bell said the weak economy is the biggest reason the HUD foreclosure list of houses being so long. Three years of continued outmigration of population has created the surplus of single family house," he said.
"With Utah FHA losses averaging $20,815 per property compared with $28,186 for the Rocky Mountain Region, the local office finds an urgency in selling properties as quickly as possible to minimize its holding costs," Bell said.
Another method utilized to reduce the housing inventory is by holding a "Dutch auction" on 15 homes. This means that effective June 10, the price of the 15 houses will be lowered each week until they are sold. Attached to this program is a 10 percent sales commission and $100 down payments to owner-occupant buyers.