Zillow will display detailed information on approximately 1.5 million homes that are in foreclosure but are not yet for sale, in a bid to position itself as the go-to web site for homebuyers.
All of the data that Zillow is making available is public information but until now, accessing it typically required buying a subscription to a website or a trip to county courthouses, digging through individual case records. By putting such personal data at consumers' fingertips, the Seattle-based realty website acknowledges it may face criticism regarding privacy concerns.
However, the Seattle-based company views its latest site enhancement, which went live late Wednesday night, similarly to when it shook up the real estate market in 2006 by debuting a site that listing individual home values, called 'Zestimates,' of for-sale and not-for-sale homes. The site today has information on more than 110 million properties. Back in 2006, the stated goal was to make potential homebuyers more market-savvy shoppers. It doesn't see the addition of foreclosure data any differently.
"It's all part of the public record and what the buyer chooses to do with information is up to them and their real estate agent," said Amy Bohutinsky, Zillow's chief marketing officer. "Ultimately, what we're trying to do is help buyers get a better picture."
Anyone who logs in with a free account will have access to the information, which will also include completed foreclosures that have not been listed for sale.
The homes listed in 'pre-market' inventory will be properties where a foreclosure has been filed against the borrower but the action is not resolved. Among the details available for each property will be the address, the date and amount of the original mortgage, the unpaid balance and the dollar amount past due. It also will show the party that initiated the foreclosure action, an estimate of what the foreclosure sales price might be, based on the sales prices of nearby foreclosures, and details of where it is in the process. If the home was previously listed on Zillow as a for-sale home, that picture will be used. Otherwise, there will be a satellite view of the neighborhood.
The borrower's names will not be listed.
When the additional information was added to the site late Wednesday night, it included 11,000 pre-market single-family homes and condominiums just within the city of Chicago.
Home shoppers have a need for the extra information, according to Bohutinsky, because the dearth of available homes listed for sale is constraining the housing market at a time when there are indications that the market has bottomed nationally and mortgage rates remain well under 4 percent for a 30-year, fixed-rate loan.
"What buyers can learn from this is what homes might be listed for sale soon, or they can actually try and buy the home out of the foreclosure process by making an offer to the owner or the bank," she said. "It opens up a whole new category of inventory to people that they didn't know existed."
That so-called shadow inventory has been on the mind of real estate agents for years, as they waited for properties in foreclosure to make their way through the process and return to the market for resale. Foreclosure proceedings first slowed because of the volume of cases and more recently because of various state and federal investigations into how banks handled the cases. With many of those probes behind the mortgage lending industry, lenders are again seeking to push foreclosure cases through the system.
Still, according to RealtyTrac, it takes an average of almost two years to foreclose on a home in the Chicago area, so a property listed in Zillow's pre-market inventory could be there a while before it's officially listed for sale. On Thursday, RealtyTrac reported that foreclosure activity in the Chicago area rose 34 percent from 2011's third quarter. During the past three months, notices of default, the first step in the foreclosure process were filed against 18,923 homes locally.
As information on those properties is entered in court databases, it would be added to Zillow's site, which will be updated daily.
The company calls the addition of pre-market inventory a step forward in 'consumer empowerment." Housing advocacy groups and counselors aren't so sure.
"While, generally speaking, we support disclosure of public data, there is a big leap from the general case to a specific one," said Katie Buitrago, a senior policy associate at Woodstock Institute, a Chicago-based research and public policy group. "It's important to look at Zillow's methodology, data coverage, and compliance with privacy laws before coming to any conclusions. Given that it's not Zillow's goal to help observers understand foreclosure trends but to facilitate real estate transactions, I would be concerned that they are not providing sufficient context for the general public to put foreclosure trends into perspective
Debra Olson, executive director of the DuPage Homeownership Center, worries that the easy access to personal data on homeowners' financial problems not only makes them more likely to receive low-ball offers on homes but may also make them a target for mortgage-related scams.
"Many of the families that come in here that are in pre-foreclosure are able to get it turned around, either through the Illinois Hardest Hit program or through mortgage modifications or other means," Olson said. "I understand that the information is already available through public court records but it takes some real digging. This just seems much too easy for predators."
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