According to the Indiana Association of Realtors (IAR Advocate 11/06/09), it is now Indiana state law that lenders must acknowledge short sale offers within 10 days. Under the 2008 law, lenders then have 30 days from receipt of the offer to accept or reject the offer.There is an on-line complaint form that can be filed with the Indiana Department of Financial Institutions (DFI). The DFI uses the complaints to track and establish patterns with certain lenders and use regulatory authority to investigate.Additionally, the Homeowner Protection Unit of the Indiana Attorney General has enforcement authority over the complaints. The complaints should continue to be filed with the DFI, with the field that the Homeowner Protection Unit should investigate marked (Field #18 on the Indiana complaint).We repeatedly hear from agents that the reason short sales do not move to closing is that it sometimes takes the sellers months to respond to offers.I strongly suggest that every agent check and see if their state has a similar law on the books and let the lender know you know about it when submitting a short sale offer. I know somewhere on our future short sale offers will be a sentence requesting a response by a certain date “per Indiana Statute” as a reminder to the lender that there are statute imposed time limits in place. This would also do to notify the lender of the time limits if they were not aware of them.Perhaps we can use our state laws to move our short sales along and keep them from becoming “long sales”.I also strongly suggest that agents working with lenders as short sale reps make their clients aware of any local or state laws of this nature. Be aware that just like a like a REO AM, the short sale AM is most likely dealing with properties in multiple states and jurisdictions and it is our job to protect them and make sure our clients are within the local laws.
Read more…
By now thanks to recent articles in The Wall Street Journal, New York Times, Bloomberg, CNBC and other media, so called Shadow Inventory has come to the mainstream, but it is more elusive than Sasquatch. Real Estate Agents have been blogging about this for months. For those who may have missed it, Shadow Inventory is the defaulted loans that the lenders are allegedly not releasing for sale. According to Rick Sharga, VP of RealtyTrac “We believe there are in the neighborhood of 600,000 properties nationwide that banks have repossessed but not put on the market” Lawrence Yun, NAR chief economist called it a business decision by the banks “ I believe many banks including Fannie and Freddie, who are holding onto some properties, are releasing foreclosed properties in a measured way so as not to flood the market which they perceive then perhaps could lead them to even more drastic price cuts .So they are releasing properties on a measured pace as a business decision to minimize losses”How big is this Shadow Inventory? Well that depends on what you’re counting, and who is doing the calculations. Some statistics include foreclosures that have been completed, plus NOD (Notice of Defaults), NTS (Notice of Trustee Sales), Strategic Defaults (borrowers that are capable, but not willing to continue to pay on negative equity properties), possible Builder Bankruptcy’s, Vacant lots, Zombie Subdivisions, Commercial Loans, Debt-Securitization Markets, Side-line Sellers, and future Option Arms set to re-set in 2010.The problem here is that no two experts are counting the same. Just as followers of Sasquatch, Bigfoot and Yeti fantastic creatures can’t agree on the details, neither can the forecasters of Shadow Inventory. A recent report from Amherst Securities Laurie Goodman, which took into consideration reports from Mortgage Banker’s Association, Trulia, Core Logic and RealtyTrac led to the report that 7 million properties are in this inventory, and this was not including half of the items listed above. https://www.youtube.com/watch?v=stVgR0SeiQoShe further concludes that 7 million understates the problem because it does not include borrowers that are currently 30- 90 days late in paying, only those which already have received NOD. According to Ms. Goodman’s research, a borrower that misses 1 payment only has a 25% chance to recover, after 2 missed payments 5%, and after 3, only a 1% chance to recover.That is only 2 experts, and quite the disparity between 600,000 and an understated 7 million. Atlanta Federal Reserve real estate expert Analyst K.C. Conway, who is part of the central bank’s Rapid Response program to spread information about emerging problems to bank examiners focused on commercial real estate at a Sept 29, 2009 presentation “Banks will be slow to recognize the severity of the loss-just as they were in residential”In my opinion let’s take the monster out from under the bed, and really look at it. Lenders may have inventory of foreclosed homes that have not been released yet. It may be that the process is taking longer, and the REO departments cannot handle the volume, some may have title issues, some might be in a short sale process, or some may be occupied by tenants that just were granted a whole slew of rights through Protecting Tenants at Foreclosure Act in May 2009. Mistrust of Wall Street and Banks is leading some to a conspiracy theory. As someone who has been a Real Estate Broker for 18 years, and has lived through the Savings and Loan Meltdown, sold properties for the RTC and FDIC, I do not believe they are taking into consideration any of the positives in future-casting. Current foreclosed single family residential property inventory is down. Days on the market from list date to under contract is down. Multiple offers on foreclosed homes becoming the norm. What about sideline buyers pent up demand for these properties? Investment firms and private investors itching to buy bulk portfolios? Housing Affordability Index is at a 20 year high, which brings even more buyers into the market. It will take further stimulus, credit market liquidity, lower unemployment rates, and restored consumer confidence to beat the monster, but it can be done.
Read more…
Posted by Daniel Ripper on October 2, 2009 at 7:02pm
While most of the REO agents in my area sit, twiddling their thumbs waiting for this Tsunami/Shadow Inventory/Wave to hit, I've been blessed with keeping a flow of inventory hitting the market making me one of the more "popular" agents on the block. While this is good for my business, keeping me and my staff busy, I've had the unfortunate experience of dealing with buyers agents who are unhappy, frustrated, or just downright negative. They continously complain, threaten me, tell me how to run my business, even demand me to accept their clients offers! The sad part is some of these agents are within my office! Its a shame agents have to go this low. I simply just take a deep breath and stay focused.Initially I thought it was just me, I mean I'm a down to earth guy, really laid back (don't let the picture fool you) but after talking with some of my peers in the same boat, they were experiencing similar reactions. Recently at the 5 Star an agent on the panel was going over productive ideas and one of them was "don't let the buyers agents control you". I was relieved to know that many of the REO agents are going thru the same issues.If you're a buyers agent on this site and are trying to get into REO, until you get that first listing, here are some tips:1. follow directions. Usually a good listing agent will leave instructions on the MLS. For a better response on your offers, please have your contract packages complete.2. have your lender contacts ready. If a listing requires a specific prequal from a direct lender, have your client in touch with that loan officer immediately. With the shortage of inventory, it is very competitive and timing is a huge factor.3. understand the REO market in your area. If your buyer is an FHA first time homebuyer with 3.5% downpayment competing with investors offering cash 20% over list, your buyer does not stand a chance.4. understand the thinking behind the offer accepted. Just because your FHA, 3.5% downpayment offer was 40% over list price, and didn't get accepted, understand why. Banks usualy have a couple of BPOs done from local agents and a appraisal. Its how they get their list price. Just because your client offered 40% over asking dosen't mean they will accept your offer. We know it won't appraise and don't want to deal with it later in the transaction.Staying in control keeps my staff and I busy as we can spend all day arguing with buyers agents who are not even in contract with us. I hope this helps for everybody on this site. OK I'm done venting. Thanks for reading!
Read more…
•Are you interested in increasing REO?•What about Commercial REO?•Do you know what to say to an Asset Manager?WEEK ONE•Foreclosure Angel Foundation Introduction (Today - Friday)WEEK TWO•8/31/09 - State of the Market•9/01/09 - Explosive Commercial REO Oportunities•9/02/09 - BPO Automation Made Simple and Profitable•9/03/09 - Loan Modification as a Secondary Revenue Stream•9/04/09 - Social Media - The Blogging EffectWEEK THREE•9/08/09 - Foreclosure Angel Foundation•9/09/09 - Putting the 'Short & Sweet' into Short Sales•9/10/09 - Razor Sharp Seling Skills w/Side of Motivation•9/10/09 - How to Attract More Buyers Than You Ever Thought Possible•9/11/09 - Social Media Marketing Strategy for REO AgentsWEEK FOUR•9/14/09 - Office Organization, Systems adn Peace of Mind•9/15/09 - REO Task Management Simplified & Served Hot!•9/10/09 - How to Talk with An Asset ManagerThe best REO coaches in the nation are coming together to benefit the Foreclosure Angel Foundation. For more information go to www.clubtsunami.netBe A Piece Of The Solution!
Read more…
If there's one thing that most of us can agree upon is that as reo agents, we see the best and worst that our great nation has to offer. On any given day, we will be assigned a property whose occupants are in the middle of some of the most heart-wrenching circumstances one can imagine. On that same day, we can also see the worst that society has to offer with obvious loan fraud, property theft and worse. Later that afternoon, we might run into a large and very unhappy dog left behind IN the house....Sometimes the stories we are a part of are hysterical too-A charming ranch-style home in a quiet suburban neighborhood where the living and master bedroom have brand new LEOPARD-SKIN print carpeting or a property formerly occupied by a large male who forgot his Cher wig and evening gown collection.....I love this job because no matter what, everyday is different from the last.I love this job because I get to see ordinary people buy their first homes when only a couple of years ago, they were resigned to being excluded from the great American dream of owning a home.Without question, I have never worked harder but at least for now I have a job where I can earn a good living that doesn't require me to say something like "Welcome to Wal-Mart" or "Would like fries with that?"I've learned more about determining the present value of a property and could move just about anywhere and earn a living as a Realtor because my job has required me to know the fundamentals of marketing and selling a home in just about every neighborhood that there is.That is the best kind of job security.My favorite story so far is helping a family buy their first home in California after coming here from Mexico in 1994, and being able to live close enough to their oldest daughters college so they could also afford for her to attend.The husband is a cement worker and the wife is a housekeeper, neither of which are positions noted for their high incomes. Despite this, in todays market they were able to buy a 4bd/2ba home for 150K in an area that would have cost over 400K in 2006. Was my commission very much? No, it wasn't even close to what I make on some of the nicer homes I am assigned. It was however, my most rewarding sale.What about all of you? Or is everyone else so cynical that it's only about the money?
Read more…
Because I have seen several recent post about OCWEN no longer taking on Listing Agents in CA. FL and, NV I decided to blog on a this recent trend of doing away with the Listing Agent.
Now, before I get started in on this topic, let me make something very clear, I have no first hand knowledge on these situations I will be discussing. I am simply putting together what I have heard, read and understood about the REO industries changing dynamics and how it might effect me or you.
Ok, so, OCWEN is no longer taking on Listing Agents for their properties in CA, FL and NV so, how is that possible?
First off, you need to understand that many of these disposition companies are trying their hardest to figure out how they can grab more and more of the listing agent commissions on these properties. Many companies are notorious for reducing commission, attaching high split percentages or adding un-necessary fees due from the listing agent. The terribly sad part of all this is, many listing agents have folded to these claims on their commission in order to simply close the deal and make something vs. nothing.
Well, these practices have led many companies to logically pursue these commission grabs to their conclusion by asking a simple but, dangerous question and that is, “How can we keep all the commission for ourselves?”
The natural answer to this is to do away with the Listing Agent and keeping the 3% average commission on that side of the transaction. So how can they do this?
Well, they aren’t really getting completely rid of the Listing Agent. You see, instead of having 50 agents to cover a particular county, they reduce their agents down to 3 and then offer them a job to act as their agent, with a steady income and benefits like, retirement, health, dental, vision, paid vacation and more.
So how is this even possible, you may ask. I have one word for you and that is TECHNOLOGY! These companies invest lots of money in developing specific software that can almost manage the entire listing from birth to grave. This software is so highly developed that it can dramatically reduce the number of required agents to work the same, if not more workload than before.
Many REO agents are already using some of this software when you log into your Asset Managers Back Office and input your forms, update your work flows, etc…. All the company has done is taking that software and perfected over the years of use that you as a REO agent helped with.
Now, you’re thinking, “What kind of Realtor would do this?” Well, I can assure you, plenty of Realtors are out there that would give up their commission and work for a company just to do the same job but have, regular income and all the benefits.
So….I know I probably just rained on your REO parade but, it’s important for you to know this industry is changing. REO will not be the same when we end 2009 as it was when we ended 2008.
Good luck, stay safe and hopefully I will see ya on the flip side.
Read more…
Posted by MIRELA MONTE on February 23, 2009 at 11:01am
Agents Using Cheap Lockboxes: A Legal Liability Waiting to Happen?Our MLS lockboxes are very expensive - they cost just above $100. They are computerized lockboxes that take a reading of every agent showing the property. The listing agent can get on the Supra Website (the Lockbox Vendor) and ascertain exactly when the property was shown and the agent who showed it.The agent's name, telephone number and e-mail address is included, so the listing agent can quickly follow up on the showing and see how it went. Staying on top of the showings has been very beneficial to me as a listing agent. Possible problems are ascertained early on and corrected. Objections are addressed promptly and offers are encouraged more efficiently.Our MLS lockboxes are extremely safe: they are programmed to allow access into the property only between 9am and 9pm. Unless the person trying to gain access to the lockbox is a registered, active board member in good standing, he will not be allowed to penetrate the lockbox, which is indeed impossible to break into. Each agent is assigned a special Supra Key that has several layers of pass codes and protections, so that a lost key is virtually useless to anyone else other than the agent the key was issued to.In spite of all the advantages a computerized lockbox confers, many agents in our area do not use them due to their high cost, opting instead for the very unsafe lockboxes priced under $20 and easily available at most hardware stores. These cheap lockboxes have a code you can program for access, a series of three or four letters or numbers. If you give someone the code, they can come back again and again and gain access to the property at any time. If the numbers are not rolled back after the showing, any intruder can also gain access to the property.In my opinion these lockboxes are extremely unsafe, and I will not use them on any of my listings. They are a legal liability waiting to happen and I am perturbed by their frequent usage in our market area. I am amazed that some very expensive homes with high end furnishings have these flimsy lockboxes on. I wonder why the Sellers are not asking their Agents some hard questions...What are your thoughts on this subject?Mirela Monte, Your Myrtle Beach Real Estate Connection Join the Optimist Group!
Read more…
I got a request to do an interior BPO for a house in my service area. D'oh, another listing that wasn't assigned to me. No worries, I really can't complain, I'm busy enough. So I call up the agent and say hey, I want to get in there, what's the combo box code?He says, "I don't know. You know, I don't really work in that area, it's a bit far for me, so I'm having a local agent I work with there put the lockbox on and he's working on getting it trashed out."Ahem. I know the local agent, I'm in an escrow with him now at the moment actually. He's not even with the listing agent's brokerage (the local guy has got his own brokerage).I don't know, that just doesn't seem right. What do you think? I think if you cannot service your own listing personally, which the client has entrusted you with, then you probably shouldn't accept the listing and allow another agent who (like me!) who does personally service his listings to get the job.
Read more…
