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Special Call4All this Friday with FDIC and FHFA OMWI Directors

 

Join NAWRB for a sit down with directors from the Offices of Minority and Women Inclusion (OMWI) at the Federal Housing Finance Agency (FHFA) and Federal Deposit Insurance Corporation (FDIC) on August 26th at 7am Pacific/10am Eastern. RSVP now- This will be an event that you don't want to miss! Limited seats!

 

RSVP and get dial-in info by e-mailing info@NAWRB.com.

 

Read the press release here.

Meet the speakers here.

Learn about OMWI.

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Appraisals: Costing Us Equity?

Its not just location location in this market. Much more complex issues drive value of both residential and investment property.

When serious damage is done to an asset class and there is a big re-think regarding its true worth, no one truly knows what its worth, past assumptions may no longer be relevant. So appraisers are shooting in the dark. Without significant sale or leasing activity, it becomes difficult to do comps. And looking back is useless, since we know the data series is completely debunked.

FDIC Lawsuits
The FDIC has taken over more then 200 banks in the last 2 years and is considering legal claims against anyone involved in a bank failing. If an appraiser did an appraisal for a failed bank, the FDIC could look to sue. Many appraisers are concerned that there appraisals may be considered high in light of all that equity loss. Appraisers are afraid that they may seen as having fooled the banks or been party to irresponsible lending practices. The FDIC is rumored to be hiring hundreds of law firms to pursue professional liability law suits.

How Appraisers Are Adapting
They Are Coming In Low

Extremely low appraisals, using the lowest possible com parables, are disrupting the housing market. Taking the position, in uncertain times, that best way for an appraiser to avoid a lawsuit today is to low ball the appraisal. Play it safe.

This is causing home valuations to drop even further and perhaps unnecessary so. see chart The write downs in property values are ranging from 10% to more than 60% and they are impacting performing and non performing property.There is a concern that existing and legitimate equity is not being recognized as appraisers over compensate for fear of a law suit down the road. When you have to refi, as the CRE sector does, this may mean coming up with massive amount of money just as they step up to wary banks. Owners who are selling are finding that these low ball appraisals are causing them to pull property off the markets or sell for even less.

REsourced from www.yourpropertypath.com
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The story continues in Seattle. Another local bank that has had troubles dealing with Special Assets related to their new construction loan departments has gone down again. This bank as many before it fails to recognize that they need to make changes with regard to how they are handling these distressed assets. Many properties are in the wrong hands of Reators who simply do not have the band width or knowledge of how to dispose of these properties. The bank managers are not willing to change, be transparent, or even discuss options. They just sit on their hands as the ship goes under. No surprise for many of us who watch this daily. Some banks are willing to take advantage of well trained and talented Realtors who know how to re position and sell bank owned multifamily properties. See the story below;


Washington First International Bank, Seattle, Washington, was closed today by the Washington Department of Financial Institutions, whichappointed the Federal Deposit Insurance Corporation (FDIC) as receiver.To protect the depositors, the FDIC entered into a purchase andassumption agreement with East West Bank, Pasadena, California, toassume all of the deposits of Washington First International Bank.

The four branches of Washington First International Bank will reopen during normal business hours beginning Saturday as branches of EastWest Bank. Depositors of Washington First International Bank willautomatically become depositors of East West Bank. Deposits willcontinue to be insured by the FDIC, so there is no need for customersto change their banking relationship to retain their deposit insurancecoverage. Customers of Washington First International Bank shouldcontinue to use their existing branch until they receive notice fromEast West Bank that it has completed systems changes to allow otherEast West Bank branches to process their accounts as well.

This evening and over the weekend, depositors of Washington First International Bank can access their money by writing checks or usingATM or debit cards. Checks drawn on the bank will continue to beprocessed. Loan customers should continue to make their payments asusual.

As of March 31, 2010, Washington First International Bank had approximately $520.9 million in total assets and $441.4 million intotal deposits. East West Bank will pay the FDIC a premium of 0.5percent to assume all of the deposits of Washington First InternationalBank. In addition to assuming all of the deposits of the failed bank,East West Bank agreed to purchase approximately $501.0 million of thefailed bank's assets. The FDIC will retain the remaining assets forlater disposition.

The FDIC and East West Bank entered into a loss-share transaction on $418.8 million of Washington First International Bank's assets. EastWest Bank will share in the losses on the asset pools covered under theloss-share agreement. The loss-share transaction is projected tomaximize returns on the assets covered by keeping them in the privatesector. The transaction also is expected to minimize disruptions forloan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.

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Appears that mortgage defaults are still a concern.

See article link below from Market Watch via the New York Times.


http://www.marketwatch.com/story/1401-of-mortgages-delinquent-or-in-foreclosure-2010-05-19?siteid=bnbh


Love to hear your thoughts about the steady supply of foreclosures. I think it is here to stay for the next 18 months. With the initial wave of foreclosed homes, and the general economic meltdown, this overall rate of defaulted homes and foreclosures are not solely based on no doc loans. There has also been a secondary set of loans that have adjusted and reset creating more problems for many homeowners. The third wave is based in part on the job losses and employment cut backs over the past 12-18 months which has effected middle class buyers. When you have homes in your immediate area or neighborhood that are distressed and or foreclosed, the baseline value effects everyone. Then if you loose a job or get your hours cut, making ends meet is an issue. You can't refinance your way out it. And many governmental programs simply are too cumbersome and difficult to work through. So to me this is not a big surprise. As I have mentioned before, link all this with the commercial foreclosure market and "shadow inventory" of FDIC and bank owned new construction projects off the books and records, we have a long road ahead of us. Because every new media event erodes buyer confidence, keeps the lending institutions nervous and restrictive and keeps many people stuck without options.

Love to hear what is happening in your market or state? Thanks Greg
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This same information, but given in a two hour presentation by a totally different source, is a real eye opener of the level of deception being fed to us.

The attached video talks about just one of the 'Sweetheart' deals the FDIC has made. It has similar deals with over 52 banks.

So all the talk about Loan Mods......Window Dressing.

According to DSNews, which by the way has no article about the back door deals being made, but does have several articles on different institutions buying up defaulted loans......gee I wonder why.

http://www.thinkbigworksmall.com/mypage/player/tbws/23088/1006278

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FDIC = MIA

Not too long ago I posted questions about any contacts out there for the FDIC. Several folks were very generous with the information they had and I seriously followed up. I thought I would update you now with what I mostly HAVEN'T been able to find out.Prescient is a mega broker for them but they do only take written applications that should have already been mailed. I wouldn't let that stop me though. Prescient's web site leaves much to be desired. Static links and lots of 'coming soon' features. My impression is that this could take a while. I have a townhome complex I am bird dogging for a client but there is absolutely no one I can find to talk to or submit an offer. I know that the loan was bad and that the FDIC took over the lender. I can't find any deed of foreclosure though and I'm afraid that the FDIC pulled the trigger before the actual sale on the courthouse steps. That could be a problem. Anyone run into this before?I don't know what is going on with them but from my perspective they are MIA. Has anyone been accepted by Precient yet? Are they just going to bundle this stuff and sell it off blind to investors? Anybody? Anything?Thanks for your input.Chris
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Who's got the FDIC???

Several banks here in Ga. have recently been taken over by the FDIC. Unfortunately, one was a previous client with whom I had good relations and had received listings. Guess it wasn't enough - anyway, since FDIC sells the assets not in foreclosure and the reo stays in their portfolio, I am having a devil of a time running down who has what now. Does anybody out there have good information on FDIC holdings? I could use at least a company name here or any thing you have. I'm in the middle Georgia region if that makes a difference.
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