Posted by Michael Howard on September 24, 2009 at 1:30pm
From MSN Money today. BofA and Wells Fargo have both been on the record stating that the "shadow inventory" does not exist. This is the third published report I have read that sates otherwise. As servicers continue to trickle product into the market there is a strong chance that this will prolong the housing slump for more than originally thought. The tsunami we have all heard about, while driving prices continually lower might rid the market of this distressed inventory faster and perhaps hasten a quicker recovery...Thoughts?Analysts say 7 million soon-to-be foreclosed properties have yet to hit the market.Posted by Elizabeth Strott on Thursday, September 24, 2009 8:59 AMAny optimists touting a housing recovery might want to pause and think about this: Amherst Securities Group analysts believe the market faces another major hurdle because about 7 million properties that are likely to be seized by lenders have yet to hit the market.The "huge shadow inventory" reflects mortgages already being foreclosed upon or now delinquent and likely to be and, assuming no other properties are on the market, it would take 1.35 years to sell this inventory based on the current pace of existing-home sales, analyst Laurie Goodman wrote in a note to clients.In 2005, there were 1.27 million properties in the same situation.There have been a number of recent economic reports hinting at a recovery for the housing market. In May and June, the S&P/Case-Shiller 20-city index of home prices rose, the first month-over-month increases in values since 2006. Prices for U.S. homes rose by 0.3% in July from June, the Federal Housing Finance Agency reported earlier this week."The favorable seasonals will disappear over the coming months, and the reality of a 7-million-unit housing overhang is likely to set in," the analysts said, according to Bloomberg News .Meanwhile, The Wall Street Journal reported on Wednesday that real-estate agents and analysts worry that when the shadow inventory is unleashed, it could cause a big bump in the road to recovery and add a new layer of difficulty for the housing market.Ivy Zelman, the chief executive of Zelman & Associates, a research firm based in Cleveland, believes 3 million to 4 million foreclosed homes will be put up for sale in the next few years. The question is whether the flow of these homes onto the market will resemble "a fire hose or a garden hose or a drip," she told the paper.
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Posted by Dawn Lewis on September 19, 2009 at 6:39pm
REOMasters Making a Difference at the Five Star ExpoThe Five Star Default Servicing Conference and Expo officially kicks off September 20th, 2009 and runs through September 23rd. The event is being held at the Fort Worth Convention Center and Omni Hotel in Texas. Steve Forbes is the featured speaker at this huge event for the default servicing industry. The Five Star attendees have many opportunities to network with others in the industry and to sharpen their skills with the Five Star Academics and the Five Star Institute classes.
Many in the default servicing industry are preparing for the next wave or waves of foreclosures to hit the market. In many areas of the country like here in San Diego this will be a welcoming event. That’s right, welcoming. In many price ranges and in many areas of San Diego County California the inventory has had buyers looking at some pretty slim pickings. Many of the first time homebuyers trying to take advantage of the 8,000 first time home buyer tax credit are left in backup offer position to the cash offers. These first time home buyers also come in second place to offers with conventional loans with lots of buyer money in the deal. Some of the reasons for this are that the asset managers and banks like to accept the cash offers and large downs because they have less of a chance of falling out of escrow due to loans falling apart and appraisals not coming in at loan value. A symptom of the market.Foreclosure moratoriums are being lifted in some areas of the country. California for instance has the California Mortgage Foreclosure Prevention Act that was signed by the Governor on February 20, 2009. The California Foreclosure Prevention Act modifies the foreclosure process to provide additional time for borrowers to work out loan modifications while providing an exemption for mortgage loan servicers that have implemented a comprehensive loan modification program. Civil Code Section 2923.52 requires an additional 90 day period beyond the period already provided before a Notice of Sale can be given in order to allow all parties to pursue a loan modification to prevent foreclosure of loans meeting certain criteria identified in that section. A mortgage loan servicer who has implemented a comprehensive loan modification program may file an application for exemption from the provisions of Civil Code Section 2923.52. Approval of this application provides the mortgage loan servicer an exemption from the additional 90-day period before filing the Notice of Sale when foreclosing on real property as designated by this Section.This next wave of foreclosures as it’s called by many in the default servicing industry has been described by some in the know as a Tidal Wave or Tsunami. Many are wondering what effect it will have on the fragile real estate markets throughout the United States. I welcome the wave and the faster we get through this stagnant inventory the better off the whole real estate and economic environment will be. This elephant in the room, the massive foreclosures that are not being put on the market has to be dealt with. Let’s push through and push on and get through this and on to the next real estate market. I’ll take and sell as many assets as I can to help with the situation. So any asset managers or banks that need an REO Listing Agent in San Diego County California call me – Dawn Lewis 619-981-3917. I joined REOMasters Network to not only be associated with some of the best REO Agents and Brokers in the industry but to network with them to offer the best of solutions for asset managers and banks.REOMasters is sponsoring the biggest Charity Event at the 2009 Five Star in Fort Worth. I was very surprised to see that it wasn’t on the Five Star Conference Schedule. The event is called Club Tsunami – The World’s Largest REO Networking Party and Charity Event. All of the profits from the proceeds of the Tsunami Party go to Foreclosure Angel Foundation. Make sure you read about the Foreclosure Angel Foundation and the difference they are making in the lives of families losing their homes. Your ticket purchase will have a direct impact on helping families stay in their homes. This event is sponsored by REO Masters and is a must make event. It will be a NIGHT TO REMEMBER. Make sure you put this event in your BlackBerry and DON’T MISS IT.
When: Monday, September 21st, 2009Where: City Streets Night Club (22,000 sq/ft) 3 blocks from the Five Star Convention)Who: This event is open to agents, brokers, lenders, asset managers and other attendees of the Five Star conference.Time: 8:00 PM to 2:00 AM (All night Long!)To GET TO THE PARTY take the Club Tsunami busses from the Fort Worth Convention Center, Main Street entrance. Busses will travel back and forth from 8:00 PM to 1:00 AMAdmission: $75.00 Advance Registration ($100.00 at the door)Must bring ticket to event. No ticket. No entry.REOMasters™ Network – Get Your Tickets by Calling(866) 446-2977 x 202Register here!Read more…
Take a look at this press release. PRESS RELEASEBe a Piece of the Solution. Over ONE MILLION AMERICANS have lost their homes through foreclosure. We know what the problem is, the REO Masters Network is asking REO Agents to Be a Piece of the Solution.The members of the REO Masters Network are hosting what will be the Largest Networking Party and Charity Event in the REO Industry and the proceeds are going to the Foreclosure Angel Foundation. The Foreclosure Angel Foundation is a non-profit agency that is helping people who have genuine hardships stay in their homes, get their homes back or get them back into a home. How can we as REO agents help? Support the cause.I realize that not all the REO agents in the country are going to FiveStar (although it may seem that way), but those of you that are...buy a ticket, come to the event and have some fun. You are contributing just by buying the ticket.Those of you that aren't going to the FiveStar conference can still buy a ticket as a donation to the cause. If you aren't willng to do that, then contact the Foreclosure Angel Foundation and tell them you are willing to do some "leg-work" in your area if they need it. Who knows, there is likely to be someone in your area that Marilyn from the Foundation is trying to help. She can't do it all by herself.Here's a good example, Harry Mallinger, who's wife recently died from a brain tumor and has two mentally challenged adult sons lost his home. Now Marilyn is trying to find a home for him in Florida. This is just one of the MANY stories.None of us can fix the problem on our own, but together we can make a difference so please, Be a Piece of the Solution.
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There is a group of REO professionals who do care! And they are pulling together to benefit the Foreclosure Angel Foundation. This foundation came to life from an unselfish act to help a neighbor and we want to be the foundation's next neighbor.There will be a series of coaching sessions that will culminate in the largest REO network party: Club Tsunami. The sale from the tickets will go 100% to the Foreclosure Angel Foundation. And it gets even better. The coaching sessions are free and if you missed any, you can download them. Come join the party!Be a pice of the solution!Read more…
5. Network with REO agents from across the nation at Club Tsunami.http://www.clubtsunami.netHaving a network of REO agents as a resource is a must to increase your business and knowledge of the REO business. You can call upon your network of other reo professionals when you have a question about a REO company that you've just started working with, need cash for keys advice or want to compare ideas for how to best grow your REO business.4. Network with Asset Managers to increase your business.http://www.fivestarconference.com/Asset Managers attending the 5 Star Conference in Texas are not going to want to miss the fun and excitement of Club Tsunami. Meet asset managers in a relaxed and fun environment.3. Have Tons of Fun at Club Tsunami!!!!Club Tsunami offers 3 D.J.'s., 2 Night Club Dance Floors, a Casino Room, Cigar and Scotch Lounge, VIP Room, Top Shelf Bar and Dancing all night long!2. Network with the State and Executive Directors of ReoMasters Network.http://www.Reomastersnetwork.comThe REOMastersTM Network has partnered with the nations top REO coaches and industry leaders to engineer a life and business success REO coaching and marketing association ... being built by agents, designed for agents, and owned by agents.1. 100 % of ticket sale profits benefit an amazing charity: Foreclosure Angel Foundation.http://www.foreclosureangelfoundation.com/Marilyn Mock, the founder of Foreclosure Angel Foundation, makes it her life mission to help her fellow Americans keep their homes when they have no other place to go. Have fun at Club Tsunami and help to support this amazing cause.Club Tsunami is the place to be at the 5 Star Event to have fun, network and benefit a great charity. Don't miss out!http://www.shawnbradfordteam.comRead more…
At some time in life, many of us were told we have no business complaining about things in life that we don't know about, don't participate in, or don't help to make better.I'm paraphrasing a few examples here ...Obama has said it - "I can't do it alone. I need your help."My former CEO said it "Bring me a problem, and bring me a solution."My former boss said "Great point - you are in charge of fixing it."My REO Masters Co-Founder Scott MacLaine said it "This is an organization where members don't join and expect success to happen, but have a hand in making a difference."I'm down with this philosophy (i.e. in agreement) because it just makes sense. It's practical. But I'll let you in on a secret - The other day I did happen to fall off my high horse and complain. It all started in court, where I'm spending way too much time lately.In my role as an REO Broker, I am frequently asked to appear in court as a witness for the bank at unlawful detainer hearings. A few weeks ago, the defendant actually showed up. This couple pleaded to the judge about saving their home, doing a loan modification, whatever it took, they were committed. The judge had to explain, as delicately as he could, that it was too late and that the bank filed to gain possession of their property. He granted the couple 2 weeks to vacate. Within the two weeks, the couple managed to get a relative to get qualified to buy the house. The bank agreed to go into escrow, knowing full well the relative was purchasing the home to enable the former defaulted borrowers to stay in the house. If escrow closes, the occupants essentially will have been awarded the mother of all loan modifications since the new purchase price and interest rate are well below what they were when the couple purchased the home at its peak. And the big bonus - the occupants have not paid their mortgage for about a year!Since the bank is the decision-maker, I happily facilitated all this. And then scratched my head and said ... What the ??? How do I get a deal like that???OK forget about me - what about all the other people in need? What about my client who suffered a rare disease resulting in a bone marrow transplant and a short sale because there was no loan modification that could help?I don't begrudge the couple fighting for their home. I don't know them. Maybe they are great people and this is Karma coming around to help. I may never know. But I am pretty certain that in this unprecedented real estate climate, the stories, the backgrounds, and the behavior behind those who have lost their homes are as diverse as one can imagine.Can we really blame government or banking institutions for helping those less deserving, or foregoing those in real need? Maybe not if:1) Policies are helping to solve the problem at large on a high level.or2) I'm not part of the solution.Enter the Foreclosure Angel Foundation. This is not my idea so if am insinuating that I am part of the solution, well, let me disclose that I'm merely outsourcing my contribution to the solution by supporting Marilyn Mock, founder of the Foreclosure Angel Foundation. This is an amazing lady who has started a foundation to help the neediest of those in foreclosure. You may have heard the expression "Think Globally, Act Locally." That's how Marilyn got started. She saw a problem and jumped right in. Never complained to anyone on behalf of the victim, never complained about the cruelty of the world, just took decisive action.I first saw her on Oprah (my wife made me watch it) and then when the founders of REO Masters announced the organization's support for Marilyn and the Foreclosure Angel Foundation, I was thrilled. The support will kick off with a fundraising event at the Five-Star Conference in Dallas later this month.Complaining feels good. But being part of the solution feels even better.
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•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!
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I've chatted with a few of you about the new NAR Certification course in Loss Mitigation. I got mine today and here's the scoop. Not much. I'm tremendously glad that NAR is doing something to address the reo segment. Obviously it's not going away any time soon even if it does slow down and the banks do a 180 and start helping people modify. That being said though, this course doesn't merit much in the way of certification. (Shhhhh. don't tell anyone I said so since I will proudly display my certificate).The biggest problem as I see it is the fact that it seems to be a 101 course and I think it would be much more effective if it were expanded and then done in two parts. My class had about 30 people and it was about evenly divided between those who were actively involved in REO and those who thought it might be a good thing to try. It is a good thing to try but the class that explains what cash for keys and trashout is should not be the same class that tries (not very well) to explain the intricacies of a short sale or a comparison of data upload platforms.I'd really like to see a weightier Certification that a beginning/intermediate/advanced level would bring. I also think they focused on short sales too much and as we all know there are few hard fast rules for those. They made some very good points about liability though and emphasized why all the T's must be crossed and I's dotted. Who has taken this so far? What are your thoughts?
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These are staggering numbers. I heard a lecture from an analyst from Anderson School of Business at UCLA which was a bit gloomier than this but these are some of the gravest predictions I have seen in print. Will we see more aggressive programs from the administration to combat the forecasts? The various moratoriums so far have had less than robust results. A contact at Wells Fargo tells me they have had less than a 1% success rate in loan mods. I can't see a substantial turn around until at least 2013, any thoughts?From Housingwire.com.By AUSTIN KILGOREAugust 6, 2009 4:18 PM CSTDeutsche Bank (DB: 66.81 +3.39%) believes continued declines in home values will increase the number of US mortgagors with negative equity from 14m in Q109 to 25m in Q111.According to a report Deutsche released this week, the 25m represents a projected 48% of all US mortgages. While subprime and option adjustable-rate mortgages (ARM) are the biggest source of underwater borrowers in the current market, Deutsche said a larger percentage of prime conforming and prime jumbo borrowers will join the fray.Prime conforming and prime jumbo will make up 79% of all US mortgages and Deutsche estimates 41% of conforming and 47% of jumbo will be underwater, up from current levels of 16% and 29%, respectively.This rapid influx of underwater borrowers will have a significant impact on default rates. In addition to future underwater borrowers being forced into default from a “life event” — unemployment, divorce, disability, etc. — Deutsche warned others may “ruthlessly” or strategically default.Increased defaults in the middle class will suppress consumption, added Deutsche, further slowing housing recovery.It’s hard to predict exactly how high the default rates will go. The current housing recession is unique in that it was brought on and perpetuated by a number of factors — unstable loan products, crashing housing prices, and unemployment, among others. Deutsche cited a study of the Massachusetts housing decline of the late 1980s and early 1990s that showed less than 7% of underwater borrowers defaulted as perspective on the default rate for underwater borrowers.But in the early 1990s, borrower and loan product quality were significantly better, the home price decline wasn’t as severe, and unemployment was lower. Deutsche said the 7% experienced in Massachusetts should be the floor — a best-case scenario — for the surge of underwater borrowers it expects in 2011.Borrowers with loan products with already high underwater rates will only get worse.By 2011, Deutsche predicts 89% of option ARM borrowers will be underwater, up from 77% in 2009. The rate of underwater subprime borrowers will increase from 50% to 69%, and underwater Alt-A borrowers will increase from 49% to 66%.An important factor to consider is how deep underwater borrowers will be, and it depends on their loan type.For prime conforming borrowers, Deutsche predicts the number of borrowers with negative equity — loan to value (LTV) between 105% and 125% — will virtually equal the number of borrowers with what it calls “severe negative equity” — LTV over 125%.But Deutsche expects the 89% of option ARM borrowers underwater to be split with most — 77% of total option ARM borrowers — holding severe negative equity. For underwater prime jumbo loans, more borrowers will have severe negative equity — 29% of the combined 47%.The split for underwater Alt-A borrowers is expected to take an opposite proportion, with 49% of all Alt-A borrowers in negative equity and only 18% in severe negative equity. Underwater subprime borrowers will face a similar breakdown.
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For the past 3 years my life has consisted of one thing - researching REO. Every aspect of REO that is. When you have thousands of members and clients that depend on your company for results it can be a daunting thing. Especially when the government makes over 20 changes to the TARP program within 9 months!The past 3 weeks have been dedicated to the development of our new levels of training (2 and 3) which are going to be geared towards the REO Masters Network directors. The way that this network is being designed resembles an undergraduate and graduate program. With the REOM being the "graduate" program I had to step it up a little bit with content. So, with that end in mind I began with a "State of the Market" initial presentation, ended with a "Future Projections" summary and then sandwiched some cutting-edge REO stuff in between. I should have given myself 3 MONTHS!I can say that I've learned a lot, which is always a great thing. I was kind of waiting-out the whole government involvement of real estate until the dust settled so as not to fry any of my mental circuitry. I watched from September 08 through March of 09 as colleagues were trying to decipher the realities of the real estate market, TARP, the Financial Stability Plan, "Making Home Affordable", HOPE NOW, and the mergers of banks left and right. In my little universe I was telling myself the whole time, "just keep track of everything, but don't try to figure it out yet". Whew! Glad I made that decision and stuck with it.Fellow professionals I'm here to say that this market is absolutely, undoubtedly one of the craziest markets in American history. Go watch some of the real estate market videos on YouTube of Mark Zandi of Moody's or Glenn Beck (whatever your personal opinion may be, these guys toss out some pretty indisputable stats).Oh, and if you have a couple of minutes, check out the Wall Street Journal's take on the history of the meltdown (there are 3 parts, but I'm only embedding part 1):OK, back to the think tank.Sincerely,Dan Waterman
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Isanti Rocks! Last night there was a chance for anyone interested in learning more about the options offerred by the City of Isanti for homebuyers who would like to help clear the foreclosed properties sitting empty in the city proper. Only six of us showed up, two contractors, a lender and a buying couple (my new clients!) The city has been granted over 500K to use as downpayment assistance in the form of 0 interest loans, which are forgiven after set terms (5 years, 10 adn 15 depending on how much the 'loan" is). There are two programs, which can be used together. $12,500 in Incentive based Downpayment assistance, for anyone purchasing a home that has been vacant 90 days. $15000 for needs based downpayment assistance based on a 29% front end ratio. There is also a rehab loan for up to $30,000! They are still looking into the possibility of using the Greater Mn Housing fund $10,000- $12,000 loan in conjunction.Greater Mn. Housing Fund is for purchase of a foreclosed, OR SHORT SALE property. Must be in an incorporated city, have city sewer and water. Must complete homebuyer course, must be able to qualify for a mortgage, and must have an inspection. Income guidelines for Chisago and Isanti:Family size 1. 47,100 2 53,800 3. 60,500 4. 67,200 5. 72,600And, for first time homebuyers, this does not affect the $8000.00 tax credit!I have two buyers going out today..the money needs to be used or lost!
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Not sure about the rest of the pros on REOPRO, but as someone who does BPOS, I just got quadruple the requests for them today, in a big, big way. Some requests from folks, I barely get any from. All exterior BPOs... and I live in a rural area.Not sure what you guys will make of it, but to me, it looks like the Summer Flood.
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If you think solving our foreclosure crisis in this country is by conducting State or Federally mandated moratoriums…well, you are completely misguided.
Try looking at the moratorium issue as strictly a monetary policy vs. a politically correct policy.
We all know foreclosure cost money and, it isn’t cheap. We also know the longer a home stays in foreclosure or the longer a bank has to hold onto bad debt, the more expense the bank takes on in Attorney fees, public notice cost, city and state filing fees, property maintenance fees and so on. The more cost the bank takes on, the greater the bank’s loss, and that leads to the bank’s requiring higher credit scores to get a loan, higher interest rates, higher down payments and so on. My point is, all that loss is passed onto the consumer through other ancillary fees which makes the general cost of banking more expensive. In other words, the rest of us will end up paying for these moratoriums in the long run so, why make that cost any more expensive than it already is?
Now in some cases, like the federal government using moratoriums, some people argue it is necessary to do everything we can to delay or trickle in the foreclosures because there are just so many that if they all came in at once, it would crash the economy in a way we haven’t seen since the Great Depression. I am no “REO Oracle” as one member once sarcastically but humorously joked (at least I think he was joking…I hope he was joking….maybe he wasn’t joking…either way, it was funny) but, I do believe that trickling in the inevitable does nothing more than create a long drawn out crash over many years. What would you prefer…a 10 year recession / bear market or a 3 year depression? I know what I would prefer and, I am not sharing because the hate mail would come in droves….lol, it really would.
So, why do I keep saying, “the inevitable”. Well, the truth of the matter is that from my own experience with Foreclosure Avoidance Counseling, Loan Modifications, Short Sales and REO’s, I can tell you that these banks are still doing HIGH RISK LOANS. That’s right, you heard me correctly….HIGH RISK loans are still being used widely by many Loss Mitigation Departments that are doing loan modifications and other workouts to help preserve homeownership. The reason they are still using these HIGH RISK loans is because it’s the only way they can bow to the pressure of government to do all they can to preserve homeownership. Once again, the government is stepping in, forcing banks to make risky loans or in this case, loan modifications, that end up foreclosing in 3 months anyways. A recent Fitch Ratings survey acknowledge this fact that I had been seeing in my own business. I don’t have the survey in front of me at the moment and am working from my memory but, I believe that Fitch statistic was somewhere between 60-70 % of those who complete loan mod’s end back in foreclosure in 3 -6 months. Just so you know, in the past 12 months, I have had over 40 individual Foreclosure Avoidance Counseling sessions and out of them, almost half went back into foreclosure in less than 3 months and almost all of them ended up in default in less than 7 months.
Towards the start of this blog, I told you I wasn’t going to share my opinion on moratoriums but, if you haven’t figured it out by now…….well, read this blog a couple and hopefully you will get it. Ok, I will spell it out, moratoriums suck!
All a foreclosure moratorium is, is a political tool to win votes, at least that is my opinion.
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FIVE STAR EAST COAST EDUCATIONAL CONFERENCEI had the good fortune to attend the Five Star Conference in my own backyard, Miami, FL from May 27-30th.My only expectations going in were to learn some things from both the classes and from networking with collegues from across the country.The conference blew me away! The courses were taught by professionals in their fields including: Mary Abarca, VP of REO at PMH Financial, Loetta Arrington SVP at Field Asset Services (FAS), Maro McKay, VP and contract manager for multiple non-government REO clients (Asset Manager) at First Preston, the list goes on.There wer only about 400 agent attendees over the four days, so I had the opportunity to meet and share ideas and information with many incredible people. A few were just getting into the REO market, with the majority being seasoned REO agents in their areas.The energy level and exchange of ideas was electric and I could not wait to get there each morning and did not want to leave at the end of the day. I went home vibrating with excitement and teeming with new ideas.Prior to attending the Five Star REO event I had not planned on going to Five Star's Conference in Texas this September, now I cannot wait. I am sure the conference will be wonderful, but I am most excited to get there two days prior to take two more Five Star Courses and have that intimate exchange of ideas and information that is not always easy to get during the frenzy of a conference setting.The best thing I learned was that First Preston will soon be offering approved short sales and will need a lot more REO agents nationally (Embarrassingly I had not even applied prior!). The best thing I was able to share due to my close work with our city and country government is about the NSP funds and how we can help our community by assisting them in accessing these funds that must be used to acquire REO properties to help stabalize our neighborhoods.HAPPY HOME SELLING!Ellen Bithell, CRS (soon to be a five star designee)RE/MAX EXECUTIVE REALTYSELLING SOUTH FLORIDA
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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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Foreclosure starts are continuing to rise to record highs but total delinquencies fell in March to 7.88%, a month-over-month decrease of 5.8%, according to the April 2009 LPS Mortgage Monitor from Lender Processing Services, Inc., Jacksonville, Fla. The seasonal February to March decline in delinquencies in the five years from 2002 to 2007 averaged 14%, and the number of newly delinquent loans saw a greater decline in March compared to 2008. March's foreclosure rate was 2.52%, reflecting a month-over-month increase of 12.8% and a year-over-year increase of 87.8%. The percentage of loans improving in status continued to increase in March, while loans deteriorating in status declined. The report said foreclosure starts in March hit new all-time highs across every major product category. The largest 12-month increase was seen in jumbo loans at 221%, non-agency conforming loans at 158%, and agency prime loans at 144%. Foreclosure starts on portfolio loans spiked significantly during the month, the company said. GMNA was the only investor category to remain stable for the month. LPS said foreclosure sales dropped significantly in March, due in large part to the reinstatement of the FHFA moratorium in February and continuing through the end of March. The report said refinance activity remains high, with a slight increase in available liquidity to borrowers who are 30-days delinquent.
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Fifteen new foreclosed or short sale homes came on the market, about one in every six homes being listed in the Prescott Arizona Area MLS system, and one quarter of the closings were distressed sales in Prescott, Prescott Valley, Chino Valley, Dewey-Humboldt and the outlying areas of Yavapai County. This shows a marked decrease from last week’s numbers.The difference between what newly listed traditional homes and Prescott foreclosed/REO and short sale properties per square foot remains large at a 40% discount.News has been mixed last week with positive housing numbers coming out of California and the Phoenix area, but news of more foreclosures on the horizon as load modifications fail and banks are removing moratoriums on foreclosures. Watch this space for more info!The percentage of foreclosed/REO/short sale new listings on market increased from 17% to 18% this week. Last week 48% of the pending sales were REO or short sales, and this week they made up 33% of the deals going into escrow. The percentage of REO/short sales that closed last week went from 56% last week to 26% this week. REO/short sales sold about 92% faster than traditional resales.See the full report on our main web site.You can get this report sent to you via email. Sign up here.Read more…
http://money.cnn.com/2009/03/26/real_estate/California_comeback/index.htm?postversion=2009040311I find it incredible that the media continues to have NO IDEA what is actually happening in the real estate market. The same media that help deepen the chasm of the market fall with headlines telling everyone the sky was falling at first sign of a market slow down two years ago. Now they want to overlook that vast majority of economists who predict we are going to be mired in this until mid 2011. California? California has just begun to feel the pain that’s coming. We will now see areas previously un-effected have their own foreclosure challenges. Check the amount of NOD's or the number of short sales in the MLS in affluent South Orange County for instance. I am glad the major newspapers and publications are no longer banging the drum for the death march but now as then, a little more truth in message seems to be in order.
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The REO (real estate owned) foreclosed home market is hot right now in the Prescott area with many homes priced under an already depressed market price.When banks price REOs under the market price, multiple offers are often the response. This means buyers can be up against stiff competition for that bank-owned home.It’s not unusual for some bargain-priced REO homes in the Prescott area to receive 3 or 5 offers. Sometimes the bank will throw out all but two offers and then ask the selected buyers to resubmit what is called “Highest and Final” offer. Sometimes the bank simply accepts the best offer at inception, or they can start over. Fun isn’t it?If you’re wondering how you can make your offer rise above all the rest and be the winning offer, here are the top 10 tips to win the REO multiple offer game with right packaging, price, terms and conditions:1. Know What the Bank Note Is For and What they PaidAsk your foreclosure buyer’s agent to find out the bank’s purchase price on the Trustee’s Deed. Compare that price to the price the bank is asking. Then, look at the amount of loans that were once secured to the property. Usually, the amount the bank will accept is somewhere between the original mortgage balance(s) and the foreclosure sale price. BUT, don’t put TOO much emphasis on these numbers when they are low. It a property is worth $300,000 and the bank is holding a note for only $100,000, they are not going to take $100k for it. They not not against making a profit on the rare occasion when they are not upside down. They’ll likely hold out until a reasonable offer appears.2. Know the Comparable Sales DataMake sure you know what properties have been selling for in the immediate area, both REO and traditional sales. The bank already got this data when they received their Broker Price Opinion (BPO) to determine the listing price and might have another BPO once the offers were reviewed. If the comparable sales for REOs has been $120/sqft in the neighborhood and you are offering $90/sqft, you can expect a counter at best and most likely will never hear back from the bank.3. Do an Analysis of the Listing Agent’s REO Pricing RecordMost REO agents focus as listing agents for REOs, and often they do not list any other type of property. Since REO agents deal in volume, they typically apply the same pricing principles to all their REO listings. Have your foreclosure buyer’s agent pull the history of the listing agent’s listings to determine the list-price to sales-price ratio. If most of those listings are selling for, say, 5% under list price, then you will have some guidance as to how much you need to offer.4. Know your Competition - Ask About the Number of OffersIf there are no offers on the REO home, you can probably offer less than list price and get your offer accepted. However, if there are more than two offers, you may need to offer above the asking price. If there are 10 offers, bear in mind that some of those offers might be all cash. Banks like all cash offers. If you are obtaining financing, then you may need to increase the price on your offer to be considered.5. Prepare an Offer Summary as a Cover SheetThis is aimed at simplifying the process for the Asset Manager, who, will more often than not, have 400 - 500 properties under management and often in multiple states with vastly different real estate contracts. This cover sheet will have the basics only (Price, Terms, Concessions, Closing dates, etc.).See a sample cover sheet. If you are an agent and want one emailed to you in Word format, just contact me.6. Choose a Closing Date Before the End of the MonthTry to have close of escrow on or before the 25th of the month. Banks are assessed their handling charges on the first and if they have not received the check before the end of the month then there is an additional charge for them.7. Submit Your Loan Status Report or Proof of Funds with your OfferIt goes without saying that you do not want to submit an offer without showing the REO manager that you have the means to purchase the home. If you are getting a loan, then it’s of paramount importance to submit the Loan Status Report (LSR) with your offer. If you are paying cash, you need to show proof of funds. Often buyers submit copies of money market account or bank statements (with the account numbers obscured) to show that they are capable of completing the purchase.8. Give Enough Time for the Bank to RespondUnlike homeowners who are typically working on one transaction at a time and can respond within 24 or 48 hours, REO asset managers usually hundreds of homes they are trying to dispose of. And since many of these are getting multiple offers, the amount of workload can be be overwhelming. This is why we suggest allowing 7 - 10 days as the response time on offers. Sometimes responses will come much quicker, but other times even longer. Manage your own expectations for response as well and make sure your agent is following up.Don’t take it personally when you don’t hear back…it’s not personal, it’s business!9. Don’t Try to Choose your own Title CompanyChoosing the escrow company who will help close the transaction is normally the buyer’s decision, but when buying a bank-owned home, buyers need to be flexible. One of the items that your buyer will need to be flexible about is that the bank will, more than likely, want to choose the title and escrow companies. This is due to the fact that they have significant amounts of title work done during the foreclosure process so they usually want to stay with that title company. Please be aware that many of the escrow and title companies that banks choose to use are not local, and that they are usually low bidders who are overwhelmed by transactions as well. They will have traveling notary services or local options for document signing, but don’t expect the same service you get from your favorite escrow officer. If you are an agent, take an active role in trying to help the title company get the contacts they need locally, like the HOA information, etc.10. Shorten the Inspection Period and Don’t Ask for Repairs at the Offer StageIf other buyers are asking for 15 days to conduct inspections, and you ask for 10, you will be deemed the more serious buyer. Banks, just like traditional sellers, don’t like the “Free Look” that the Arizona contract offers buyers during the inspection period. If your agent can’t make everything happen within 10 days, (home inspection, termite inspection, special inspections) ask why not. Sometimes banks will pay for repairs, but typically will not agree to do so at the offer stage. If there are serious problems are found during a home inspection, try to renegotiate after your offer has been accepted. Banks are much more likely to offer concessions once your offer is in the hopper, especially if the repairs are required as a loan condition.Bonus Tip: Offer to Split Transfer Fees if You Ask for Any Concessions at AllAs a rule, banks do not like to pay transfer fees, but if the buyer offers to split those fees, the bank will feel more amenable to accepting the offer. We suggest offering 50-50 splits on all transfer fees and do not ask for further concessions like seller paying buyer’s escrow costs, etc.Keep all of these tips in mind when you are making offers and you will experience far less frustration and and much more success when trying to buy bank-owned properties in the Prescott area.Bonus Tip #2: Write your contract in English and not legalese.Forget what the last CE instructor taught you at your renewal hours, and go back to writing the contract in plain English.Want to see an example of how not to write a contract?Read more…
