loss - Blog - REO Pro Network

Homeowners unaware of potential alternatives to foreclosure

Posted by Lisa Meszaros on February 10, 2011 at 7:19am

Several lenders, including Freddie Mac, report more than half of homeowners who lose their homes to foreclosure never answer their lenders' phone calls or letters. Instead, homeowners feel embarrassed about being in default, don't believe their lender can help, and erroneously assume that contacting their lender will cause them to lose their home more quickly.

In a press release announced earlier this week, The Short Sale Association of America (SSAA) shared results of a Freddie Mac survey that reported "6 in 10 homeowners in pre foreclosure aren't even aware of the programs and services available to help them prevent foreclosure."

The release urges real estate professionals to reach out to distressed homeowners, knowing it is highly unlikely they will seek out assistance on their own.

Note: lenders are still behind the times when it comes to investment properties. They claim to have loan modification and other options for investors, but typically that is not the case.

14.01% of mortgages delinquent or in foreclosure

Posted by Greg Gamble - Seattle Washington on May 19, 2010 at 4:11pm

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

Loss Mitigation - Incentives for Short Sale Transaction.

Posted by Denise Stovall on September 26, 2009 at 4:14am

Is it a rumor or a fact? Short Sale transaction conditions have supported that lenders are stepping up to the plate and offering both their Delinquent Borrower/Homeowner and Realtors "Deals" to remendy a default/delinquent loan by a quick Short Sale transaction. Full borrower cooperation supported by experienced Real Estate service is the key to success. Incentives usually add up to dollars and cents for everyone involved; lender-borrower-realtor.Denise StovallNorthern CaliforniaSonoma County

Who’s Going to Five Star?

Posted by Mykel Martin on August 21, 2009 at 5:30pm

Hey, who’s going to Five Star? I responded to a post about a month ago that I thought I’d share with you if you’re going.

The Post:I will be attending the 5 Star conference this year in hopes to further the REO business for my company. Can anyone that has attended this in the past give me any pointers.My Reply:Just remember...when you go, you are there to get information - you are on a fact finding expedition. Collect more cards than you pass out; don't take brochures and the like. Remember, most of the AMs there are from out of the area. They are not going to pay extra to add your brochure to their luggage weight. Guess where your brochure is going? Correct! So you can see how important it is to collect their contact information instead, so that when you get back home, you can solicit them. Any thing you do hand out, be sure it has your phone number and email address on it. Additionally, once back home be on the look out for an excel spreadsheet that will come via email and include the contact information of each and every attendee of the conference.Hope this helps. Good Luck!

OK I'm Certified ...Now What?

Posted by CJ Oliver on August 18, 2009 at 3:51pm

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?

How much loss will a bank accept?

Posted by Jesus (Jesse) Gonzalez on January 9, 2009 at 4:09pm

Have you heard that banks will accept a certain amount of loss on their default real estate portfolios as a rule of thumb across the board? Have you heard that all banks are willing to take 20% less than the listing price?. Have you heard that all banks over price their listings because they know they are going to take a less on their properties? If you believe any of these rumors, urban legends, or false hoods then, you have just been suckered. Let me explain how banks determine their price when they go to list a home. First, they order an appraisal as soon as a home goes into foreclosure or as soon as they receive the first offer on the home. In an effort to be clear, let me tell you what an appraisal is. An appraisal is an estimate of your homes Market Value by a professional. It is important to understand the difference between Market Value and Price. Market Value as defined by the USPAP (Uniform Standard of Professional Appraisal Practices) says, "...a type of value, stated as an opinion, that presumes the transfer of a property (i.e., a right of ownership or a bundle of such rights), as of a certain date, under specific conditions set forth in the definition of the term identified by the appraiser as applicable in an appraisal." So, in other words, it's the opinion of a trained professional as to how much the property should sell for in a fair market. So, I bet now you are wondering how these appraisers analyze a property in such an un-certain market as that we are in now, right? Well, that can be answered by the definition of Market Value used by the residential mortgage financing industry and it says, " ...the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale." So, in other words, adjustments for any reason, are made to the comparables sales price not the subject property. Ok, I am sure this may be confusing but let me explain it this way. You want to put an offer on 1000 Money Pitt Lane but the asking price is $150,000.00, which you think is too high because it's a foreclosure. Well, the bank isn't going to care if it's a foreclosure, short sale or once belonged to one eyed, one horned flying purple people eaters because, they have comparables, from the appraisal, showing that similar homes that are true comparables, alike in almost (no property is ever the same due to it's uniqueness and immobility) every way sold for or above $150,000.00. So that offer of $115,000.00 you put in thinking that banks are taking less because that is what they do, is foolish and a waste of everyone's time. Well, maybe the Appraiser was smoking some serious blow that day and you (as the buyer) know that the home just isn't worth $150,000.00 so you want to stand by your offer and have it submitted. Truth is, the bank isn't just relying on the Appraiser to get the appraisal right. By the time you submitted your offer, they have accumulated approximate 2 appraisals, 1 from the previous homeowner and 1 upon foreclosure, and they have had a Realtor provide a BPO (Broker Price Opinion) monthly for the time before it hit the market and while it was on the market. My point here is, the bank is going to know the value of the home, the monthly average depreciation for the neighborhood and how long they are willing to wait for the "right" offer to come in the door. On average, per my friend at one of America's largest banks, they have 5 price analysis on a home before it is every put on the market so, they know, you can bet on it. Ok, so now that I have explained that, can you see why thinking a bank doesn't know how much a home is worth is just silly. Granted, banks are dumping some properties due to the large amounts of real property on their books however, that isn't because they have made some secret policy that they will accept a general loss on all their properties. In reality it's more about that specific home and how much loss they are willing to take and, that isn't something they are advertising. So, if you come across a great deal, then most likely you were at the right place at the right time with a Realtor who was looking out for you versus, anything else.

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Homeowners unaware of potential alternatives to foreclosure

14.01% of mortgages delinquent or in foreclosure

Loss Mitigation - Incentives for Short Sale Transaction.

Who’s Going to Five Star?

OK I'm Certified ...Now What?

How much loss will a bank accept?

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