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Real Estate Improves PT II- Change is Coming!

Posted by John Accornero on February 11, 2010 at 12:46pm

Well I can tell that my last post went over like a lead balloon. Some respondents indicated I was wrong to see more REO coming out of the gate soon. Again, I am back and like Jesse has said, " Talk about your market". Ok AM's get your pencils out and take notes! That means you "Doubting Thomas' realtors as well because here I go!

In my Los Angeles area market things have basically flattened out as far as price retreat. I have some example here from my coveted datasource:

Pico Rivera ,90660 +.12% gain over the last month!

Whittier, zips 90601-90606 (yes 5 zip codes here alone) +.48%!

La Mirada, 90638 <.15%> (ok just almost a zero here).. also voted one of the 10 best cities to live in a few years ago.

Buena Park 90620 <.16%>

Norwalk 90650 <.45%>

Los Angeles 90011 +.92% (where I did the BPO for Absolute REO)

Los Angeles as a whole...a WHOPPING + 1.16%

East Los Angeles (sometimes though of it as its own city!) a whopping 1.19%!!!

La Habra 1.59%!!! big gain here

Brea <1.45%> ok so we can't always be perfect!

Fullerton...+.01%

Well I can go on but you get the idea. My thoughts is that it may be a good time to start releasing some property over here before the market realizes what it is doing!

If you want a check on any other areas, please let me know. The Los Angeles Basin is a big place!

The market is turning and while we may not be out of the woods yet, I beleive the best is yet to come.

Contact me at any time!

Citigroup to Ease Foreclosure Process

Posted by Cynthia McKenna on February 11, 2010 at 11:20am

Citigroup to Ease Foreclosure Process
Citigroup announced Thursday that it will let delinquent home owners who don’t qualify for any federal relief program stay in their homes for six months as long as they turn over the keys and leave the property in good condition when the grace period expires.

The bank estimates that more than 20,000 borrowers in hard-hit states like Michigan, Ohio, Florida, Illinois, Texas, and New Jersey could be eligible.

Citigroup is hoping its plan will prevent borrowers from damaging their homes before they depart, which will save the bank significant repair dollars. The program also allows the company to bypass the slow-moving foreclosure process and gives the bank more control over when it puts properties on the market.

Source: The Washington Post, Renae Merle (02/11/2010)

Wow! I am amazed that banks continue to make their own rules. No need for NAR to keep them out of real estate, they are controlling it now....

What is wrong with this industry?

Posted by Jesus (Jesse) Gonzalez on February 11, 2010 at 10:30am

Quote,

"...if all of these REO companies are scaling back, why bother purchase AMP under res.net or get certified with REOtrans if we don't know if there is going to be enough work for those of us who can't get into any other company or the other companies are telling us that they are going to give their work to the preferred brokers ?" Anonymous

As I have always said and will always tell you, it's not the "company" you're with or the subscription level you paid for that is going to give you any chance at getting a REO.

The REO industry is the preverbal “boys club” and for those agents who don’t understand this concept, you will fall victim to false promises made by Asset Management Companies and Technology Platforms alike.

I have preached, revealed, screamed, wrote, published and explained to all of you through my blogs that unless you are actively contributing to this industry…..your success in breaking in is going to be less than stellar, if at all.

“Ned” our resident Asset Manager has revealed to many of his weekly column readers how to either break in or get more business. In fact, his most recent column is about this very topic yet, I didn’t but, 3 orders come in today for a FREE Agent Site, through the REOPro store, I only approved 2 blogs today and the forums seem dead today. Not to mention, I counted at least 4 articles in the Ask the AM archive on this particular topic or at the very least topics very similar and I have about 3 blogs myself I have written along with 1 blog that is nothing more than my top 8 blogs that any REO agent should read. So, with all that being said, why do we still get members who fall prey to the false and blatant lies running rampant through our industry like hungry lions on the plains of the Serengeti?

Granted, even industry juggernauts like REOTrans or RESNET seem to be participating in the “Realtor mop up” but, their lofty place as industry captains makes people like myself see these actions by them as shameless and disgusting yet, we still get agents who are clamoring, saving up thousands of dollars and purchasing higher and higher levels of “preferred status” for nothing more than the promise of a chance.

I read a recent forum thread titled “Valigent” posted by Janet Frederick on REOPro where one of our members Byron Guillermo copied and pasted a reply from an Executive with Valligent named Jeremy that said, Quote…

“Lenders take advantage of the fact that many real estate agents in this economy are desperate for listings,”

HELLO! CLUE PHONE IS RINGING! It’s not just the lenders….it’s everyone in the industry. My point is, they can make the promise of a chance, with no guarantee and they will still make money hand over fist from the contract they have with the bank, to the “technology fee” you kick back and then your monthly membership fee and annual “preferred broker” fee. It’s a cash cow because of the very statement made by Jeremy with Valligent.

I am trying to explain to you, if you feel victimized, if you feel as if you have been taken to the cleaners, if you feel like no matter where you go, it’s more and more money……well, yeah, you’re right but, that’s because people are paying for it. Caveat Emptor my friends, or in other words, Let the Buyer Beware.

So, how do you avoid these people and scams, how do you break in……well, it’s as I have always said, it’s about developing relationships, providing a useful service and becoming an expert in your field. If you want to know more about my opinions on these things, read over my blogs, read the AM column this week and search through the archives.

REOPRO 4000 WOW!!!

Posted by Billie Dalessio on February 11, 2010 at 7:55am

I have said it many times in the past but Congrats to Jessie & Thanks for creating this wonderful professional place where we can learn & share. Like most of you, I found this site by accident while searching for information on a asset management company that wanted to do business. It quickly became my "go to place" when researching which companies are worth associating with, as well as obtaining great information from agents across the country.

NOT "just another REO" !

Posted by Alain Thillois on February 11, 2010 at 7:21am

Already a few days I am questioning myself if I should post these lines… Then I remember my fiduciary duty owed to the principal to protect that person’s interest above my own…! This was enough to make the decision and I am confident that I don’t go over the scope of my agent duty.

Bank owned SFR recently sold at 10% above OLP, 6 DOM and defined as best FHA file by lender. Obviously, borrowers were well qualified. Subject property was far away in pristine condition with some deferred maintenance and as any other neglected REO. Everyone was anxious regarding home inspection and pest report. Buyers were aware of the condition. Report came back highlighting the condition but not raising any red flag as the way it was written. The property was originally cleaned up to an acceptable level by the preservation company. Acceptable may be to their minimum but certainly not to my minimum for best marketing therefore the principal’s best interest. Therefore a few touch-up were made prior to be on the market at “no cost/no question asked” to have the property more inviting, more appealing and inspection easier therefore better report. The scope of my last minute attention was actually what we should do on our weekly and monthly maintenance with attention and detail. That’s all! Small details with big results are either for any potential buyer or inspector to conduct their report and due diligence with better desire than filth or borderline acceptable presentation.

I can share my first job when I was 15 in France as I was passionate to work on vintage airplane. I was working part time for an old timer repair shop. Airplanes were subject to inspection from the authority as FAA in US. We were arriving one hour earlier in the morning of inspection to sweep the floor of the workshop and sprayed water before just to be fresh and smell good. That was clean and made the inspector in good mood. A detail may be, but it made the difference!

A great flyer with filth in each room does not do any good. My opinion remains to sell the bank owned property as a property and not just as another REO. Presentation is a “Must”. It should actually be better than a normal listing since the seller is not onsite. Results can be unbelievable with small details. Our duty of as agent is narrowing our activities but still remains a diligent exercise of reasonable skill and “CARE”. In other words it is obvious that owner and AM in the REO case is expecting more than to be consulted with estimate in case of immediate repair. REO instruction for listing is more obvious with some details as “Electric is to be turned on and inform AM ASAP if unsafe”. Who is deciding it is safe or not ? Does agent has to get the opinion from and electrical contractor which means fees to be paid, therefore delay with estimate to be submitted! I believe here is a perfect example as nothing will move forward with this option. One case I had was a property with displaced heater casing, a few gas gaskets on the garage floor was enough to take the decision to turn on electrical service only and not gas which was reported later to AM. The decision was made on site. Owner as bank and AM are in an office hundreds of miles away and often in a different time zone. They rely on agent’s initiative to take care of the property. Too late is not acceptable in many cases. This might be an opinion and it is coming from some previous experience with property management where I have to deal with owner sometimes on the other side of the planet and not necessary available to discuss about the leaking water pipe. This owner relied on my due diligence and did not worry since I was onsite. He knew and trusted me.

It is preferable may be to swallow little money of repair as “marketing expense” than big

Do BPOs Actually Lead to Listings?

Posted by Megan Zavieh on February 10, 2010 at 10:30am

I spend time each day on Equator, struggling to beat out everyone else trying to get BPOs. I have help -- I'm not complaining on that front -- but each day, we try to snag a BPO or two. Then we go out to work on them, spending time driving, taking pictures, pulling comps, filling in the form, etc. We aren't looking to make a living on $50 BPOs, of course. We want to get listings!

However, are any of the homes on which we do BPOs ever going to turn into listings? I am beginning to lose heart that they will. Only one of the homes I've done a BPO on in the last many months has become a listing for any agent, and it wasn't an REO. The others still aren't even listed. I've considered the lag time between a bank taking title and actually getting possession and being ready to list it, but even with that, it doesn't add up. Our tax records change pretty quickly in our county, and the BPO properties aren't showing up as bank owned.

So why are the BPOs being ordered? Are they to support sales? Then why aren't they even listed as short sales? Are they to support the sales of nearby homes? Or are they to support loan modifications with principal reductions?

And most important for my business, will they ever become listings? I am seriously doubting it, and I am looking at the number of hours in the day and my profitability, and I think my time can best be spent on other activities.

Megan Zavieh

Mission Valley Real Estate Company

Fremont, California

http://www.mvreco.com

Keeping things confidential;

Posted by Bettina Settles on February 8, 2010 at 11:40am

I have been around the block more then once and I see it over an over again; Agents in their day to day business breaking client/customer confidentiality.

When working with clients or customer we are not only bound by the office policy to keep information confidential; Information that homeowners and financial institutions give us falls under the Gramm-Leach-Bliley Act; and have to be kept confidential.

Keeping things confidential means; DO NOT DISCLOSE to anyone.

Other things that I am seeing floating around the internet, is information that has been given to Agents under a written confidentiality agreements with their customer or clients and they decided to just post it and publish it without receiving prior written permission from their client or customer to post the information

Does not happen……it does and I am disappointed for every agent that has broken the trust (and the confidentiality) of their clients……

SEC Charges State Street for Misleading Investors About Subprime Mortgage Investments

Posted by Preservation Monthly on February 4, 2010 at 1:27pm

SEC Charges State Street for Misleading Investors About Subprime Mortgage InvestmentsBoston-Based Firm to Settle Charges by Repaying Fund Investors More Than $300 MillionThe Securities and Exchange Commission today charged Boston-based State Street Bank and Trust Company with misleading its investors about their exposure to subprime investments while selectively disclosing more complete information to specific investors.State Street has agreed to settle the SEC’s charges by paying more than $300 million that will be distributed to investors who lost money during the subprime market meltdown in 2007. This payment is in addition to nearly $350 million that State Street previously agreed to pay to investors in State Street funds to settle private claims."State Street led investors to believe that their investments were more diversified than a typical money market portfolio, when instead they were invested almost entirely in subprime investments that ultimately caused hundreds of millions of dollars in losses," said Robert Khuzami, Director of the SEC's Division of Enforcement. "Investigating potential securities law violations arising out of the credit crisis remains a high priority for the SEC Enforcement Division."The enforcement action is the result of joint efforts by the SEC with the Massachusetts Securities Division and the Massachusetts Attorney General's office, which both announced related charges against State Street today.David P. Bergers, Director of the SEC's Boston Regional Office, said, "State Street informed certain investors and left others in the dark about their subprime mortgage exposure. This global settlement will ensure that harmed investors are compensated."According to the SEC's complaint filed in federal court in Boston and a related administrative order issued by the Commission, State Street established its Limited Duration Bond Fund in 2002 and marketed it as an "enhanced cash" investment strategy that was an alternative to a money market fund for certain types of investors.By 2007, however, the fund was almost entirely invested in subprime residential mortgage-backed securities and derivatives that magnified its exposure to subprime securities. But State Street continued to describe the fund to prospective and current investors as having better sector diversification than a typical money market fund, and failed to disclose the extent of the fund's concentration in subprime investments.According to the SEC's complaint and order, State Street sent investors a series of misleading communications beginning in July 2007 concerning the effect of the turmoil in the subprime market on the Limited Duration Bond Fund and other State Street funds that invested in it. At the same time, however, State Street provided particular investors with more complete information about the fund's subprime concentration and other problems with the fund. These other investors included clients of State Street's internal advisory groups, which provided advisory services to some investors in this fund and related funds.The SEC alleges that, based on this more complete information, State Street's internal advisory groups subsequently decided to recommend that all of their clients including the pension plan of State Street's publicly-traded parent company (State Street Corporation) redeem their investments from the fund and the related funds. The SEC alleges that State Street sold the fund's most liquid holdings and used the cash it received from these sales to meet the redemption demands of better informed investors, leaving the fund and its remaining investors with largely illiquid holdings.Under the terms of the settlement, State Street agreed to pay a $50 million penalty, more than $8.3 million in disgorgement and prejudgment interest, and more than $255 million in additional payments to compensate investors. Combined with nearly $350 million that State Street has already paid or agreed to pay some investors through settlements of private lawsuits, the total compensation to harmed State Street investors is approximately $663 million.State Street also was ordered to cease and desist from any further violations of certain securities laws. The SEC's enforcement action took into account the company's remediation and its cooperation, including:ð Replacement of key senior personnel and portfolio managers.ð Conducting a review of its procedures and revised its risk controls.ð Entering into private settlements with harmed investors.ð Recent agreement — pursuant to a limited privilege waiver — to provide information it was not otherwise obligated to provide to enable the SEC to assess the potential liability of individuals with respect to certain investor communications.The SEC's investigation is ongoing. The Commission appreciates the assistance of the offices of Secretary of the Commonwealth of Massachusetts William F. Galvin and Massachusetts Attorney General Martha Coakley.

LAMCO Bolsters Disaster Recovery Plan for REO Properties

Posted by Preservation Monthly on February 4, 2010 at 1:26pm

LAMCO Bolsters Disaster Recovery Plan for REO Properties- Provides full default asset management of properties during natural disasters and accidents -Lenders Asset Management Corporation (LAMCO), a full-service, nationwide REO management company, announced the enhancements to its Disaster Recovery Plan, a detailed listing of LAMCO’s procedures for responding to emergency situations that could potentially threaten the service level agreements and commitments they have with their clientele.The LAMCO Disaster Recovery Plan was designed to facilitate timely recovery of business functions, minimize loss for its clients and maintain public image and reputation for owners of REO properties.LAMCO’s multi-pronged plan takes into account recovery teams; human resource assistance; administrative support such as food, travel and lodging for recovery staff; finance issues such as ordering of equipment or supplies; recovery communications; plan activation with the establishment of remote command centers; a site recovery plan and a business application recovery plan, including comprehensive checklists of duties for each recovery team member.“By developing a comprehensive disaster recovery plan, LAMCO ensures that the organization is fully prepared and equipped to deal with any type of disaster, be it a fire, natural disaster or any other situation that may be unexpected, “ said Brandon J. Hawkes, CEO of LAMCO. “We take the necessary precautions to give our clients and their customers peace of mind that they are constantly protected at any state in time.”

WOW, 7 MILLION houses in default.

Posted by Jose Rivas (DGRA) CDPE, SFR on February 4, 2010 at 11:14am

I read this on mortgage news today, and this numbers are kind of scary, so many properties will definitely have an impact in the housing industry and the overall economy of our nation.Here is the article7.2 Million Loans Behind on Payments, One Million REOsMore than 7.2 million mortgage loans are now behind on payments and one million properties are now in real estate-owned status, according to the January 2010 Mortgage Monitor report from Lender Processing Services in Jacksonville, Fla. Home delinquency rates have surpassed 10%. The total foreclosure inventory rate is 3.2%, and the total non-current rate, which combines foreclosures and delinquencies, sits at 13.3%. The percent of "new" serious delinquencies is 4.64%, higher than any other year analyzed for the same period. Of loans that were current as of Dec. 31, 2008, by Dec. 2009 there were 2.3 million new loans that were considered seriously delinquent. Prime loans, including agency, non-agency and jumbo, have experienced deterioration at a worse pace on a relative basis than subprime, FHA and all loans as a whole. Within the prime category, loans with current unpaid principal balances between $417,000 and $600,000 have performed the worse, LPS said. States with most non-current loans include Florida, Nevada, Mississippi, Arizona, Georgia, California, Indiana, Michigan, Illinois and Ohio. States with fewest non-current loans are North Dakota, South Dakota, Alaska, Wyoming, Montana, Nebraska, Vermont, Colorado, Oregon and Washington.

Connecticut is enforcing PTFA

Posted by Jose Rivas (DGRA) CDPE, SFR on February 4, 2010 at 3:16am

This article if from DSNEWS, in the last few months most of my listings have been rental properties, rather than homeowners, and the tenants that I have encountered know the law well. In most cases they take the cash for keys, but a few wait to the eviction day and save the rent money for the new rental.The eviction attorneys in my area are been very careful with this new law, and part of my occupancy report includes to get a copy of the lease for them. My banks usually don't ask me for that, but I guess if I make the life of the eviction lawyer easier, he might like to work with me better than other agents, and might help me increase my business.Well here is the article article from DS NEWS:http://www.dsnews.com/articles/ag-orders-servicers-attorneys-to-stop-evictions-violating-federal-tenant-law-2010-02-03Connecticut Attorney General Richard Blumenthal sent cease-and-desist letters to a host of default servicing practitioners this week ordering them to stop “abrupt and illegal evictions” of tenants of foreclosed properties.Blumenthal says his office has received numerous complaints from tenants who say they were hastily and illegally forced out of rental homes after their landlords’ properties were foreclosed – a violation of the federal Protecting Tenants at Foreclosure Act (PTFA) signed into law last year.PTFA allows all tenants in a foreclosed property to stay in their homes after the completion of a foreclosure action for at least 90 days from the date of notice to vacate the property or until the end of their lease term, whichever is later.According to Blumenthal, evicted tenants are typically current on their rent, but face eviction because of their landlord’s financial troubles. He says in many cases, real estate agents begin eviction procedures immediately upon completing foreclosure despite the 90-day rule, or unlawfully pressure tenants to leave without informing them of their rights under the new federal statute.Blumenthal has sent cease-and-desist letters to 30 companies that his office alleges may have engaged in eviction practices that violate PTFA, including law firms, real estate companies, lenders, and servicers. Blumenthal is notifying the companies of their legal obligations and requesting that they follow this federal law.“Tenants have rights to remain until their lease ends-rights that deserve respect and enforcement,” Blumenthal said at a press conference this week. “We’re warning banks and real estate interests: foreclosure is not excuse for illegal eviction. These cease-and-desist letters send a message to powerful property owners that foreclosure gives them no right to engage in automatic eviction en masse.Blumenthal added, “Fast-track evictions not only harm tenants, but turn vacant properties into eyesores and even crime havens, diminishing values neighborhood wide. We are putting these companies on notice: follow federal law, and treat tenants fairly,” or face legal action.

REO Transaction Management Software - Part II

Posted by Roxanne Tidmore on February 3, 2010 at 3:00pm

REO Transaction Management Software – Feature Tips – Part IIIf you are looking for REO Online Transaction Management software for your business, there are many features that you would want to consider before purchasing. Because you want the software to make your job easier not harder! You want it to be able to streamline processes rather than bog them down.Here are five more features that you should consider when purchasing an REO Transaction Management Software.Security- Does this software utilize Secure Socket Layer (SSL) technology? It protects your information using both server authentication and data encryption, ensuring that your data is safe, secure, and available only to registered Users in your organization. Does the software utilize the most advanced technology available to keep your sensitive data secure? How often do they back up their data? And is the backup available to you at your request?Remote Access –Are you able to access your software remotely? Since agents are so mobile it is important to choose a program that fits the way you run your business. You should be able to access your account from anywhere. Also you should be able to access it with any mobile device that you have such as a Blackberry, or cell phone.Flexibility – How open is the company to suggestions from you to help your reo transactions run more smoothly? Let's say you need a feature such as email reminders to be sent before the due date on a task. I once asked a company if they had this feature. They did not. I asked would they be willing to put this feature in their system. Surprisingly they were not and could not see the value that we would receive from it. For REO Agents and transaction coordinators it is important, because then we would not have to log into the system daily to get our reminders.Transition- If you are not using an REO software program, can your data be easily exported to their system? How long will this process take? Will the company do it for you or will you need to do it yourself? Some companies are willing to do this step for you to make your job easier. Also if you are using a REO software program and you want to switch, can your information be easily transferred to the new system?Cost – Some companies have a flat fee for one year for an unlimited number of transactions. Some companies have a set up fee and then a fee for a certain number of transactions. Then you have to pay if you go over that number. Some companies offer a free trial – which is important to take advantage of. You can test it to see if all of the features that are important to you work smoothly. But you can compare costs to see if it will fit your budget. But also you can compare costs with features to see what company offers the best value.Guarantee – Along with the cost it is important to ask what is their satisfaction/guarantee policy. Once you sign the contract, are you locked in? Or can you stop services if you do not receive the services that were promised?Whatever software you choose, just be sure to consider these features before you buy.To your Business Success!

The new "Mob"

Posted by Tony Linton on February 3, 2010 at 11:38am

The new “Mob”You might be thinking drugs?....... Prostitution? No, It’s much worse, it’s legal extortion by our own local municipalities and code enforcement. We have seen all the heavy fines for overgrown grass or debris on properties and even missing mailbox numbers. You might think……heck, they’ve been doing that for years, but I will tell you first hand that the cities are getting incredibly greedy and also much better at squeezing all the juice out of the REO properties. And they do it without any legal recourse “Just cuz they say so”. They used to send contractors out and charge a fine for mowing or pick up trash and base a fee and fine on it, which is ok….now they stick a tag on the door and forget about it…..till someone try’s to clean it up and sell it, Gotcha!... someone has to pay the lien.Many of these type fines or liens could usually be added to the docket and heard at a commission meeting or town hall meeting and negotiated to an amount that sounds reasonable to everybody, but the policies are becoming a little more difficult. In my area they are adding a guidelines reduction maximum amount to no more than 50% no matter how strong of a case you present. Ouch!.....I keep thinking of one property that accrued a $77,300 grass cutting lien at a rate of $500 a day, I was able to get that down to $900 because even the city thought that was moronic. By the standard today that would have cost the bank $38,650…….The property closed at $70,000.As assessed values plundered over the past three years, property taxes have decreased somewhat and the local government has been faced with budget cuts, well haven’t we all? They now require supplemental income, there is very little building happening which means, no impact or permit fees. They are resorting to milking everything they can from the general public such as drivers licenses and tag fees (doubled) Traffic violations increasing and much more expensive. Our local law enforcement just loves to set up a tripod with radar and have a cop in jeans posing as a surveyor to herd the speeders in like cattle.Yes….I suppose I’m whining, but it infuriates me that we are expected to buy off on this way of thinking, what I mean is they want everyone to come to terms with the attitude of “they were speeding so they deserve a $300 ticket” “ the grass was overgrown so they deserve a $10,000 fine” NO……they don’t…and if the city hides behind the fact that they just want it cleaned up or grass cut then clean it up and cut the grass and charge accordingly, not tag it and leave it! People need jobs and they would love to get the work. The extortion is that no one can do anything about and simply must accept things the way they are. They haven’t cleaned up the community or done anything to earn this money, they do it simply because they can.

Short Sale Agents: Inform Your Clients of Possibility of Deficiency Judgements (Article)

Posted by Trevor Nightengale on February 3, 2010 at 10:24am

There has been quite a bit of talk about doing short sales, but we must make sure that we are trained in all aspects before claiming to know this part of the business. Yeah, I once thought it was as simple as writing a hardship letter, sending in financials and submitting an offer and the bank will jump on it. Not so. And even if it was that simple, we must still inform our clients of the possible financial affects of short sales and possible ways to avoid these affects (insert the word 'attorney' here).Thought this was a good read about lenders possibly pursuing deficiency judgements, many times after the homeowner doing the short sale has recovered financially. Here's the link:http://finance.yahoo.com/news/Mortgage-lenders-pursue-cnnm-3107909798.html?x=0

Because of the volumes the learning curve is steeper in New York....Jumping on the REO wagon

Posted by Mike L. Williams on February 3, 2010 at 4:35am

Jumping on the REO wagonFebruary 01, 2010 07:00AMBy Peter KieferMajor residential brokerages may still snub their noses at the listings, but a growing number of firms, particularly in the outer boroughs, are fighting for a share of the foreclosed homes market.Lenders took back thousands of homes in New York State last year and thousands more face foreclosure this year.Take Staten Island-based Wonica Realtors and Appraisers. Last year, according to founder and president George Wonica, the firm's REO division, which specializes in marketing and selling foreclosed residential properties in Staten Island and Brooklyn, accounted for almost 80 percent of his firm's revenue."It carried the office," Wonica told The Real Deal. "I've never seen anything like it."The marketplace for REOs -- or "Real Estate Owned" by the bank because they did not successfully sell at a foreclosure auction -- is thriving in places hit hard by the housing downturn. In New York City that usually means in the outer boroughs, although Manhattan is not impervious.Unlike foreclosures, which are auctioned off and must be paid for in full at the time of the auction, REOs are sold by brokers with a traditional commission fee structure. Last year there were 918,376 REO filings nationwide, with 6,341 REO filings in New York State, according to RealtyTrac.A report released by NYU's Furman Center said the number of REOs in New York City grew from 290 in December 2006 to 1,750 in September 2009.That is a pittance compared to California and Florida, which had 199,000 and 82,000 REO filings last year, respectively. But the worst may still be in store for the Empire State.Rick Sharga, senior vice president at RealtyTrac, said the numbers of REO filings in New York City and State are expected to spike significantly this year. "If you are a realtor and not playing that part of the business, you are missing a lot of opportunities," said Sharga.However, selling an REO home in New York isn't easy.It takes an average of 450 days from the initial notice of a pending foreclosure to an auction. That is about 300 days longer than the equivalent process would take in any other state. This gives people more time to get out of trouble and reduces the pool of properties.That may explain why none of the larger residential brokerage houses, like Corcoran, Halstead or Elliman, have REO divisions, effectively ceding the market to companies like Fillmore Real Estate, Wonica, Triton REO Management and Safari Real Estate, among others.Or, as some suspect, it may have to do with image. "There is still a bit of a bottom-feeder image that goes along with it," said Sharga.Most of the REO divisions tend to be small, with between two and 15 people. The divisions usually have at least one appraiser to help with the BPO, or broker price opinion, the original price assigned to a foreclosed property. Clients are the lenders that provide the listings, paying the broker sales commissions ranging from 5 percent to 8 percent."The REO world is very complicated," said Ken McBride, senior vice president and director of REO marketing at Fillmore Real Estate. "A lot of brokers think the bank just hands you a listing and you go and sell it. Not the case. You have to have a specialist in each area to get the bank to give you these listings," he said.REO listings, unlike traditional residential listings, often require an immense amount of property management and upfront out-of-pocket expenses by the broker. Sometimes a broker will have to front tens of thousands of dollars in maintenance, security and legal fees before being reimbursed after a sale.Fran Reali of Staten Island-based Safari Realty said the REO division at the firm had doubled its revenue since its inception five years ago, but she also understood why people would hesitate to do the work."Everybody will jump on what they perceive to be the easy-money bandwagon until they see how much work goes into it," she said. Tasks for a single listing can include an appraisal, relocating existing residents, court time for eviction hearings, changing the locks and overseeing extensive repairs.It can also provide some tense moments.Fillmore's McBride said he has seen some "unbelievable stories" in his 20 years as an REO broker. Just last month, he said, a delinquent landlord in Brooklyn berated him before calling the police when he came by to deliver eviction notices.The process by which banks assign listings to brokers and brokerages is vague and, according to some, flawed. It is usually based on prior relationships, but often banks will award a listing based on a broker's predicted sale price, regardless of whether that price is realistic."There is a certain amount of politics involved in getting a listing. The process doesn't work very well," said Bill Staniford, CEO of PropertyShark.McBride said despite a recent spike in the number of listings in New York, the market is far more competitive than most people imagine, particularly given the state's protective measures for homeowners.Perhaps wary of how this market can be perceived from the outside, brokers stressed that REO work requires diplomacy."We try to be as helpful as possible," said Wonica. "But I can't be concerned about something I didn't create. I can't be concerned about how we are looked at from the outside. It's not like we go in there with a black coat and a machine gun and say, 'Get out!'"And besides, he said, if he isn't out there hustling to sell REO properties, "somebody else will."

Is this a source of lessons learned? California Revokes Record Number of Real Estate Licenses

Posted by Mike L. Williams on February 3, 2010 at 4:25am

The California State Department of Real Estate (DRE) says it revoked a record number of real estate licenses for cause in 2009, and accepted another record number of license surrenders from real estate professionals facingdisciplinary action. All told, over 775 licensees in the state had their license revoked or simply surrendered their licenses while facing accusations last year.Over the past two fiscal years, the DRE averaged 446 license revocations and 59 license surrenders. In 2009, license revocations jumped over 50 percent, to 672, while license surrenders skyrocketed nearly 80 percent to 105. The 122 cases that resulted in license suspensions in 2009 remained relatively unchanged from the 125 license suspensions averaged in the past two fiscal years.The downturn in the real estate market is a big reason disciplinary actions are up, with foreclosure prevention cons a large contributing factor, the state department said.“With so many people struggling to stay in their homes, foreclosure rescue and loan modification scams have risen dramatically,” DRE Commissioner Jeff Davi said. “And what is even more unsettling, a majority of offenders involved in loan modification scams are not even licensed, which limits a consumer’s ability to obtain restitution or verify the legitimacy of a business.”In 2009, the DRE initiated over 2,000 investigations involving loan modification complaints, which represents 25 percent of all cases. The department issued over 180 desist and refrain orders to nearly 348 different respondents performing loan modification services, ordering them to stop or change their business practices.Of those, the DRE discovered 60 percent were not licensed and ordered them to cease licensed activity, including offering loan modification services. In addition, nearly 100 real estate licensees have been accused of violating the real estate law in connection with loan modification complaints. According to the DRE, many of the completed cases have been referred to law enforcement agencies for criminal prosecution.In order to help inform consumers to stay away from the bad actors, the DRE posts on its website all the recipients of desist and refrain orders and accusations in loan modification complaints along with a copy of the order. The department also makes real estate license verification available to consumers on its site.Homeowners that are defrauded by a licensee and obtain a fraud judgment in civil court, but are unable to collect on the judgment, may be able to receive restitution from the DRE. The agency administers a recovery account for fraud victims that can pay a victim up to $50,000 for a transaction.

The Weather is Changing

Posted by John Accornero on February 2, 2010 at 9:53pm

Many of use have been known from time to time either conjecture or complain when are we going to see some action in REO's. This is what I have noticed recently in my own sphere and I am not a big name realtor either.Just today, there was a flood (that means 4 ) BPO's released on Equator in my service area, which is a spike. Two weeks ago Asset Valuation sent me a survey that wanted my feelings on where the market was going. I guess it was Litton Loan Servicing wanting to know that.Just last week TITANIUM accepted me as an agent and I got my first assignment to help someone ( I like helping people really...realtors can be your friend), then they tell me that they are hooking up to Excellen and I'd better sign up to get REO's if I wanted them. Of course I had to be part of RESNET too...good thing I am.A few days ago FirstAm SENT ME an email asking me is I wanted to sign up to do BPO's (that was unusal).We all now about me getting a BPO from Absolute REO recently as well.I think something is about to happen. I can even feel the excitement here when Jesse is onto something!Jesus once said to the Pharisees: "You can read the signs in the sky...if the morning has a red sky, the day will be stormy bu if the evening sky is red, tomorrow will be nice. Yet you can't see the signs in front of you"Well I hope I don't irritate anyone by using this paralell but I want to see through the hype and get ready to get down to business, because the WEATHER IS CHANGING for us professionals.

Search Engine Traffic vs. Social Media Traffic? Which is Better?

Posted by Chris Treece on February 2, 2010 at 7:06am

It's important to understand and know what is best for you and your blog, when you start blogging and invest your valuable time writing for your blog, you want good return over the time you have invested. The way you will gain your profits is by getting more and more visitors to your blog. Now which is a better way to gain visitors social media or search engines like Google, Yahoo, Bing and other.Social media traffic - Positive side:• It can bring huge amount of traffic to a blog or website in a very little amount of time.• Your blog get exposure to new visitors, readers and advertisers.• It also gives you rise in your revenue sometimes.• A popular story on Digg, Stumbleupon or Reddit makes people link your story with their blog or bookmark in other social media websites like Delicious, Netscape and more, which helps in creating backlinks to your blog.Social media traffic - Negative side:• To bring traffic from social media you need a network of friends active in social media which demands lot of time investment, it completely depends on you if you want to invest your time to build a network in social media.• Social media traffic is not reliable because some day you might get peak in traffic and the other day you might get nothing also social media will only give you traffic until your post is popular and visible to mass audience.• Don't expect social media traffic to click on anything else on your page, majority of traffic will not even bother visiting any other web page of your blog which will lead to high bounce rate of your blog.• Eats up lot of bandwidth with almost nothing in return other than lot of page impressions and large spike in increased traffic.Organic Search engine traffic:• Search engine traffic provides targeted traffic to your blog, your visitors will look for more similar stuff on your blog if they like your posts and also will subscribe to your blog and more over spend time on it, all these factors will result in low bounce rate of your blog.• Gives you a moderate traffic but the traffic is steady and you will not face ups and downs in your traffic unlike social media traffic.• Search engine traffic pays you in long run.• Money makers: Search engine visitors are those visitors who come to your blog looking for something that they really want and if there is something you have which is useful to them then they would even won’t mind paying money to get it.Social media has evolved as a very powerful tool in recent times and the traffic from social media is very tempting to every one and to achieve that level of traffic people don't mind spending hours getting their story voted by others to make it popular.I can only say that both the channels have their own power and importance in blog promotion. I prefer search engine traffic over social media traffic but also I like sharing some unique and interesting stuff with my social media friends once in a while because it also keeps my blog visible in social media also.You can't just focus on either one of the channel's because you will be missing out on potential visitors from the other channel, so it's ideal to manage social media and search engines on regular basis and you can do this by optimizing your blog regularly for search engines and also chipping some posts for social media freaks to gain benefits from all the available resources available to generate traffic.

The game of CAT and MOUSE

Posted by Jose Rivas (DGRA) CDPE, SFR on February 2, 2010 at 3:51am

This is very entertaining, I guess everything in life is like this there are law enforcers and then those who like to "bend" the rules, I just got an email this morning, I am not going to tell you the name of the company who send it to me to avoid any issues with Mark to Market. Do you remember a few days ago when Mark to Market added Captcha to stop the auto acceptance softwares. There is another blog about that in REOPRO.Well it seems that one of those auto acceptance softwares is working on a way to get back on business, I guess this goes back to the basics of supply and demand.Here I am copying the actual email I received this morning:"We are aware of the changes that Mark2Market has made with their website, with the implementation of the captcha.We are currently working on counter-measures to addrsss the changes in their web site.We will keep you updated with the status of this issue"

Is It Wrong to Make a Profit as a Real Estate Investor?

Posted by Allan S Glass on February 1, 2010 at 7:00pm

As a nation on edge and in the midst of the worst economic crisis since the Great Depression, many of the daily aspects reflected in “Americana” seem to have become taboo. For the past two years our stunned and gun-shy population has wandered through news of continued job losses, store closings, grim foreclosure statistics driving the economy south, and consumer confidence to all time lows.In times of chaos and turmoil it’s normal to wonder who is to blame for our collective misery as it is expected that we all seek solutions to our temporary slump. However, one unfortunate by-product of this circumstance is the blurred distinctions between actions that lead to recovery and those that caused our loss. In the real estate industry this has become most evident in the grouping of profit with greed, and investment with speculation.Profit vs. GreedIn a recent article for the Washington Post, conservative columnist George Will writes, “Greed, we are agreed, is bad. It also is strange. It has long been included among the Seven Deadly Sins, which suggests that it is a universal and perennial facet of the human fabric.” He continues on with the example of ticket brokers, like Stub Hub, to illustrate his point that the open market properly punishes greed with missed opportunities and sudden collapse due to improper timing. “Greed is worse than a moral defect, it is a cause of foolish pricing. That is why markets know it when they see it.”Without entering a conversation about regulation versus free markets I would concur that greed unchecked leads to downfall. Further, the collapse of the US housing market shows that the unfortunate side effect of unchecked greed is the collateral damage done to those who were not greedy but remain caught in the crossfire.Profit on the other hand is a basic tenet of Capitalism and the cornerstone to our free market society. Profit is the engine that propels entrepreneurs, investors, and jobs, manufacturing, creativity, and expansion alike. In his seminal book “The Science of Getting Rich” Wallace Wattles explains that one must always give more in “Use Value” than they receive in “Cash Value.” His clear yet sometimes lost point among business ventures is that a properly functioning marketplace allows for a reasonable entrepreneurial profit to those who add value to the business process. This distinctive balance lies within the intent of the business performing the service.In illustration of this point can be found in the real estate industry by comparing investors to speculators.Investor vs. SpeculatorA real estate investor is an individual or entity that invests equity into a real estate asset for the purpose of generating income from or adding value to the existing improvements. Investors can have long term or short-term strategies. They may use their own capital or they may borrow (leverage) equity to varying degrees. Some create value by curing defects either physical (dilapidation) or financial (cash buyers with quick closings), while others employ long-term hold strategies that gather value from timing and appreciation. Yet all prudent investors share the distinction of returning to the marketplace “Use Value” for the profits or “Cash Value” they earn.Speculators can share timing and leverage strategies with investors, yet that is where the similarities end. The intent of a speculator is not to add value to the economic engine; rather they look to take advantage of the marketplace by simply getting in line first. The speculator is driven by greed. Profit margins and financial gain are not based on business strategies that help balance supply and demand, thus making the business plan viable in the long term. Instead the speculator looks to horde or corner markets to their advantage intending to reap exceptional short term profits before quickly exiting the marketplace without regard to what is left behind.The Soap AnalogyMost all of us bathe on a regular basis. To do so effectively we use water and some form of cleaning agent. For this example let’s assume we all use soap.If one were to plan for a shower and find all the soap gone, the reasonable response would be to go down to a convenience store (grocery store, warehouse store, or drug store) and buy another bar. Most of us would look for the best bargain or our favorite brand and gladly pay the store’s asking price. For this transaction to occur we realize that some other business distributed the bars of soap in large bulk quantities to that store to accommodate our smaller purchase. Before that, a manufacturer bought raw materials mixing together bars of soap to later package and sell to that same distributor.Each step along the way a business invested their capital to provide a service both for the entity before them and customer who comes after them in the economic process. For this privilege and purpose each investment entity earns a tidy profit. By charging too much for their service they lose customers and go out of business. By contrast, not charging enough leads to loss, inhibiting the ability to remain a viable and profitable concern. Either way, free market forces act to keep profits in balance and all of us clean. Further we support these profits and welcome the service provided by continuing to buy bars of soap.But what happens when someone only seeks to take advantage of system for the short term and their own personal gain. Let’s imagine we’ve all taken a two-week cruise across the Pacific Ocean. Forced to share close quarters for an extended period of time it would quickly become apparent that good hygiene practices are necessary to the shared enjoyment of the passengers. Again, enter the need for soap.For this example let’s assume that the passengers did not realize this need until the boat was long to sea and the boat’s sundry shop was grossly undersupplied with the sudsy necessity. Enter the speculator. Realizing that other passengers have nowhere to turn, too little supply and extraordinary demand, he quickly gathers all of the available soap and waits for the pandemonium to begin. Beyond the myriad of possible disasters awaiting the group one outcome remains certain – Imbalance and market failure.The Real Estate WorldExamples of our ship bound soap pirate were seen all across America this past real estate cycle. From Brooklyn to Las Vegas, Florida to California speculators bought or reserved condominium units before homeowners could find their place in line. Speculators bought income property that did not earn enough income to support the prices paid intending to sell it in short order by way of rapid appreciation. Eventually the music stopped. The result – Imbalance and market failure.Yet amid the ashes born of greed and speculation, comes the profitable investor intent on creating value within the economic system. Recognizing a need and providing a valuable service, the investor uses free markets to find balance in the economy and provide profits for its coffers. Identifying “Use Value” in exchange for “Cash Value” the profitable investor solves problems, creates jobs, provides a service, fuels growth, inspires innovation, and is the cornerstone to the American Capitalist System.That is never wrong.

Allan S. Glass is a real estate broker in Los Angeles, Californiaspecializing in REO and Short Sale transactions. Allan is also a featured blogger on Realtor.com. The ASG Real Group has over $1 billion and 17+ years of transaction experience.

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All Posts (2129)

Real Estate Improves PT II- Change is Coming!

Citigroup to Ease Foreclosure Process

What is wrong with this industry?

REOPRO 4000 WOW!!!

NOT "just another REO" !

Do BPOs Actually Lead to Listings?

Keeping things confidential;

SEC Charges State Street for Misleading Investors About Subprime Mortgage Investments

LAMCO Bolsters Disaster Recovery Plan for REO Properties

WOW, 7 MILLION houses in default.

Connecticut is enforcing PTFA

REO Transaction Management Software - Part II

The new "Mob"

Short Sale Agents: Inform Your Clients of Possibility of Deficiency Judgements (Article)

Because of the volumes the learning curve is steeper in New York....Jumping on the REO wagon

Is this a source of lessons learned? California Revokes Record Number of Real Estate Licenses

The Weather is Changing

Search Engine Traffic vs. Social Media Traffic? Which is Better?

The game of CAT and MOUSE

Is It Wrong to Make a Profit as a Real Estate Investor?

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