The foreclosure crisis leveled off in May as the number of people facing foreclosure was nearly flat from a year ago, according to RealtyTrac, a private foreclosure listing service.
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There is an recent article I found in the New York times, “Program Will Pay Homeowners to Sell at a Loss.” In an effort to end the foreclosure crisis, the Obama administration has been trying to keep defaulting owners in their homes. Now it will take a new approach: paying some of them to leave.
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Joker brokers, misrepresentation of packages, unauthorized use of POF’s, POF’s that can’t be verified, ghost REO packages, bank contacts that don’t exist, incorrect protocols, NCD, MFA, LOI, POF! Arrggh! Frustrated yet? After working with REO’s for nearly two years, I have tried to cleanse myself from the woeful misconduct and misrepresentation with my 99% rule.
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Recently I received a call from a colleague regarding an REO bulk package he had received from a broker. The package was in Southern California offered at $6M or a discount of .60 of current value of $10M. My colleague asked my opinion about such a package. I told him that if it sounds too good to be true, it probably is.
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The U.S. government is taking action to speed the resale of foreclosed properties by temporarily expanding access to Federal Housing Administration mortgage insurance, U.S. housing officials said.
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I often receive calls from buyers with lots of cash but nothing to buy from banks.There’s a lot of shared frustration for investors trying to find good discounted bank deals. Unfortunately, the opportunities to buy from institutions have dwindled to almost none from a year ago. Everyone wants California, Nevada, and Arizona at 60% – 65% but these discounts no longer exist. If you try buying from the banks today or Freddie/Fannie Mac, you can expect discounts of between 76% to 82%. But there are groups of investors who have devised some creative ways to get those discounts between 60% to 70%.
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When troubled homeowners and banks battled over delinquent mortgages, it wasn’t a contest. Homes went into foreclosure, and lenders took control of the property. Even so, banks and borrowers still do battle over foreclosures on an unlevel playing field that exists in far too many courtrooms. But some judges are starting to scrutinize the rules-don’t-matter methods used by lenders and their lawyers in the recent foreclosure wave. On occasion, lenders are even getting slapped around a bit. One surprising smackdown occurred on Oct. 9 in federal bankruptcy court in New York. Ruling that a lender hadn’t proved its claim to a delinquent borrower’s home, the judge wiped out a $461,263 mortgage debt on the property. That’s right: the mortgage debt disappeared, via a court order.
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You received a tape of REO properties. You’ve done an initial review and like what you see. The location is fine and the price is in line with your expectations. Now comes the time to make an offer to purchase. Depending on the types of deeds being conveyed will determine the purchasing process. Here’s a guideline of what you can expect.
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Everyone wants to be direct to the bank when buying. Who wouldn’t. You get the best deals. You negotiate directly with the bank asset manager. Properties are free and clear and you close quickly. This is what most buyers would like to hear but the reality is much different. Unless you are a large hedge fund with deep pockets and even deeper long standing relationships with banks, you will be sorely disappointed. So how does one actually buy directly from the bank. You have three choices.
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Buyers hate to bid. They want to know the price. Even when the do, a buyer will still submit an offer below the posted price. There are many reasons why buyers do this. They don’t agree with the seller’s BPO’s; their due diligence discovers the FMV is less than what the seller states; the properties are in poorer condition; perceived market fluctuations and the list goes on. One way to resolve these issues is to put it out for bid without any pricing. No! Not a bid! Why when sellers decide to put out a package for bid, buyers get revolt? Fixed price gives a buyer more control but a bid price, well, that puts the control squarely back in the seller’s hands and buyers don’t like. Believe it or not, there are more opportunities to buy via a bid then a fixed price.
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