Archive for the 'Foreclosure' Category
“The 12 Days of Christmas” As Seen Through The Eyes Of The REO Agent.
The Twelve Days of Christmas
On the first day of Christmas,
my A.M. sent to me
An abandoned foreclosed property.
On the second day of Christmas,
my A.M. sent to me
Two discolored basements,
An abandoned foreclosed property.
On the third day of Christmas,
my A.M. sent to me
Three MMR’s,
Two discolored basements,
An abandoned foreclosed property.
On the fourth day of Christmas,
my A.M. sent to me
Four BPO’s,
Three MMR’s,
Two discolored basements,
An abandoned foreclosed property.
On the fifth day of Christmas,
my A.M. sent to me
Five angry Realtors,
Four BPO’s,
Three MMR’s,
Two discolored basements,
An abandoned foreclosed property.
On the sixth day of Christmas,
A.M. sent to me
Six outstanding bills,
Five angry Realtors,
Four BPO’s,
Three MMR’s,
Two discolored basements,
An abandoned foreclosed property.
On the seventh day of Christmas,
my A.M. sent to me
Seven winterizations,
Six outstanding bills,
Five angry Realtors,
Four BPO’s,
Three MMR’s,
Two discolored basements,
An abandoned foreclosed property.
On the eighth day of Christmas,
my A.M. sent to me
Eight missing lockboxes,
Seven winterizations,
Six outstanding bills,
Five angry Realtors,
Four BPO’s,
Three MMR’s,
Two discolored basements,
An abandoned foreclosed property.
On the ninth day of Christmas,
my A.M. sent to me
Nine scheduled lockouts,
Eight missing lockboxes,
Seven winterizations,
Six outstanding bills,
Five angry Realtors,
Four BPO’s,
Three MMR’s,
Two discolored basements,
An abandoned foreclosed property.
On the tenth day of Christmas,
my A.M. sent to me
Ten listing agreements,
Nine scheduled lockouts,
Eight missing lockboxes,
Seven winterizations,
Six outstanding bills,
Five angry Realtors,
Four BPO’s,
Three MMR’s,
Two discolored basements,
An abandoned foreclosed property.
On the eleventh day of Christmas,
my A.M. sent to me
Eleven pipes a bursting,
Ten listing agreements,
Nine scheduled lockouts,
Eight missing lockboxes,
Seven winterizations,
Six outstanding bills,
Five angry Realtors,
Four BPO’s,
Three MMR’s,
Two discolored basements,
An abandoned foreclosed property.
On the twelfth day of Christmas,
my A.M. sent to me
Twelve squatters – squatting,
Eleven pipes a bursting,
Ten listing agreements,
Nine scheduled lockouts,
Eight missing lockboxes,
Seven winterizations,
Six outstanding bills,
Five angry Realtors,
Four BPO’s,
Three MMR’s,
Two discolored basements,
An abandoned foreclosed property!
Fannie Mae: REOs moving back to market
Back in September, Fannie Mae responded to “Foreclosure-gate” by halting evictions and closings on all bank-owned properties whose loans were serviced by GMAC, Bank of America, PNC Mortgage, JP Morgan Chase, One West Bank, and Sovereign Bank.
According to a memo from Fannie Mae, those properties will start moving back into active, available-to-market status this week, meaning REO specialists can proceed with the marketing and closing of these homes.
Current Foreclosure Trends for October 2010
The purpose of the following statistics is to give a quick snapshot of the most current data available for a specific month in the Chicagoland area and also provide an overview of where Illinois ranks as a state.
If you follow these figures each month, you will have a clear picture of where we are now and where the market is going.
One in every 311 housing units in Illinois received a foreclosure filing in October 2010 according to RealtyTrac.
The foreclosure activity in the Chicagoland area shows Cook county number one with 9,040 in new foreclosure activity.
New foreclosure activity as defined by RealtyTrac is the total number of properties that received a foreclosure filing, default notice, foreclosure auction notice or bank repossession in the most recent month.
Top 5 foreclosure activity counties in Illinois
- Cook 9,040
- Lake 1,465
- Will 1,379
- Du Page 1,232
- Kane 1,037
Basically 49% are in pre-foreclosure, 29% public auction, 22% bank owned.
Foreclosure activity in October for the United States as reported by RealtyTrac shows Illinois to be #4.
- California 66,475
- Florida 56,858
- Michigan 19,288
- Illinois 16,969
- Arizona 16538
- Georgia 14,850
- Nevada 14,205
- Ohio 13,233
- Texas 13,008
- Washington 6,346
This is only part of the picture as to where the market is heading.
Now take into consideration the estimated 7 million in “shadow inventory” and the current freeze on REO properties due to the “Robo signing” debacle and we have a whole new set of problems which I will discuss at a later date.
I welcome your feedback and would like to know of other topics you may want to discuss regarding foreclosures, short sales, and REO (bank owned) properties.
Foreclosure Freeze is causing the Big Chill with Closings
The chill in the air today is not just from the changing of seasons. We are about to run into an iceberg with the near halt of distressed property closings across the country.
Is anyone aware that the majority of the REO properties that are under contract can’t close because they are now part of the moratorium?
Let’s look at this from the standpoint of the home buyer. They put an offer on a property that has been probably vacant for over a year. Their offer is accepted by the seller and a closing date set. They hire a mover, pack up their things only to and find out a few days before closing that they can’t close. There is a title issue and the closing is delayed indefinitely.
Feel the chill? Wait, it gets better. Now what happens to all of those properties that can’t close? They are put on temporarily off the market status and sit there, empty. The bank incures more holding costs, the realtor doesn’t get a commission, and the home buyer does one of 3 things; hangs on hoping the moratorium won’t last, buys another property, or pulls himself out of the market until Spring. We now have one more vacant property to deal with this winter.
Please understand that the robo signing needs to be addressed and that the potential for any errors must be minimized. This is just another side effect of the moratorium. What I am trying to draw attention to is the fact that the properties currently vacant, under contract, and ready to close must be addressed sooner and not later.
This along with the ever growing ”shadow” inventory and the backlog being created by the foreclosure freeze is going to make this a very, very long winter. BRrrrrrrrr!
Frank DeNovi: Upscale foreclosures are changing the game
Robo-Signing scandal could dramatically slow up the housing recovery
While we in the REO business saw this coming, I really don’t think the general public understands the impact this will have on the already anemic housing recovery.
When this started to happen and JPMorgan Chase and GMAC Mortgage announced they were freezing foreclosures, the general public thought it may be good to slow down the amount of bank owned properties already on the market.
What most people fail to understand is this is backing up the “Shadow Inventory” even further. The immediate affect is all of the bank owned properties currently under contract and set to close are either being cancelled or given a minimum 60 day extension.
We had dozens of properties scheduled to close this month. Over half were either cancelled or extended for 60 days. . The deals cancelled were purchased by average homebuyer’s’ expecting to move into their new home this month who now have no place to go.
The ripple effect continues down the line. With over 1/3 of all the home sales across the country being bank owned or short sales, the numbers become staggering. The foreclosure process and inventories will have to be depleted before we will be able to start to see the recovery for home values.
An insider’s look at an REO specialist — the properties
CLOUDY WITH A CHANCE OF FORECLOSURE
It is becoming more and more evident that the well intended loan modification programs such as HAFA (Home Affordable Foreclosure Alternatives) are simply not working as anticipated. These short sales are only a small part of the solution.
What we may see in the not too distant future is a swing from an emphasis on Loan Modification to Home Liquidation.
REO’s or Bank Owned properties continue to be growing at a faster rate than ever. The pipeline of defaults (Shadow Inventory) which will eventually become REO’s continue to swell.
There are an estimated 1.7 million shadow inventory properties which is substantially up from the same period last year.
The slowdown in the current REO inventory is due to the feeble attempt to short sale these properties. At some point, these properties will have to become REO.
Until we can get unemployment under control, this trend will probably continue.
WHERE IS THE SHADOW INVENTORY
For those of you in the business, you know exactly what I am referring to. For everyone else, time to let you in on what is coming.
According to the experts, the number of foreclosed homes in this country is continuing to grow. Numbers are constantly changing but the current amount seems to be around 1.7 million.
These properties are in some stage of default and are getting ready to hit the housing market. While this inventory has been rumored to be hitting the market for about a year now, this has not yet occured.
So this Shadow continues to loom ove the housing market.
Where are these properties, what are they going to do to the already fragile housing market and what effect will this have on the equity in your home or lack there of?
There have been several moratoriums put in place in order to hold off on the avalance of foreclosures. With the economy just now beginning to make a recovery, it is anticipated that the shadow inventory will slowly be released into the housing market as not to cause a double dip recession and put the economy back 12 months.
With most people’s largest investment in their home, driving down home prices further will only continue to complicate this situation of upside down mortgages, a slow economy, and unemployment. The inventory is going to have to be released slowly in order to keep balance not only in the housing market, but in employment and money markets.
So what does that mean? The housing recovery is vital to our economy. This will not fix itself orvernight. It is going to take time. Home values will not be able to increase and equity to return to homes until the shadow inventory is flushed through the system.
The housing market will recover, but not until the shadow of foreclosed homes are moved.
THE SHORT SALE – A Foreclosure Alternative
There are a multitude of things the homeowner faces today such as the unstable real estate market, the national economy, maintaining your mortgage payments, pay cuts, and loss of your job to name a few.
Being foreclosed upon in addition to everything else effects your credit score and can cause severe emotional stress.
The homeowner does have options which include reinstatement of their loan, a loan modification, forbearance etc which can all be a very long drawn out process.
Keep in mind, the main goal of a short sale is to AVOID FORECLOSURE.
First we need to look at what a short sale is:
A short sale is a real estate transaction in which the proceeds from the sale do not cover the balance owed on a loan or loans the owner may have on the property. Basically, the lender is accepts a discounted payoff on the loan and allows the sale of the property to close.
The bank will allow to discount the loan due to an economic hardship on the part of the mortgagor. The homeowner will then be able to sell the mortgaged property for less than the balance of the loan and turn all of the proceeds over to the lender.
This is accomplished through negotiation with the banks loss mitigation department. Basically, the lender is willing to take a loss now to avoid larger costs later.
The advantage to the homeowner is you avoid eviction, and avoid a foreclosure on your credit. While a short sale does affect your credit, it is far less than a foreclosure.
The downside of a short sale is that it is an extremely complex and is a highly specialized type of real estate transaction. The failure rate is extremely high with the time frame being approximately 75 days to obtain an approval from the servicer.
The Federal Government has several programs that should also be considered such as HAFA. You can get more information about HAFA by going to www.HafaProgram.com
