The Investor Insights » Foreclosures

Talking with Realtors Regarding REO’s

lassiter — Mon, 05 Jul 2010 18:07:13 +0000

Purchasing REO’s is one of the best investments you can make these days. However, if the bank will not negotiate with you directly on their REO listings you will have to contact a Realtor to view the property and make an offer. Banks usually list their REO properties

Where’s the Foreclosure Help for Real Estate Investors?

lassiter — Wed, 21 Apr 2010 18:56:16 +0000

Owner occupants are not the only ones facing foreclosure. Investors are losing multiple properties as a result of defaults in their mortgages. In fact, 1/3 of foreclosure properties are owned by distressed investors according to Housing Predictor. Finding a mortgage modification or debt forgiveness is difficult for investors because most banks are not willing to cooperate. All the government programs have been focused on helping residential owner occupied borrowers and excluding investors. A study by Housing Predictor shows that investor owned properties are being foreclosed upon faster than owner occupied properties. The study revealed that 4 in 10 investors who lost their property to foreclosure owned on average at least three properties that ended up in foreclosure. Figures could increase as more investors throw in the towel realizing that they are not going to see property values rebound on their investment properties. There are no immediate plans for any foreclosure programs to help investors so investors are on their own to solve their own financial problems. This could really have a huge impact on the economy this year with more than 3 million foreclosures expected in 2010. What can investors do? Lease, lease option and other creative owner financing stratgies are all alternative options to letting your investment property go to foreclosure. You may also want to look into selling the property by fractionalizing it if you own investment property in a vacation destination, and there are no homeowner rules or state laws preventing you from doing so. Fractional real estate can be sold for more money because several buyers by a share of the property divide their weeks up and also share in the property taxes, insurance and maintenance of the property. Sometimes, though it is just better to cut your losses and move on as painful as that may be. But on the flip side there are some very good investment opportunities to purchase distressed properties right now, so there is opportunity for future profits.

Opportunities in Distressed Luxury Homes?

lassiter — Mon, 12 Apr 2010 23:03:20 +0000

According to a recent report from First American CoreLogic, distressed properties made up approximately 29% of all U.S. home sales in January 2010. REO’s rose to 22% of the homes sold, which was an increase from 19% in December 2009. Short sales were also on the rise in January, they accounted for 8% of the home sales as opposed to 7% in December 2009. If you add all those together, distressed sales made up 59% of the home sales in January. Average sales prices were $247,700 for non-distressed sales, $141,900 for REO’s and $215,300 for short sales. Real estate experts are predicting that the distressed sales will continue through 2010 and into 2011. High end properties are also expected to be the next wave of foreclosures. FirstAmerican Corelogic reported that in 2009 there were 1,312 homes valued at more than $5 million that were in foreclosure or facing foreclosure auctions. Just for February 2010, they reported 352 homes were facing a foreclosure auction. According to a survey from FirstAmerican Corelogic out of 1,700 homes valued at greater than $4 million across the nation, 14.8% of mortgages were 90 days or more in default on their mortgages as of January 31, 2010. Those numbers are almost double of the 8.7% of homes with mortgages less than those that were also past due. Even if $4 million plus range more than you want to invest in, there are plenty of luxury properties in the $1,000,000 plus range as well. Although luxury high end homes are more difficult to sell because there are fewer buyers in that price range, if you can pick one up at an auction, it may be worth your effort. Turning Your High End Foreclosure into a Vacation Rental Home Luxury homes located in or near vacation destinations such as Florida, California,

HAFA to Help Shorten Short Sale Approval Process

lassiter — Fri, 09 Apr 2010 15:14:58 +0000

The government’s HAFA program that went into effect on April 5, 2010 should help shorten the length of time it takes a lender to approval a short sale. The HAFA program is an alternative for homeowners that do not meet the guidelines under the government’s Home Affordable Modification Program to receive a mortgage loan modification. The HAFA program is for sellers that want to sell their home as a short sale because they are upside down on their mortgage. This is great news for sellers, buyers and investors. There are a lot of good investment opportunities buying short sales. The biggest obstacle has been how long it takes to get them approved. Under the HAFA program, the loan servicer or lender has 10 days in which to respond to the seller whether or not they are approving the short sale offer. This is a huge difference in the way the short sale process has been handled up to now. It has been taking lenders anywhere from three months to six months and even up to a year in some cases to approval a short sale. The program is voluntary so both the lender and the seller must agree to participate in the short sale and close the transaction. The government is offering the lender and the homeowner incentives to close the deal. Here are highlights from the HAFA program: The borrower’s financial information and hardship letter that was submitted with their loan modification request is used in connection with the short sale determination. The borrower can obtain the pre-approved short sale terms the lender is willing to accept for the sale of the home before they list the home. This way, there is no guessing as to what price the lender will accept for the property. It lets the buyer/investor know the exact price they must pay for the home. Releases borrowers from any future liability or deficiency judgment against them by the lender. So basically, the short sale proceeds are applied to the loan and the bank writes off the rest of the debt. The seller owes nothing more on their loan. Provides the following financial incentives: $3,000 for borrower relocation assistance; $1,500 for servicers to cover administrative and processing costs; Up to $2,000 for investors who allow a total of up to $6,000 in short sale proceeds to be distributed to subordinate lien holders, on a one-for-three matching basis. Each individual lender has to create their own process and policies concerning their own HAFA. Hopefully, Bank of America, Chase, Wells Fargo and others will implement these changes quickly and stream line the process making it easier for all parties to close a short sale transaction.

Where Are the Biggest Commercial Foreclosures?

lassiter — Thu, 08 Apr 2010 01:30:37 +0000

CNN.com has a fun article featuring 10 big commercial “busts.” Their word choice; not mine. Hee hee. They are: Stuyvesant Town & Peter Cooper Village New York, NY General Motors Building New York, NY Treasure Island

FHA 90 Day Flip Exemption for Investors

lassiter — Sat, 16 Jan 2010 15:48:37 +0000

Calling all flippers! Get the party started because the FHA has finally come to their senses. Yesterday, investors were granted an exemption to the 90 day seller seasoning rule. Otherwise known as the anti-flip rule. They determined that properties take less than 90 days to rehab and making buyers wait increases holding costs thus making the properties less affordable and increasing the chance of vandalism due to vacancy. The waiver goes into effect February 1, 2010 and will last for one year through February 1, 2011. There are a couple of caveats: 1. All transactions must be arms length so no selling properties to your Mom. 2. If you’re selling for more than 20% of your acquisition cost, you must justify the value by providing documentation of your repairs and/or a second appraisal. Click Here to read the press release Click Here to read the full waiver I think this is fantastic news! Tell me what you think – leave a comment

Fannie Mae: America’s Biggest Landlord?

lassiter — Fri, 06 Nov 2009 17:16:30 +0000

Fannie Mae is going to let homeowners facing foreclosure rent their homes for up to a year to try to keep a bazillion foreclosures on its books from hitting the market. The new program is for borrowers who don’t qualify for or haven’t been able to get a loan modification, according to Fannie’s news