Foreclosures Down — But Are They?
June 12, 2009
We are getting some more mixed news this morning on national foreclosures. On one hand, foreclosures have dropped compared to last month. On the other hand, the number of foreclosures is above 300K which is still a HUGE number historically. Now that the foreclosure moratorium is beginning to lift, we will definitely see some of this type activity for a while.
In today’s Washington Post, they write:
Foreclosure filings fell in May compared with the previous month, but remain at elevated levels, according to data from RealtyTrac released today.
The firm counted 321,480 filings nationally, which can range from default notices to bank repossessions. That was down 6 percent from April, but an increase of nearly 18 percent from May 2008. RealtyTrac, a private firm, says its data include more than 90 percent of U.S. households.
Despite the dip, this was the third month in a row that foreclosure filings exceeded 300,000 and the third highest monthly total since the firm began collecting the data in 2005, according to RealtyTrac. The company estimates that in a normal market, filings would fall to under about 100,000 a month.
As we move forward through the coming months, we will continue to see a lot of mixed data such as this.
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Good News For Short Sale Investors
April 6, 2009
Its Monday morning so do you want the good news first or the bad news?
Since we mostly hear bad news these days, let’s start with the good news for a change. If you are a short sale investor, or someone considering getting into short sale investing, then you may be in luck. A new report from the Department of Treasury shows that banks approved almost 3 times more short sales in the 4th quarter of last year as compared to the first quarter.
Referring to the table and chart below, we can see that this is really a significant increase.
One of the biggest complaints of short sale investors has been that the banks are dragging their feet in getting their deals done. In part, this may be due to non-ideal techniques used by many short sale investors: there are some short sale investors that are getting a lot of deals done on a consistent basis. Even still, it sure would help to ride a wave of increasing short sales by the lending institutions.
If you are thinking about investing in short sales, you may want to visit this video that we put together.
So What Is The Bad News?
The bad news is that in all categories of loan defaults, foreclosures where just not getting any better by the end of last year…. Gee, isn’t that a surprise. While we will cover this topic in much more detail later, the short story (no pun intended) is that when you look at the number of loans that are
- 30-59 days delinquent;
- 60-89 days delinquent;
- 90 or more days; or
- Foreclosure in process,
all were going up over the course of last year. Looking at those stats, you know that we are not out of the woods yet. Unfortunately, many of these type detail reports are a few months behind so it is just one piece of the puzzle that we all need to be watching.
Fannie Mae Actually Helping With Short Sales?
March 26, 2009
You are kidding me right? A quasi-government institution actually doing something that makes sense and helping homeowners.
Realcomp II Ltd., Michigan’s largest Multiple Listing Service provider to real estate professionals, Thurdsay announced a partnership with Fannie Mae to create a pilot program for homeowners in fear of foreclosure or staring down the barrel of a short sale.
The program will help streamline the short sale process, making it easier for homeowners who are under water in their mortgages to sell, thus reducing foreclosures by allowing these homes to be sold rather than seized by a financial institution.
My personal experience is that the banks and related institutions are their own worst enemy in this foreclosure crisis. As an example, we had a 1.4 Million dollar, cash offer on the table to buy a complex in SW Florida. Even though the price was competitive, the bank never even bothered to provide any sort of reply to our WRITTEN offer.
Hopefully things are starting to change for the better.
Click Here For The Entire Story
291,000 Foreclosures in Feb. Creates Window Of Opportunity
March 25, 2009
Realty Trac has reported that there where another 291 thousand foreclosures reported in February alone. And this is despite the government actions to date.
While this is not great news for homeowners, it does present some interesting opportunities for investors.
NBC put together a well written piece that is worth visiting.
SYNOPSIS
The growing inventory of distressed homes on the market may be sending shock waves through the economy, but it’s also giving investors a wider window of opportunity.
Despite federal initiatives to stem the rising tide of foreclosures, some 291,000 foreclosure filings were reported in February, the third highest monthly total since RealtyTrac began following the data in 2005. Such filings include default notices, auction sale notices and bank repossessions.
Over the last three years, more than 4 million U.S. homes have been sent into foreclosure.
Whether you’re an investor looking to purchase a rental property, or a homeowner who’s ready to retire and move someplace more affordable, the price of foreclosed properties right now is right,” says Debra March, executive director of the Lied Institute for Real Estate Studies at the University of Nevada Las Vegas, the nation’s leading state for foreclosures.
Buyer’s Flocking To Cheap Foreclosures At Auction
March 23, 2009
In Glendale & Phoenix, buyers have been grabbing up some incredible deals by attending foreclosure actions. As reported:
“A Glendale home that sold less than two years ago for $259,000 sold again three months ago for $113,000. A Phoenix home that fetched $190,000 two years ago just went for $45,900. A Queen Creek home sold for nearly $275,000 when it was built in 2005. Last month’s price: $78,000.”
While this makes for great journalism, one thing that we encourage our club members to remember is
WHO CARES WHAT IT SOLD FOR TWO YEARS AGO.
That is totally irrelevant information at this stage and the only thing that counts is current market information.
Before entering into any such transaction, make sure you know the critical pieces of information:
- Price relative to current market value;
- Cost to repair;
- All issues related to title; &
- Rental amounts (even if you don’t plan to rent);
- Your plan for exit
In these crazy days of real estate, make sure you don’t get caught up in the excitement but instead, know your plan and stick to it.
The Risks and Rewards of Investing in Foreclosures
March 15, 2009
There are many different things to invest in these days. One investment route which individuals take is with regard to foreclosures. Foreclosures occur when the current homeowner of a property fails to pay their monthly mortgage and the property is repossessed by the lender. There are various risks and rewards which go along with investments of this type and some of these will be discussed below.
Advantages and Disadvantages to Buying Pre-Foreclosure Properties
One type of property sale which relates to foreclosures is the pre-foreclosure sale. A pre-foreclosure sale occurs when the lender allows the homeowner with past due mortgage payments to sell the home on their own and pay back the lender what they can from the sale of the home. The lender often agrees to this so that they do not have to get involved with possessing then reselling the home and the homeowner likes this option because it prevents foreclosure. The investor also benefits from this type of sale as well.
Some advantages to purchasing an investment property via pre-foreclosure sale include discounted price, speedy purchase and wonderful profit opportunities. As for the disadvantages, the investor who buys property by way of a pre-foreclosure sale may find that the homeowner is hard to contact and/or unwilling to sell, the research is cumbersome and there are other potential buyers who wish to purchase the property.
For those who wish to purchase property via a pre-foreclosure sale, they should do their independent research, approach the homeowner in a courteous manner and ensure that they make an offer that will not cause them to lose money in the end. By doing so, the investor may find that buying a house by pre-foreclosure sale will work to their advantage.
Advantages and Disadvantages to Buying at a Foreclosure Auction
Another way to purchase foreclosure property is through a foreclosure auction. Auctions of this type are usually held at the local courthouse of the county where the property is located within. This is a common way for foreclosed properties to be sold and this too has its pros and cons.
Foreclosure Investing - The Fastest Way To Get Started
March 7, 2009
Foreclosure investing is actually quite another world when people have finally taken that risk and go for it. This really applies to anything else in life. Remember all those late nights where you’d stay up and watch those “how to make millions in your sleep” commercials. Or perhaps you remember all those times you went to the book store and purchased tons of real estate investment study guides.
In fact you probably have a impressive home library and collection of real estate, investment, and how to get rich quick type books by now. Some people may get a feeling of being overwhelmed after wading through those thick books and studying all the complex terminology.
The truth is, if you are a naturally goal-oriented and self-disciplined person than you can probably achieve a full-time income in real estate within a year with the right system. So how do you choose the “right” system when everyone and his uncle says they are an expert or guru within the real estate domain?
One thing you might want to consider doing is to align yourself with a acquaintance or relative who is already successful in real estate investment or at least in the branch of real estate that you are interested in doing. Don’t be shy, definitely get in touch with them.
It may be a friend from high school or university, or perhaps even a former room mate that you knew when you were just getting started with your own life and needed someone to share the rent costs with in order to have your own place, etc. I am sure that if you brainstorm for a bit, you may even surprise yourself at how much opportunity there is in your own circle.
That is actually a very good idea- the number one way to get into real estate successfully is to have a mentor or at minimum someone that can really show you the ropes and provide feedback in real-time. No matter how well written the courses you’re looking at is, nothing really compares to a trusted friend or adviser that can actually walk you through this process step-by-step.
Understanding The 3 Stages Of Foreclosure
March 2, 2009
If you are like many people, you recognize that there is tremendous opportunity available in this real estate market. Let’s face it, we have not seen bargains like this since the 1970’s.
However, what many people also learn is that finding, buying, servicing, and reselling foreclosures is a lot of work.
If you are like many people, you recognize that there is tremendous opportunity available in this real estate market. Let’s face it, we have not seen bargains like this since the 1970’s.
Considering the home pictured to the left, you can try to acquire this home at 3 different stages:
- Preforeclosure - The bank has not yet foreclosed on the current owner;
- Foreclosure Sale - Typically auction style at the court house steps; and
- Bank REO - After the bank acquires the property.
PREFORCLOSURE:
In this stage, you are typically negotiating with the current owner to reach some sort of advantage
ous agreement. Unfortunately, many owners at this stage are very unrealistic in their expectations and as a consequence, many times you cannot get a good deal.
Also during this stage, you will have to have a stratedgy to deal with the underlying mortgage holder…. the bank. While there are many possibilities of how to accomplish this task, rest assured that unless you are trying to acquire $5M of property, you will not be high on the priority list of banks.
In short, this can be a very time consuming process where you need to look at many deals to get one.
FORECLOSURE SALE
The next option is to buy the property at the court house steps during a bidding process. In this case, you are bidding against many other professionals in the hopes that you can get a great deal. Of course, you have lots of issues like:
- You don’t know the minimum that the bank will take in advance;
- You cannot inspect the property (inside) before the sale;
- You will typically need to cash buy the property with 24-72 hours after the sale.
While some people make a living doing this, it can also be a very time consuming process.
BANK REO
This is our favorite stage to purchase….. after the bank has been forced to take the property back. In this case, there is two methods to buy:
Method 1: Bank REO’s go out to brokers at somewhat reduced rates. Generally, this is not your most advantegeous time to buy because the bank is still trying to maximize returned capital.
Method 2: Banks bundle 100’s if not 1000’s of homes together and sell them to private equity groups at pennies on the dollar because of the large volume that they buy. What BankREOSpecialists.com does is then bring those properties to you at incredible prices.
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Who Is "REALLY" Making $ In Today's Real Estate Market?
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