Category Archives for "REO/Foreclosures"
News and information relating to REO’s/Foreclosures
News and information relating to REO’s/Foreclosures
For IMMEDIATE Publication
June 14, 2010
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Nancy Braun of Women in Defaut Serivces Attends Open Door Institute’s REO Expo
Charlotte, North Carolina – Nancy Braun, Showcase Realty, recently attended the first annual Open Door Institute REO Expo held recently at the Dallas Hyatt Hotel.
According to Nancy Braun, the REO Expo brought together more than 1,500 real estate agents, brokers, asset managers and vendors that came to the event in Dallas, including nearly 100 members of Women in Default Services (WinDS), of which Braun is a member..
“We were excited to see so many WinDS members attending this special event,” said Braun, who indicated that over 40 additional attendees joined WinDS.. “Our growing mortgage default servicing industry trade association, which was created by, for, and about women, to receive training, education and mentoring designed to enhance their knowledge about the latest trends in the default servicing industry were well served by attending the REO Expo.”
The REO Expo was put on by the Open Door Institute, part of REO Insider, whose parent company is the LTV Group. The inaugural event featured noted economist Christopher Thornberg and NFL Hall of Fame running back Emmitt Smith, who gave a memorable and inspiring motivational presentation, as well as many industry leaders and who discussed a myriad of issues affecting the mortgage default industry and the general economy.
“Our trade association is focused on recognizing the contributions and advancing the careers of women professionals who are employed in some capacity related to resolving the real estate lending and foreclosure crisis,” said WinDS Executive Director, Shelley Kaye. “The REO Expo was an excellent educational and networking opportunity that we encouraged our members to attend because we felt it would enhance our mission.”
The default services business comprises a multitude of disciplines and a wide variety of activities that are essential to the goal of handling the glut of foreclosed properties negatively impacting the entire U.S. economy. Women are playing a huge part in this business and are seeking a better platform to lead and share their ideas for solving the crisis. Although many of the large lending, servicing, and property maintenance firms are headed by men, there are notable exceptions.
“The members of WinDS, are involved at all levels within this niche of real estate,” according to Kaye. “Many of these successful members own their companies, while others are engaged as independent contractors or employees at firms of all sizes in every state.
“There is a renewed emphasis on finding qualified service providers who are women and minorities. One of the main purposes for WinDS is to attract the attention of business sources, such as REO asset managers with corporate or government-owned portfolios, so they can connect with qualified women to meet the needs associated with liquidating those properties.
For more information about WinDS you can call Nancy Braun at 704-889-5600 or you may visit their web site at www.CharlotteREOBroker.com, www.ShowcaseRealty.net or www.WomeninDS.com.
Trulia.com and RealtyTrac recently surveyed US adults to get some insight into what people think is involved with buying a foreclosure. Here are the Top 10 Myths that were recently posted on Trulia.com and the facts to set the record straight:
1. Foreclosures need a huge amount of work. 92 percent of consumers expressed that if they bought a foreclosure, they would be willing to make home improvements after they closed the deal, with 65 percent being willing to invest 20 percent or less of the purchase price. Although stories of foreclosures missing plumbing and every electrical fixture are very memorable, many foreclosed homes need only the (relatively inexpensive) cosmetics that many new homeowners want to customize no matter what kind of home they’re buying: paint, carpet, etc.
2. Foreclosures sell at massive discounts, compared to other homes. Almost every member – 95 percent – of the surveyed group expected to pay less for a foreclosed home than for a similar, non-foreclosed home; 18 percent had realistic expectations of less than a 25 percent discount. However, 36 percent expected to receive a bargain basement discount of 50 percent or more off the value of a similar non-foreclosure. Reality check: while foreclosures might be discounted massively from what the former owner paid or owed, their discounts are much more modest when compared to their value on today’s market and the prices of similar homes.
3. Buying a foreclosure is risky. 49% of respondents said they perceived buying a foreclosure as risky. And yes – buying a foreclosure at the auction on the county courthouse steps can have risks, including the risk the new owner will take on the former’s owner’s liens and other loans. But most buyers looking for foreclosures are looking at bank-owned properties, which are listed on the open market with other, ‘regular’ homes. Buying these homes is really no more risky than buying a non-foreclosed home
4. You can’t get inspections on the property when you buy a foreclosed home. County auction foreclosures don’t often offer the ability for buyers to have the homes inspected. But virtually all bank-owned properties for sale on the open market not only allow, but encourage buyers to obtain every inspection they deem necessary. This is because almost every bank sells their foreclosed homes as-is, and they want to avoid later liability. It’s in everyone’s best interests to make sure that the buyer has full information about the property’s condition before they close the deal.
5. There are hidden costs to watch out for when buying a foreclosed home. Sixty-eight percent of survey respondents who felt there is a negative stigma to buying a foreclosure expressed the concern that buying a foreclosure poses the danger of hidden costs. At some foreclosure auctions, there are buyer’s premiums and other hefty fees that can really add up and take a chunk out of the effective savings the buyer stood to realize. However, when you buy a bank-owned property that is listed for sale with a real estate agent, the closing costs are the same as they would be if you bought a non-foreclosed home. Overdue property taxes, HOA dues and other bills left behind by the defaulting homeowner are cleared by the bank that owns a foreclosed home before it is sold on the market, though these items should be watched out for if you buy a home at the county foreclosure auction.
6. Foreclosures are more likely to lose their value than “regular” homes. Thirty-five percent of U.S. adults who believed there are downsides to buying foreclosed properties believed this myth. In fact, because foreclosures often offer a discount from the home’s current market value, they may offer some degree of insulation from further depreciation. Whether a home loses its value or not has to do with the dynamics of the local market, including the area’s supply of homes, demand for homes, interest rates and the health of the employment market – not with whether the home was or was not a foreclosure at the time it was purchased.
7. Most foreclosures happen when homeowners just walk away. Out of homeowners with a mortgage, only 1 percent said walking away from their home would be their first choice if they were unable to pay their mortgage. And a whopping 59 percent of mortgage-holders said they wouldn’t walk away from their home – no matter how upside down they were on their mortgage. Most foreclosures happen when the owners lose their jobs or their mortgage adjusts to the point where they absolutely cannot pay the mortgage, no matter how hard they try. Voluntary ‘walk-away’s are simply not as popular as many people think.
8. When you buy a foreclosure, you should lowball the bank – they are desperate to get these homes off their books. Stories about in the press abound about the large numbers of foreclosed homes the banks have on their books. We’ve all heard the adage that banks have no interest in owning these properties. But the real deal is that they’re simply not desperate enough to give these places away. Also, the banks mostly service the defaulted loans – they don’t own them. Various groups of investors do, and they hold the banks accountable to selling the bank-owned property at as high a price as possible, helping them cut their losses. Many banks won’t even consider lowball offers, and many bank-owned properties actually sell for above the asking price. Before a bank will take a lowball offer, they will almost always reduce the list price first, and see if that attracts a higher offer than the lowball one they have in hand.
9. You need to be able to pay in cash in order to buy a foreclosure. Again, if you buy a foreclosed home on the county courthouse steps, you might need to bring a cashier’s check and be ready to pay for the place on the spot. By contrast, bank-owned homes are bought through a more normal real estate transaction, which means buyers can obtain a mortgage to finance the home just like they would if the home weren’t a foreclosure. It is true, though, that in some markets, banks prefer offers from cash buyers, but this tends to be in situations where the property’s condition is pretty dire, and the bank knows this may make it hard for a buyer to obtain financing.
10. It’s easier to buy a foreclosure with bad credit if you get a mortgage with the same bank that owns the property. Think about it: why would the bank want to end up with the same property as a foreclosure, again? Well, that’s what would happen if they allowed buyers with low credit scores to buy their foreclosures just to earn the interest on the mortgage. In reality, many banks do offer incentives like lower fees or closing cost credits for buyers who use their bank for their mortgage. But the buyers must meet the same credit, income and other qualification standards as anyone else would to seal the deal.
The time has never been better to take advantage of the many Charlotte real estate investment opportunities. According to FinestExpert.com, Charlotte is a Top 10 Market for Real Estate Investments.
The FinestExpert data would confirm that Charlotte is an ideal buy-and-hold real estate market. For the first-time homebuyer, a property could be found for less than it would cost to rent if the cash flow is right. For the investor, a strong buy-and-hold market could be an ideal starter property.
But before moving to invest in this undervalued market, make sure you understand the basics of a real estate short sale, and then get the help of a licensed Realtor in the Charlotte area.
Essentially, a short sale involves purchasing a home for a sum that is less than the amount owed on the home. Why would someone want to sell a home for less than what is owed? The reasons are sound.
A bank may be able to save a lot of money by letting a house go in a well structured short sale. If the property ends up on the court house steps, they could lose much more. That does not count the costs of staff, legal work, etc. The trick is being able to do two things well: 1) negotiate a good price for both parties involved in the deal, and 2) be able to keep the paperwork moving through the bank in a speedy manner.
This is where a licensed Realtor can help. A qualified Realtor can help you navigate the waters quickly and easily, and make a challenging process seamless. A realtor can also save you money. A well negotiated short sale can allow you more money to put into improvements, especially those qualifying for tax credits under the economic stimulus plan for 2010.
This is a great time to find Charlotte real estate investment opportunities, whether you are a soon-to-be home owner or an investor looking for properties to add real estate to an investment portfolio.
Fannie Mae says it will cover the closing costs on purchases of its REO homes – an incentive the GSE hopes will help it pare down a bloated supply of repossessed foreclosed properties.
The nation’s largest mortgage financier has announced a temporary seller-assistance program under which people purchasing a property through HomePath, Fannie Mae’s REO disposition operation, will receive up to 3.5 percent of the final sales price, which can be applied toward closing costs or used to purchase appliances for their new home.
The offer is available to any owner-occupant who closes on the purchase of a property listed on HomePath.com before May 1, 2010, the company said. In addition, many Fannie
Mae-owned properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing, with as little as 3 percent down.
“Attracting qualified buyers to the market and reducing the inventory of vacant homes is critical to stabilizing neighborhoods and helping the market recover,” said Terry Edwards, EVP of credit portfolio management for Fannie Mae. “Many families are taking advantage of the federal homebuyer tax credit to buy a new home so this is a great time for Fannie Mae to offer some additional help.”
Recent data from Fannie Mae show an increase in the acquisition of foreclosed properties and an escalating rate of seriously delinquent loans, which means even larger volumes of REOs could be coming down the pipeline.
According to the GSE’s most recent quarterly filing, Fannie Mae acquired 98,428 homes through foreclosure during the first nine months of last year and sold 89,691 REO properties during the same period. But at the end of September, Fannie Mae still had 72,275 REO properties on its books, marking a 7 percent increase year-over-year.
Furthermore, Fannie Mae’s monthly summary shows significant growth in seriously delinquent single-family mortgages held or guaranteed by the company. Up from 2.13 percent in November 2008, loans three or more months behind in payments or in the foreclosure process soared to 5.29 percent in November 2009.
Equator, a technology provider for the default servicing industry headquartered in Los Angeles, California, has announced the launch of its new agent-initiated short sale feature. The new feature gives agents the ability to request a short sale on behalf of their homeowner clients, initially bypassing the lender to open up the process on their own.
“Traditionally, requesting a short sale meant borrowers had to call their lender, which was often a time-consuming process,” explained Chris Saitta, CEO of Equator. “Agents can now provide the additional service of requesting a short sale directly through Equator.”
Saitta says agent initiation makes the progression easier for both the borrower and the lender, and brings short sales to fruition in dramatically less time.
“Equator’s solution provides a borrower self -service portal where borrowers can upload financials and receive real-time status updates,” Saitta said. “It automates every step of the lender’s internal process facilitating valuation and approvals while monitoring the eventual sale.”
Saitta says many of the industry’s top lenders and servicers are either using or adopting Equator’s short sale solution, and the system has already started accepting agent-initiated short sales for a large national lender.
“Short sales are a great alternative to foreclosures, but without a comprehensive automation solution many have simply avoided them,” Saitta explained. “Equator’s platform removes these barriers to entry and allows everyone to realize the benefits of short sale.”
Lenders have the option to enable the new agent initiation feature. According to Saitta, agent initiation helps lenders by lowering their call volumes and involving their decision-makers quicker so they can be more responsive. Final determination of whether the property in question qualifies as a short sale is at the discretion of the lender or servicer.
Equator has handled more than $113 billion in default-property transactions. The company says with its configurable EQ workstation, EQ marketplace, and new “self-service” borrower portal, Equator is the preferred platform for seven of the top 10 lenders and servicers nationwide.
In addition to its headquarters in Los Angeles, Equator maintains field offices in Irvine, California; Dallas, Texas; and Denver, Colorado.