I'm just curious what the REO list agents are hearing around the country from their AMs and Clients regarding the upcoming flood which we have been told would hit in April, then May, then June for sure... I've had on my life-jacket for three months now. I've been told by some of my clients are staffing-up, the property preservation companies I work with have said there are thousands of properties in pre status right now. The moratoriums have expired and the new Calif moratorium (90 days starting in June) was only for banks that did not already have a loan-mod program in place so what's the story you have been hearing?

Four words, two phrases:

"shadow inventory" "market manipulation"

No tidal wave of LISTINGS.

I was thinking about this today. Especially if you mention your property preservation companies saying there are many in pre status. If there were that many in pre status don't you think they would be assigned to listing agents as well? Who's doing the weekly checks? I do agree though that there are many REOs in the process but just having the actual foreclosure sale delayed. I watch my counties foreclosures and see many many in the elections and demand reports (NOD). But relatively few actually end up to auction compared to even 6 months ago in my area.

I just got CMA today from Ocwen, usually a good sign as that is us doing an appraisal for the listing agent's assignment.

We also did 2 this past weekend that were vacant lockbox, BPO's, so definitely going to be listings.

Just do the math---there was a foreclosure freeze starting in December until April,at least here in Fl.

So now you're going to see the evictions happen, and all the failed short sales get listed. IMO.

One of my clients, GRC, just selected 250 agents to be in "preferred" status nationally. That means they will be the go to agents within a 30 mile radius of their zip and further out in rural areas. And also they have implemented an approved short sale process that basically makes the property an REO with slight differences. My team was lucky enough to be selected for our area and we have been getting 1-2 listings daily since then. With my other clients it has been fairly slow.

Foreclosures are ramping up not a lot has been flowing into the market and the market could definitely use the supply. I dont subscribe to the shadow inventory theory though of masses of foreclosures already foreclosed but sitting off market. Sure there are some, there are always some, but not in the numbers I think people are hoping. Where the shadow inventory lies is in the huge number of NTS that are filed in CA but lenders holding off foreclosing. Once they do foreclose the property gets put into the servicers system and processed normally in my observation.

Here is a LA County specific snapshot of trustee sales. For June it is current up to the end of business day on the 15th. REOs for June are on pace to almost match last September.

Click for the graphic: http://img195.imageshack.us/img195/2315/fclaxmidjune2.jpg

EDIT: Here is the foreclosure radar California report, you can see the large NTS filings, many of those are being delayed so the NTS backlog is quite large and isn't accurately represented in the graph : http://img32.imageshack.us/img32/6937/foreclosureradarmay09.jpg

So a wave is coming, how big it is is anyones guess at this point. The lenders are really holding off foreclosing, they are only taking back 15% of scheduled sales any one day. Last year at this time it was around 50%. NTS continue to build.

Great informative post! Thanks for the links.

I've heard that Clients are holding off to control Supply/Demand to drive up values. Not sure if that is what you are referring to with "market manipulation" but in case that's not it can you elaborate? Thanks!

I don't know if it's coincidence or the 'flood' coming but....I got more this week than I have in 4 months. But to be perfectly fair, i just closed the ones I had and did a kick [censored] job so it very well could be...I rock. I'm leaning toward...I rock;)

can do, i'm with you on this, but i sure hope were wrong...

Well done! LOL

From what I understand, lots of Option ARMs are getting ready to resent in the next few months, and this stage will last approximately three years. These are going to include many high end properties, which will be the next tidal wave I think most people are referring to.

Good for you Madhatter. Riding High. That is very cool.

Wilshire sent out something today saying they were tossing out another 30 day bone to folks with foreclosure issues. They sounded like this was the last one they were gonna toss.

I think CanDo's 4 words say it all... and I believe that some market manipulation is good. Why flood the market only to keep driving prices down into the ground? That hurts everyone.

Tidal Wave... is this what REO agents are really hoping for??? This would mean working 14 to 16+ hrs a day with an occassional day off (if you're lucky) and work under a stress load that could easily become unbearable. Some of us are already doing that, so can you imagine adding to that workload? We all think we're ready... but a "tidal wave" might be more than what we really want to tackle. What's wrong with spacing the inventory out so the market isn't flooded?

I, for one, hope it's maniupulated to some degree to prevent a tidal wave. This would mean that REO inventory will continue to enter the market for a longer time period but with managable flow rather than an oversupply hitting the market in a short time period which would further deteriorate our values. I really do NOT want to see a Tidal Wave! I truly believe it hurts everyone... including the REO agents who are dying to get a good ride on this. (just my 2 cents)

Myself, I would love a tidal wave and they have been coming in fast recently. REO's are about volume unless your a lone agent without a team. Banks like brokers who can handle alot and efficiently. That's why we have REO kings and queens. I have to split every deal 3 ways so we need the volume to make it profitable and keep everybody on our team making money.

It seems my clients are looking to consolidate their agents and put more listings in fewer hands. And those listings go to the agents that have proven to be able to handle the volume.

In my area of Florida we are seeing REO listing spread out among many, many new REO agents. The big time REO kings are still there but not dominating as they did until the last 6 months. Have also heard Asset managers comment that the trend is AWAY from dumping large volumes of listings on 1 office. Also recently picked up a few 120 day out reassigns from one of the REO kings in the area..

Getting those properties reassigned from the kings/queens is a great way to make a name for yourself if you can move them. It's a great opportunity you have there.

Up here it's dominated by kings/queens. I have heard that certain clients are trying to spread them around but then I see the kings/queens opening additional offices and adding agents in an attempt to keep their inventory. That way they still get the bulk of the inventory. I almost considered going to work for one of them who consistently has over 400 listings but after the interview I decided to stay where i'm at and build on what I had. They wanted me to hand over all my clients to them and just service their listings for 35% and I wasn't willing to do that.

Back on topic, this month we got flooded with new listings and it doesn't look like it's going to slow down for a while.

One Reason for the flood if not Tidal Wave is the new law passed May 20th concerning saving homes which the banks hoped would give them the cash difference between what was owed and the amount they would modify to. It also allows tenants 90 days or the rest of the term of a bonified arms length lease whichever is longer. They had to set up systems to manage the occupied properties which will be in place in mid to late july.
Now that they know that the Gov. is not going to put as much money into loan mod and the rules are more restrictive than originally lobbied for they will put them on the market. There are between 800,000 and 1,000,000 properties in the US that have been held off the market in the past 6 months.
Also, Credit Suisse puts out a nice chart that shows not only ARMs that are up for reset but also the Alt-A's that have not yet really started to reset. Current numbers say just shy of at TRILLION dollars worth of loans will reset in the next 3 years with an anticipated 80% defalt rate expected on Alt-A's. Short answer REO is going to go like gangbusters for at least the next 3 years. What the chart in the link (in a later post) does not show is that there was a Significant dip in the number of loans that reset in lat 2008 and early 2009. The moratorium hit at a time when, by comparison, significantly fewer loans were reseting. However, this is only a temporary dip and is starting to rise right now.

Grampa, can you post a link to that Credit Swisse chart?

Yes I agree that REO is going to be a good business for the next 3-5 years but a dozen listing right now would be nice. We've only received 6 new listings so far this year and all of them were last month.

bratchy,

Some story here in the Berkeley. I cover SF and the east bay, and I've only gotten 7 this year myself. However, only one of them was in the last 2 months. No 'tidal wave' here.....

Meanwhile, I could do 500 BPOs a month if I wanted to (I'm doing about 70-80 a month on average for the last 2 years).

I have sold 13 REOs this year. With no new listings since March 2009. I am glad I "conserved" my income from 2008.

For some reason, I am doing more bpos from "new" companies that give listings; two of the companies I have been trying to get bpos for two year. I decline bpos from bpo mills - for me they are waste of my time and too much aggravation with quality control.

With everyone's opinion about REO tidal waves, moratoriums etc. I think 2009 is shot. I am tired of calling asset companies hearing "we are slow, there is a moratorium, as soon as I get something we will send something." I am tired of the scammers coming up with this "new REO agent/broker" website asking for $200-$500." Yeah whatever!!

I am going to just enjoy my free time and summer and when the listings pick up they pick up and I will be ready and rested.

I know on the MLS I see people with REO listings that were definitely not in the game 18 months ago. So it will be interesting to see what actually occurs. I hear from buyer's agents, contractors and others about how some of these "listing agents" do not know what they are doing. All unsolicited remarks.

I am kind of sick & tired of the so called experts and everyone talking about who they talked to on the inside who gave them some inside information. I am concluding it will happen when it happens - I am going to just live my life. Wow. I guess I needed to rant!!

Over & Out.

A couple of the big queens and kings in our area have slowed down tremendously, I see a lot of new REO Agents popping up everywhere. Maybe the banks are actually seeing the light and letting others have a crack at the REO biz. As far as them coming on the market, I am still waiting for the spout to be turned on high.

I've watched REO's pop up on the MLS with new names over the years. The usual career arc for an REO agent is about 1-30 REO listings before they start to make mistakes and shoot themselves in the foot with the asset managers.

Wait 6 months and see if those agents are getting any new listings.

There is a reason every market has REO kings and queens. They know how to handle the workflow and know what their clients want.

I agree

Jim,
I researching the link I ran across some info that questions the accuracy of the chart that I spoke of. Interesting read non the less. I have added the link to the blog questioning its accuracy as you can see what it is there.
http://healdsburgbubble.blogspot.com/2009/05/reset-chart-from-credit-suisse-has.html

Please note when you are looking at that chart that if you push the option arms that probably will not recast when shown (due to not hitting the 125% mark) but at the 5 or 10 year date takes some of the bumps out of the chart. Shortening the peaks but taking the depth out of the valleys until 2014 or 2015. It also takes about 1-2 years from when the mortgage recasts or the regular arms reset until a property sees the market. Not from foreclosure but from when it resets due to people trying to hang on then getting behind enough to get served plus the foreclosure process time etc. My best guess we will be pretty steady through 2016. CA, FL, & NV have the vast majority of the Option type arms that allowed for negative amortization so the rest of the country will not be affected as much by them.

I got tired of hearing about the banks holding properties off the market so I did some investigating today.

I've noticed that all year the foreclosures were all being postponed by the lender. In my area,last week was the first week that the banks stopped postponing the trustee sale and actually took homes back.

I was not getting any listings so I decided to go drive by the 20 homes closest to my office that went back to the lender last week. I wanted to know if the banks were foreclosing and then sitting on them.

Here are my findings.

13 of the homes were occuppied by the former owner or a tenant.
5 of the homes were in the possesion of a realtor.
Only 2 homes were vacant but not in the possesion of a realtor yet.

It is clear that the banks are assigning the homes to an agent as soon as they take it back.

I was surprised at the high number of homes that were still occuppied. This falls in line with my experience with the 7 listings I received last month. Lots more CFK's in our futures.

So I believe that the banks have been postponing all the foreclosures all year as they tried to do loan mods. They starting taking them back last week and they are assigning them to agents right away.

No market manipulation they were just trying to do a good faith effort to modify loans.

I know this is waaaay to small of a sample to be scientific but it is good anecdotal evidence.

I know people hate to share info but can someone give me advise on getting REO listings. I have done 1000's of BPO's but cannot seem to connect to the proper people to obtain listings.

Geewhiz, You're about to get slammed by all the usual suspects, but not by me.

I will simply post the same advise that i've posted several other times on this site. Nobody ever seems to listen or even acknowledge, but I know that it works. If you want to be good at something, find out who's already good at it, and then go there.

That's how I wound up at an REO specialty company. Because I sought them out at every opportunity and then I got lucky. Any time you are doing a second opinion BPO on a vacant REO property, that is an opportunity to network with someone who knows more about this business than you do. Take those opportunities. Ask, Ask, Ask. You never know where it might get you.

Oh never mind, nobody ever listens to me anyway.

Good work bratchny. I officially nominate you as the boards "Investigative Reporter". Keep up the good work.

Rocky I listened but with a new twist..

Joined a big brokerage that 2 of the queens in the area bought. Looks like at just a few weeks in it's gonna pay off nicely. Already picking up plenty of tips from their staff.

Sarasota County's ROCKET DOCKET doing 400 per day but, slowing the process by requiring lender attorneys to show up in person.

Published: May 29, 2009

SARASOTA - Lawyers and frantic homeowners cram together, creating a standing-room-only crowd before Judge Harry Rapkin's foreclosure court.

One by one, homeowners detail their battles with the bank.

"I'm just sending in all my financial papers and waiting on a response," said one man.

"I lost my job a year ago," said another.

Rapkin, now retired, comes in on a part-time basis to oversee what's become known as the "Rocket Docket."

And he gave everyone the same advice: "You need a lawyer."

Rapkin also gave more time to folks who need it. Rapkin ordered as much as 120 days before the home goes up for sale at the county courthouse.

The court, aimed at moving foreclosures through the judicial system at a quicker pace, stems from an effort to unclog dockets and still give the little guy a voice.

An order issued this spring from 12th Circuit Chief Judge Lee Haworth requires banks talk to their clients before heading to court and mandates the banks' lawyers show up in person.

In court today was lawyer Tanya Simpson of Fort Lauderdale, who was representing a firm handling 66 foreclosures. The new order gives Rapkin the power to tell lawyers, like Simpson, to re-file and start over if a client fails to follow the rules.

"If this were to be on the regular judge's calendar they would get nothing else done," Rankin said. "Each one would have to be set for 15 minutes each. I did 200 this morning I think, with more this afternoon."

By the end of the morning, Rapkin said the rocket had launched. He set uncontested mortgages for sale at a record pace. One home was valued at $800,000. In Sarasota, the "Rocket Docket" takes off every two weeks.
---------------------------------------------------------------

When I say they are holding them off the market I did not mean to infer that the banks already had the properties. I meant that they have been holding off on foreclosing a lot of them waiting to see what the Gov. would do. A lot of people in foreclosure are getting educated as well and are better at stall tactics. It is building a backlog bubble and it will break eventually.

Received 10 new assignments in June. It was our best month in a while, but still down about 50% from where we were last year. Anybody else out here in CA picking up the pace a little?

I have seen an increase in assignments since March. I had been slow before that. I have the same number of listings I had this time last year, but have added a new client.

Still slow for me. I know of two people personally who are behind on payments. One is 5 months and the other is 8 months and both have not had the sheriff sale. The one that is 8 months behind called the bank after 3 months and told them he was moving out and they havent done anything yet. The hoa took him to court because he is still the owner, and now hes stuck paying $200 a month for hoa fees.

Maybe the banks, seeing how the prices went down, are releasing their REOs at a lower pace to not overflow the market and keep the prices from going down more. The first trimester of this year was good but I notice a decline once we started in May.

Trimester? looks like the baby is overdue to me.

http://www.bradenton.com/business/story/1599707.html
Makes specific mention as to banks not taking title late last year and early this year and that many are in the process but not completed. This was due to the moratoriums (which only postponed the inevitable) and the Saving homes program.
It also mentions that those loans modified under the Saving homes program will have a 75% default rate in the future.

Grampa-you post some interesting stuff!!

4th quarter is what a VP of BofA said today they are dumping on the market

Everyone and his long lost uncle is making the "Tidal Wave" predictions. Kind of like the people predicting a bubble starting in 2004. Eventually one of them will be right and can crow about it.

Fannie Mae owned homes are going to skyrocket...

We got approved by a company called "Tenant Access" to handle the tenants in foreclosures due to the new law that went into effect around May 20th. This is another of the multiple reasons that title has not been taken on a lot of properties. They do not have the systems in place yet for being able to comply with the new law.

Our areas REO inventory is so low we are selling out of short sales. Bad for us as I used to look at the short sales to see what our future REO inventory is going to be.

Time will tell.

I heard the same thing about June.


Didn't happen.

Our main customer is weeding out underperforming agents. They had actively recruited agents and they are removing the ones that have not worked out as well.

Now Grampa! Shame on you! You have just made all the agents that have not got recent assignments say "Am I one of the agents being weeded out?!" It's all speculation anyway. There are a myriad of stories aren't there? I started this post and appreciate everyone's contributions.

I wonder if your main client is the same as my main client... Fortunately, I always deliver and my AMs express their appreciation frequently. Which reminds me, we had 4 close today

I believe that the 4th quarter is when the banks are going to release the REO's. Banks like to save their losses and take them all in the same quarter. The Obama admin has been pressuring the banks to delay foreclosures all year and they have definitly gotten their way. The banks have played games with their balance sheets all year in order to show paper profits. The obama admin has been able to keep the foreclosures out of the news.

There was a tidal wave? Maybe I live too far inland! lol

I don't need a tidal wave...I'll take a ripple at this point. I may start drinking ripple if I dont get some listings. My buyers are driving me crazy!

During the past few months, we've been averaging 20 to 25 offers on REO's as they've been released to market. Some offers have been coming in $30k to $50k over market value....I can't see appraisals hitting that mark. If the banks would incease their release by 4 times their current marketing plan, they'd still should receive 4 to 5 offers per listing...values would continue to increase and inventory would be moving....maybe the 4th quarter will be better.......we can all hope.....

Absolutly not my intention. Do not wish to make anyone nervous. I would suspect the ones being weeded out did not have the where with all to even find this Forum. That is why they are being weeded out.

For those of you that are busy & loved by these AM's what would you say a performing agent does that an unperforming agent doesn't?

After speaking to different people at various banks, I have learned that the Bank's strategy is to release slowly because it's in their best interest to retain more dollars instead of flooding the market which will cause a slowdown on home sales. In saying that, I also read a report that loan mods are now going by the wayside because the big banks have already paid back the TARP money and is no longer obligated to loan mod anybody, I am thinking the next hot niche market will be....take a deep breath.....SHORT SALES! I hate them, but we gotta do em because banks are more interested in doing them then foreclosing or loan modding.

I don't think the next wave will be short sales. For many homes going into foreclosure here, there are two loans on the property because the buyers did a 100% mortgage. The second lien very rarely cooperates with the first lien here and just forces the first lender to foreclose on the property. It's a lot of work to see two banks just throw it down the tubes. Just my two cents.

Okay.... My RE crystal ball says the following:

East Coast, Heavy hit in REO's - Short sales have been exhausted and there is no value left.

Midwest - (Not counting OH or MI because the values there can't get any lower) Banks will be trying for loan mods or short sales still for first quarter in '10 - These are not heavy value states for most banks so they won't lose much on the mod or short sale.

Out west, Banks are learning that limited inventory is their best option in these cases, they'll let them go to REO and then just trickle them out. Probably won't see a flood until first quarter however and then it will hit hard (Except Cali because of the moritorium - I expect 4th quarter 09 to be hit hard in Cali to try to get as much off the books as possible)

Should we see if my crystal ball is right?

J~

I'll give you a quick example from today.

An AM from by biggest client calls and has some questions about a BPO for one of my assignments. It turns out they had 3 BPOs done. Mine and another guy's came in about the same ($120 or so), but the 3rd guy's value was quite a bit higher ($160s). So before he decided what to list the property at, he wanted to touch base with me to get a little better idea of the condition of the house. So we talk for a while, I answer all his questions about the repairs and stuff, but instead of just leaving it at that and ending the call, I asked him to give me the comps the other guy used for his report. By this time I'm late on the BPO I was working on (sorry EML), but it's always been my belief that you go above and beyond for AMs any chance you get. So I spend about a half hour going over these comps (which are all way superior) with him, and he has me PDF them and send them over to him.

Cool, he seemed pleased, I had a chance to spend some time chatting with an AM I haven't worked before I only fell a little behind, no biggie.

An hour later I get a new assignment. From him. Could be coincidence, but I'm sure it didn't hurt that I had just taken an hour out of my day to help him get his value figured out.

I'm not saying to be a suck up, but go out of your way to take care of your AMs. Get code violations taken care of before they have to tell you to, stuff like that. Anything that makes their life easier is going to make you look better in their eyes.

And tell them when they are thinking of listing a property too LOW (that is, if they ask)--rather than just taking the low list price and looking for a fast sale.

I had a quad a few months back for which the AM called me about my value, $25k lower than the other two opinions. Turns out that the 2nd opinion BPO agent and the appraiser were in the house at the same time. On the day the property listed (closer to my value than to the other two), the 2nd opinion agent presented an offer that was close to his value. Of course, I would not have known his value if the AM had not told me.

Fortunately, I also got two full price offers that same day. Man, it feels good to be right once in a while; and I'm so glad that I stood my ground when the AM called to question my value! Taking that lower list price would have been less of a risk for me (and it did cross my mind for half a second), but it would not have served the best interests of my client.

Call me naive or just plain stupid but I'm having a hard time grasping the idea that banks are withholding REOs from the market.
Mutual agreement to postpone a forelcosure is a much different story which is a common ocurrrance in even in past foreclosure waves.

That's not the bank sitting on inventory.

The last thing a bank wants to do is hold property any longer than possible after its reverted back to them. It becomes a hot potato at that point.

Shadow inventory huh? I don't buy it. Its all media spin.

At last count, my county has over 500 homes that have been foreclosed, and not yet on market........my neighboring county has over 600 foreclosures completed, and not on market. That, my friend, is "shadow inventory". I only speak for my area..your's may be totally different.

I think alot of these may be potentially reserved for a bulk sale to consortiums in the 4th quarter to wipe a ton of non-performing loans off the books in a few big transactions before end of year. That would [censored] me off.

M&I just did a bulk sale of 800 assets here in AZ to one investment firm

You may be right. There are a lot of outfits these days angling for such hauls.

Short sales are netting them more than REO. Even with a second mortgage we do them all the time. Second Mortgage holder knows if it forecloses they get zero. In a short sale they will typically take $1k to $3k and agree to the sale.

We have had some where they were foreclosed months ago and the owner is still living there because they never evicted. I think it is a stratagy they are assessing but, I do not think they are going to come out ahead and will start REOs up again.

But, I could be wrong.

Far more fee income goes to servicer for foreclosure than modification. I read 25% of foreclosure sale price is ate up in fees. Loan mods and short sales are money losers for servicers. Short sales are in the investors interest. Foreclosure is one of the few profitable activities for this industry now. Servicers are revenue maximizing entities and will modify as few as possible. I dont fully understand the fee structure for short sales. What fees can the servicer charge for a short sale as opposed to a foreclosure?

Seriously? What will happen to those assets?

Those assets will keep on falling apart and losing more value.

Bourbon I actually disagree with your statement. While servicers might make less fees etc. it is not in their best interest to do so.

On certain loans servicers and investors are given credits to do loan modifications.

Insurance companies WILL NOT pay out loss claims unless a servicer can show they followed protocol and made every attempt to work out another solution that ended in less of a loss loan mod,short sale,etc. If an investor finds out a servicer is not performing to the terms of a servicing agreement they will sue their pants off.

Mortgage servicing news is a great publication to learn that side of the business.

I think this graphic represents what is going on in CA quite well:
http://mortgage.freedomblogging.com/2009/08/06/foreclosure-wave-gets-bigger/15037/

Defaults rising, people going into the foreclosure process rising.. but the REOs taken by the bank isn't keeping up at nearly the same levels. That is the political pressure on servicers not to foreclose.

For CA, I'm a big non-believer in the shadow inventory argument, that is there is a large number of REOs sitting on the sidelines being held off by the banks. There is clearly a huge number of homes in default but not foreclosed, that is the real shadow inventory. I did some extensive research in my local area and found very little that was foreclosed on but not put on the market if you give the servicers any sort of reasonable pre-list period for eviction, trash-out and pricing (3-4 months max). There will always be a number of homes in the process, it would be if those home got foreclosed on and sat that there would be an issue. Foreclosures are political kryptonite for the servicers.

For CA, July was a step back as far as trustee sales that was due to the treasury bringing in all the servicers to yell at them on July 25th, they all ratcheted down their trustee sales during that period. That slowed sales in the beginning of August but the second half is starting to heat up again and August may be the best month of the year for trustee sales. September could be even better. The good part about that is we would be closer to the end of this issue once we actually face it and deal with it instead of the denial going on right now.

The next worry comes at the end of November... anyone want to bet against a holiday moratorium? I don't.

I would have to agree with REchaser, first on the holiday moratorium, as for a shadow inventory I too have my doubts. I received 7 new property assignments in the past 30 days, all were within 2 weeks of the trustee sale date with 4 of them being within 3 days of the sale.

We got one recently that was actually foreclosed in January and when speaking with the owner for CFK was told that he had not made a payment in 2 1/2 years.

We are seeing others that foreclosed in Feb and have been being cared for by the preservation company since then but are just now getting the assignment to do the initial BPO.

We are also getting some within a few days of trustee sale.

No consistency at all. Makes for some interesting specuation though.

Trustee sales are public record. People in the shadow inventory camp should be able to prove their case very easily but can't.

If you give the servicers a reasonable pre-list period the number of homes foreclosed but not on the MLS in So. Cal. becomes trivial. The real shadow inventory is all the homes with NTS filed and not being foreclosed on.

I think most of the "shadow inventory" is all the short sales and loan modifications that are taking place. Unfortunately I do not think we will see an avalanche of REO's again during this cycle.

If you were a bank what would you do? I would sell the asset as a short sale and have the current occupant maintain the property until it is sold.

I know this is only antecdotal evidence but I have a few friends that have received an NOD, moved out, given up, and then received an offer from the bank to keep the home after moving out. This is after 8-10 months of no payments and the property sitting vacant for 4-6 months. In my area I could sell that home in 2-3 days with multiple offers well over the asking price. WHY?????????? would they give the home back and allow them to rent it????? The four people I know in this situation are renting larger homes for less money and now collecting rent from their previously / currently owned home at a profit.

I could go into the fact that I have made all my payments, purchased a home I could afford, make significantly more money than anybody in my example and cannot get that deal.

Why should someone who failed be rewarded at the expense of my tax dollars??????? Not only am I paying for me and my family but those who purchased more than they could afford and are now being rewarded for it with our taxes.

Must I go on? Cash for clunkers, bank bailouts, union bailouts, now I'm hearing there will be a bailout for outdated appliances.

I must be a sucker, I have all newer vehicles, appliances, home etc. and paid for it myself. I will never qualify for any Gov. handout and wouldn't accept it anyway. What a sorry SOB I am.

I have submitted this once before but I think we all need to read it again!!!! See below.


GREATEST NATIONS


"A democracy is always temporary in nature; it simply cannot exist as a
permanent form of government. A democracy will continue to exist up until
the time that voters discover they can vote themselves generous gifts from
the public treasury. From that moment on, the majority always votes for
the candidates who promise the most benefits from the public treasury,
with the result that every democracy will finally collapse due to loose
fiscal policy, which is always followed by a dictatorship."
"The average age of the worlds greatest civilizations from the beginning
of history, has been about 200 years. During those 200 years, these
nations always progressed through the following sequence:
>
1. From bondage to spiritual faith;
2. From spiritual faith to great courage;
3. From courage to liberty;
4. From liberty to abundance;
5. From abundance to complacency;
6. From complacency to apathy;
7. From apathy to dependence;
8. From dependence back into bondage "

Where do you think we are now?

I think we are at step #6, very near step #7. Pray for your children and grandchildren if we progress down this road any further!!!

Not to mention personal bankruptcy at an all-time high, which will postpone a trustee sale, logistics, Prices still way too high in many areas and banks too broke to lend. There is a clog in the system which needs to be flushed out. The only way to deal with this problem is to blow out properties with super low prices. Instead the government is on this kick to brainwash everyone into thinking the economy is recovering.Into propping up home values to save homeowners values.

Well I got news for everyone. You can't liquidate REO inventory and protect existing homeowner value at the same time. Something has to give.

I may not be abe to define what is "shadown inventory" and what isn't. But I believe that most REO Brokers/Agents who was closing deals and had significant inventory last summer 2008 are not doing the same volume and have the same inventory Summer 2009. NODs and foreclosures have rise so where is the inventory?

I don't know but you can't tell me "it is business as usual".

Gman,

*Please note this is a personal opinion*

I am sorry but your post rather bothers me. Everything thats happend we have done to ourselves. No offense guys but really, we all helped these homeowners get into arms and rates and 40 year adjustables with interest only loans. We helped them buy houses they couldn't afford. No one raised an eyebrow when the SEC dropped the requirements to a low standard of how to bundle sub-prime pyramids. And how many of us helped vote for the last 8 years administration that has put us into such a large debt that we almost not only sunk our country but most of the rest of the world with it as well.

We are the ones that did it. Whether we were working our butts off to make money or not working and collecting a goverment check... The problem isn't in the people, it's in the fact that we have lost a community spirit. No one looks out for one another any more. We've gone from a country that bands together to one of complete self interest. What would our grandfathers have to say about the legacy they died for that we have almost destroyed.

Face it. We did it to ourselves. So lets take the actions we need to, fix the problems we have to and learn not to make the mistakes we made again.

J~

If you felt that you did something wrong or unethical to the Clientele you had/have, then you should hand over your license and quit the business. I know I never put a gun to anyone's head when I sold them a home or an investment. I never pushed for anyone to get a subprime loan, I never encouraged anyone to overbid on homes that they had no right purchasing. My business is to facilitate sales and hold a fiduciary responsibility to my clientele and when I say fiduciary, I apply it to the particular deal and it's legal ramifications for my Client. By the way, I have only had 4 properties that have gone into foreclosure that I have sold.

I believe my grandfather would say, in modern vernacular, man up and take responsibility for your own actions. If you believe we are all at fault then no one has to take the responsibility for their own actions and we can continue to make the same mistakes. I am not and do not feel responsible for anyone other than myself and my family. If you (the home buying public) bought more than you could afford or agreed to a bad loan then it is your fault, not mine.

Real Estate in California was like a big Casino. Everyone was a real estate expert and guru because they bought houses that went up in value that allowed them to do their next RE deal, remodel the house, put their kids in college. I don't own their actions and always tried to walk people through best and worst scenarios after I knew what their RE plan was ( if they really had one ). Most of the properties I sold were in the high end with sophisticated buyers and sellers that were intelligent and knowledgable about what they were doing and why, not first time home buyers and I'm thankful for that now. As far as first time home buyers and should they buy or not, they are adults and after you walk through the process with them at the end of the day they choose and if it goes up hundreds of thousands of dollars, that's their money and their win, so if the real estate market goes down, if realtors can't take the credit for a market that goes up how can they be accountable for a market that goes down..?

Desert,

My grandfather fought in WWII - He stood for everyone, not just himself. Just like all the other soliders we have. They go to defend us all. That is the american spirt. Not self interest. What honor do we give them to have them come back from putting their lives on the line and us bickering about the fact that we have to help our country not fail financially. I believe whole heartedly in responsibility for ones own action. But I also believe in my responsibility to do what I can for my neighbors, community and country. It's why I pay social security I'll never see, Taxes I barely can afford and contribute to charity whenever I can. And if that means that I have to put up with goverment bailouts so that the country can survive. I'll do it.

J~

I agree with G-Man.

In fact, I think we have one foot in the door on #7 and if we don't stop this craziness and fight our way out now #8 will sadly be a forgone conclusion. Let's get to work people.

God bless your grandfather. If he's still with us please thank him for his service.

You need to understand government bailouts are what's destroying our country.

Let the free market do it's job and you'll see better times ahead.

Since when has the government ever been able to run a program of any type efficiently and profitably? Please name one, just one.

The Eisenhower Express way.


Thank the goverment for the interstate system.

MSVJ,

As a veteran, Viet Nam, I served this country because I believed then as I do now that it was my duty and pleasure. I am not complaining about bailing out this country when it is needed, I am just not willing to take responsibility for others poor choices.

MSVJ
My father left his right leg in Italy in 1942. I agree that there comes a time when we have to quit bickering and step up. We can save the world from bad things and now we can save ourselves from ourselves. Greed created the situation but compassion will fix it.

Some will pay with higher taxes but others paid with limbs and lives. I would rather write a check than pay the price our fathers and grandfathers paid.

Yes, I believe it will get worse in RE before it gets better. But, just like in the early 30's there are things that can be done to correct it. Yes, I believe that there is going to be more pain in prices before it gets better but I do believe that we will survive it all and regain our status in the world.

I respectfully disagree MSVJ. Our country was founded and many presidents in the past (both parties) espoused "rugged individualism" which encompasses personal responsibility in buying a home and getting a mortgage vs. state socialism and other forms of co-ops. The part about war is irrelevent in this conversation as that is one of governments main jobs - to protect its citizens from outside attacks in order to have freedom to be "rugged individualists".

I have a *real* problem with this statement. The problems we are facing now were not created by the previous administration. Many, if not all, of them came out of the Congress and Senate--specifically, the Senate Banking Committee. I didn't vote for *any* of those people. And, with all of the problems/mistakes we can lay at the feet of Bush, this is not one of them. There were many, many more people than the previous administration who had more significant hands in this debacle. It goes back 30 years.

Also, if you are so against debt, then you should be against everything the current administration is doing in the belief that they will get us out of this mess. After all, they've piled up way more debt in a few months than any other administration ever has during their whole terms. To me, it seems that you have two conflicting viewpoints that can't co-exist.

Do you know your area? I know my area. Where I can trace properties that were marketed, after foreclosure, failed at market and are still vacant, that's shadow inventory!

I think that why most on here don't see the inventory (and trust me it does exist), is you are in a larger geographic area than I am. I can swing a cat and hit any number of VACANT properties that have been foreclosed on which are not being marketed. That's shadow inventory. It's being held off market for a reason. I don't know the reason. I do know that some REO property is being used as rental but a very small and probably statistically insignificant percentage. I've been asking about this for over a year.

It could be that all those vacant homes are being marketed somewhere (for example Ocwen's properties come to mind) just not in the market where the properties are. That does not appear to be a successful strategy to me. I posted yesterday about being asked to host an open house for Ocwen this week-end. The property isn't listed on my MLS or the neighboring MLS, so how does someone know about the property? An open house won't replace a listing on MLS now will it? To make matters worse, it is marketed on Ocwen's website but has no picture of the property. Does that sound like it would work?

Perhaps there is some underground listing clearinghouse that I am unaware of; but I doubt it.

Dont blame me... I voted for Romney! LOL

Oh, It's interesting that I say 'Adminstration' and people automatically think I just mean the past president. I actually meant everyone we voted into office past and present that attributed to our debt problems. And if you do the math I said for the last 8 years.... It's 2009. We've had mayors, senators, goveners, judges ect that we have all voted for that helped put us where we are. No one person can be laid at fault. Not the way democracy works. And you might not have voted for any of 'those people' but someone voted for the people that helped place them where they were.

As far as the current situation. It will get worse before it gets better. I know that which is why when people were up in arms about giving the bailouts I shrugged my shoulders and wrote my check for taxes. Like I said, we did it to ourselves. Yes, ourselves.. Not myself or you or him. We are one nation. We stand or fall as one. Time to stop distributing blame and start picking up pieces and doing our part.

So get out there, sell those REO's - Help your clients with more enthusiasim and honesty as to the reality of financing a house. Stick to the spirit of the ethical codes and not just the letter. No one held a gun to anyones head to buy a house. But how many people took a stand on brutal honest truth and said, even though this is my commision, I don't want to see my client face forclosure in a year because their arm goes up.

*shrug* Just my opinion of course. Each is entitled to their own.

Bring on the REOS!

J~

What's the number to the PETA office?

You know, my cats were with me as I typed that. I am now sharing the dog house with Ty (the cute but mentally challenged Pug). LOL.

To put age in perspective, my 50th high school reunion is in two years.

When I was a young man, I purchased my first home for less than $20K with a PITI that was about one week's pay per month. When we needed something new, we saved until we could pay for it. We lived in that house for a year without a stove, cooking on a hotplate and in a toaster oven, because we couldn't afford to buy a range. No VISA, MasterCard, Discover or whatever.

Now, young people want it all now. The big screen TV, the massive surround sound system, the new V-8 SUV, etc., etc. etc.

And there were plenty of people willing to help them get those wonderful things, like mortgage lenders, credit card companies, auto lenders. Remember walking through the mall 5 years ago when every store offered "Instant Credit".

Plenty of people proved they couldn't handle the responsibility to pay back their obligations.

JUST TO THROW IN A WW II NOTE HERE - My father was drafted in 1943 at age 32. He had been a high school teacher and coach for 8 years before that, yet he willingly served and stayed in the reserves after the war, serving 18 months during the Korean War at age 40.

We should be honoring those that serve in the armed forces every day.

Well, I'm beginning to think there is. I do a lot of orders for a particular lender...and a few orders for a second company. Most of the orders for company #2 are the same properties as I have done for company #1. They are all foreclosures. Company #2 evidently has the right to purchase for their investors the distressed assets of Company #1, without these properties ever being listed in the MLS. I enquired of the rep at Company #2 a few days ago about a particular property a customer of mine would like to buy...and asked if it were still available. The answer: Company #2 passed on this asset, as it needs a lot of repairs...and it has been sold to an unnamed Company #3.

Somebody said it earlier, loan mods and short sales are dominating the market. What will be the "reo" of the future is pre-approved short sales assigned by an asset manager. I have one now. It's great..homeowner is there to pay the utilities, no referral fee, agreement with the homeowner, AM set's listing price after I submit my bpo.

When I did my analysis for my county I determined there was less than 3/4 of a month worth of sales that I considered shadow inventory. It isn't enough to matter or sink the market. I have access to all the relevant MLS (I even catch the out of area OCWEN stuff) for my area, list of trustee sales going back to 2007 and enough SQL skill to match the two (MLS data vs trustee sale data). If you give any sort of reasonable pre-list phase for the servicers the amount of shadow inventory isn't anywhere near enough to sink the CA market.

What county are you in? I've had this argument a few times now and I asked people to give me a zip code loaded with shadow inventory and I would prove to them there wasn't nearly the amount they thought. If I have coverage in your area I'll do it again. I WANT there to be shadow inventory, the market in CA is now under 4 months of inventory according to CAR. The market needs the inventory. But the only inventory I see is the large amount of homes in pre-foreclosure with trustee sale after trustee sale being postponed, a small amount of foreclosed inventory in pre-list, some more on the MLS and a very small amount in limbo. Everyone thinks the limbo portion is huge and I keep asking people to prove it and nobody can.

Foreclosures are matter of public record, If there was a large amount of "shadow" inventory that was foreclosed on but not marketed you could prove your case.

Here was a simple graph I made using Dataquick press releases to prove my point on a State level:


I've done some more county and zip level work as well but that becomes much more data intensive and I have to massage the data to a point where I can match it up using a SQL server. The biggest issue involved is that multiple MLS have differing data formats and not all of them export very well.

That is very interesting, is this the 1st short sale that was assigned to you?

If I understand your analysis, you would not only need a zip, you would need access to the NOD and then be able to massage that through the MLS and then catch once again by lack of sale info from MLS, our tax records are not "online" per se and they certainly are not up to date.

PM if you want a zip. The houses were vacant and remain vacant.

State numbers mean absolutely nothing, it's what's going on in YOUR market that means something to your buyers and your sellers.

As to your comment regarding Ocwen, who cares???? If a property is in your area and its not listed on YOUR MLS what good does it do you or a buyer????? If it's not listed on a neighboring MLS, again, what good is it??? The object of the game is move the inventory, not play Where's the Pea (under the shell).

Nova Home Savers: I think what you are talking about may be the new wave: Short sales assigned by the banks and asset management companies.

There are a couple of asset management companies who specifically are marketing to reo agents/brokers who have done reos because they want them to do short sales fpr them. I signed up with them but have not been assigned anything yet. But the fact that you have been assigned one is encouraging. The beauty is the list price is going to be approved when you get the list price.

Not NOD or NTS, but homes that actually foreclosed, trustee deeds. There are trustee sale posting companies which handle that data, that is the easy part and it is real time (you can see what is foreclosed the day it is foreclosed without waiting for the trustee deed to be recorded)



I don't care if they are Vacant, I see plenty of houses that aren't foreclosed on but are vacant. It is if the houses are foreclosed on and not marketed in a reasonable period of time for pre-list (assignment, eviction/CFK, trash-out, pricing,etc) that they become "shadow inventory". I.e. foreclosed homes which aren't being marketed by the bank.

If you classify shadow inventory as homes that have been foreclosed on but not marketed (assuming a reasonable pre-list period), the numbers are small. If you classify shadow inventory as homes that are in default but not foreclosed on.. the numbers are massive.



State numbers show a clear unmistakable trend that ever since Q3-2008 more REO homes have been sold per quarter than have been foreclosed on. If there are pockets where that isn't true then it means there are other pockets where it is even more true.



Well the OCWEN stuff is being found just fine, consumers locally use sites that aggregate MLS data. My point about OCWEN type inventory is I have enough access to multiple MLS to ferret them out of the data. That those type of homes aren't being held off in shadow inventory and are a part of the system even if it isn't one you or I would like. Those homes can be purchased today with ease.

[quote=NoVA Home Savers]Somebody said it earlier, loan mods and short sales are dominating the market. What will be the "reo" of the future is pre-approved short sales assigned by an asset manager. I have one now. It's great..homeowner is there to pay the utilities, no referral fee, agreement with the homeowner, AM set's listing price after I submit my bpo. [/quote]

Is this one with FP Home Telos or somebody else? We have been contemplating for a while to sign up with AM companies offering short sale opportunities. That's a good sign that it is starting...

If we want to start comparing the possibility of shadow inventory *ahem* I'd be talking to the mills and asking how many of their current assest % wise are REO/Bank owned BPO's. I can tell you right now that MSV's is about 60% - And its not the same inventory every month. Different properties each order bulk. Now these clients are placing these orders every 5 months on these properties and so from observations since they are not currently listed but we know the bank owns them... and 5 months has gone by since the last value given and still no listing assigned... What does that spell out to you guys.

J~

Thank you!!!! Someone who gets it!!!!

I do not understand why the concept is so difficult to understand. Properties which have gone through the process, have been "secured", standing vacant, which may or may not have previously been marketed, not being marketed now.

I have short arms, but I will pat myself on the back for saying that Short Sales are the wave of our future.

Hey, I get it. I've been trying to PROVE it. Nobody has shown me one iota of proof yet.

I have access to daily trustee sale data and MLS records. I have a comp sci degree and take the data from the disparate systems and import them into a SQL server and match them using SQL queries.. I can't find the shadow inventory of foreclosed homes.

So show me, doesn't matter what county you are in CA, show me the data. Foreclosures are PUBLIC RECORD, they can't be hidden yet nobody can prove to me they exist in the large numbers they claim are out there. There are a TON of homes in pre-foreclosure not being foreclosed on, but the numbers foreclosed on but not on market (outside a reasonable pre-list period) are small.

See my reply to MSVJ.

A house which has gone through the process, NOD through to TS&D and then listed, not sold, now standing vacant. That's shadow inventory - yes? Properties that have gone through TS&D, secured and standing vacant - shadow inventory - yes? Those numbers are huge.

That may not be true in your market but it is true in my market. Of course, my market has a 16% unemployment rate which may have a little something to do with it.

The CAR numbers are confusing at best. Sales are up but those are REO sales, not traditional resale, Median prices are down, not up, not even holding their own.

So, when the bargains aren't there, the sales will come to a halt and there goes the recovery that I heard about on the radio today as I driving around taking photos for BPOs.

If you think the worst is behind us, I think you are sadly mistaken. Home buyers are funny people, if the numbers don't make sense, they don't buy. If they're afraid for their job, they don't buy. Investors don't buy if the numbers don't work either.

As to Ocwen, I'm happy that you belong to a number of MLSs. Pray tell, how does that help a property in my county if you're down south? Are you going to show the property, will you make my county's disclosures or will you do what Ocwen attempted to do? Call a local agent to show the house???? That would be lovely if the house were on lockbox (even if it isn't on MLS). Just for laughs I took a drive-by to look at the manufactured house that they wanted me to sit this week-end. Interestingly enough, NO lock box and NO sign. If you're going to tell me that you're going to sell a manufactured house in my area, sight unseen and expect the local agents to pick up the slack, again, you would be mistaken.

It was only a campaign slogan for the current president.....how could I have ever misinterpreted that one??....


That's fine--you can refer to all of those other people, but they really didn't have a hand in this mess. My point was that you can look at the Senate Banking Committee and point a HUGE finger at them. As senators, only their state can vote for them. So, the statement that I, or anybody else here, put them into office is completely incorrect. By definition, the vast majority of Americans had no say whatsoever in their being elected...

Also, the groundwork for this problem was not laid 8 years ago. It was laid decades ago as government got more involved with insuring homes and providing lending guidelines. Please show me where it is government's responsibility to handle that! As down payment percentages decrease, foreclosures and bad loans increase. Simple as that.


I'll definitely agree that it will get worse before it gets better. However, the solution is not to keep bailing people out. Let them fail. Failure is the best teacher in the world. Without failure, people will never progress and learn from their mistakes. What do you have then? Generation after generation of inept, ignorant people depending upon the government to feed them.

If you want to display compassion, let people pick up their own mess and force them to grow up. Until you do that, you are only enabling them to continue to make stupid and reckless decisions. Compassion and empathy does not mean you give people what they want, but what they need in order to be self-sufficient, grow, and learn.


Just because somebody bought a property with an ARM doesn't mean they weren't warned about the situation. Honestly, most of the people I'm seeing getting foreclosed on are not being foreclosed on because they specifically used an ARM. They're being foreclosed on because a loan officer told them they were approved for a $300,000 home so that's what they bought--no money down, seller paid the closing costs, etc. Then, they charged everything to fill up their new little home with gadgets, electronics, furniture, etc. Everything was great as they lived month-to-month until there was a slight hiccup in income, bills increased, etc. It didn't take much to put a lot of these homeowners into foreclosure. What's to blame? The ARM loan or poor planning?

You say you want people to look at themselves. Fine, have them look at themselves. If they do, they will see that they didn't fail because of an ARM (many others have them and are doing fine). They failed because of poor planning, greed, and a "give-it-to-me-now" attitude.

So now, of course, let's blame the greedy realtor who just wanted a commission. I'm sorry, but I'm hired to give advice, negotiate, and broker transactions. I'm not hired to be somebody's conscious. If they want to look at the risks and still proceed with the transaction, that's their decision. Stop blaming the realtor, the bank, the ARM, or anybody else. For God's sake, every buyer of an ARM had to sign a document acknowledging it was an ARM and it displayed a schedule of what their payments could go up to. To say people didn't know what they were getting into is naive. To blame it on the realtor is even worse.

My 2 cents.

NTB

No, Shadow Inventory is not listed (that is why it is "Shadow"). It is properties that have been foreclosed on but not on the MLS. Forgiving some that are in the pre-list phase after all there will always be a "float" of homes in pre-list.

The theory behind shadow inventory is that there is ton of foreclosed inventory the banks are about to give to agents and make us all rich. But there isn't.

If you redefine shadow inventory as all the homes in default and pre-foreclosure then the numbers are huge.. but until those get listed in some fashion they don't matter much.



I think sales are horrible and are capped out because of the lack of inventory on market here in So. Cal. We are still in historically low sales territory except for the outer areas that have enough inventory to match demand (though in So Cal all I hear about is the low inventory everywhere but the high end).



When did I ever suggest the worst is behind us? I never said such a thing. All I stated was that there is no large inventory of foreclosed homes ready to be unleashed on the market. There are recently foreclosed homes that will be coming on market but a large inventory of REOs that the banks are holding back on does not exist. And if it did exist it could be proven it exist but nobody has been able to do so, wouldn't that suggest it doesn't exist? We aren't trying to prove a negative, we are trying prove a positive.

Some good discussion here.

I happen to feel similarly to NTB. Let business run its course and the greasy politicians need to stop pandering to those who want something for nothing. As long as you throw a dime into the open palm of a begger, his hand will continue to be open. Many of the mortgagors (the overwhelming majority actually) have openly confessed that the haven't made a payment in 8-12 months and it's not because they couldnt... it's because they didnt want to. They feel they shouldn't have to because their house depreciated in value. How do you fix that??? certainly not by allowing them to stay and forcing the certificate holder to write down their principle... because thats what these filthy greasy politicians (Frank, Dodd, Waters, etc.) want to have happen

First, the banks flooded the market with inventory and drove prices down 50% to 70% (in my area). Now, they've taken it into a new direction.....will only release a few at a time with the hopes of driving prices back up........we are averaging 20 to 25 offers per REO. I find it ironic that all banks have adopted this policy.........I just love it when I drive by a "shadow", with grass and weeds two feet tall......might just as well as put out a sign and say "COME AND GET IT"........If they think they had problems in the past with theft, just give it a few more months.......common sense doesn't seem to work for these folks.

While out doing my exteriors, I keep an eye out for "shadows".....not hard to spot. I write the address down and check the records when I return to the office........over 90% are shadows.......bank has owned an average of 5 months.....some as long as a year......maybe they're working on bulk sales.

end of rant............

Unfortunately this is my suspicion as well

If they're working on bulk sales, they're handling it privately. The last FNMA bulk sale I was notified of was back last Nov/Dec. I haven't seen a GMAC one in a while, either. To my knowledge, BOA and their minions (Countrywide, Wilshire, etc) are not doing bulk sales--they just aren't completing their foreclosures on people. They've had an approximate 70% drop in foreclosures due to the attempts to work out short sales/loan mods (overwhelming majority of them are failing). As for Chase and Citi, I'm not sure about them. Once you get past those big banks/networks, there's really not many other national banks to be worried about.

IMHO the problem will get fixed when everyone works together to fix the problems instead of trying to fix blame.

I do not profess to knowing what the answers are but every moment spent trying to figure out who is responsible for it happening is a moment that could have been used in thoughtful consideration of how best to correct it. Then we can all move on.

It will be interesting to see how this will be taught in business schools in 20 years.

This is strange, and maybe some of you know this already, but I heard thru the grapevine that GMAC RESCAP has hired an asset company to actually have them manage their REO's as RENTALS? Sounds wierd, but that rumor is out there. I could be crazy in posting that, but that's what a reliable source has told me.

Northtx, you are right, the majors are no longer interested in bulk REO sales, they are losing less by loan mod, short sale, and even foreclosure. The bulk REO stuff out there now is mostly junk or wholesale bulk from a Seller who bought directly bulk from the bank, bulk Buyers are only expecting 70-80 cents to the dollar.

Okay so my wonderful CA people will understand this I think.

Banks are currently looking at what is happening in the riverside area due to the moritorium. Since april/may - Values actually have been rising. People (mostly investors) are overbidding listing price due to the lack of inventory available. This is opening clients eyes to the possibilities of keeping the reins on their inventory. I don't see them bulking up huge deals. I see them going to great efforts to trickle out the properties as slow as possible. They'll be looking for a snowball effect. If they start slow, by the time they start releasing more the value will be going up and they won't lose as much on the property.

My 2cents.

I agree about short sales being the wave coming in. It makes sense for the lender eliminating holding and property preservation costs. In California, so many people are upside down in their homes a move for them = foreclosure or short sale.

The flip side- the sellers have to "care" about their obligation to the bank and credit to want to go through the short sale process ( and understand it as well ), this often isn't the case.

MSVJ, I sold two properties in Riverside County in the past 2 months representing an investor. Though we didn't go over the asking price but we did come close to asking. You are right, I think banks are getting smart by not releasing too many at one time. What's interesting is we bought properties whereas the original buyers couldn't qualify for the loan, and I think we will see more of an increase on that situation. But as I look today, only 10 properties for consideration for investors in Temecula, whereas i remember it use to be 40-50 last fall.

If you read the Tenant Access thread it will be more clear as to what is going on. It appears that this is what several companies are planning on doing.

You jump to conclusions. Who maintains the property when its in eviction? Not the bank because they don't have possession yet.

My last REO was in eviction for 1.5 years after foreclosure.

To say that the banks are foreclosing, gaining access and not putting them to market to control flow is hogwash. That would be saying there is a conspiracy between all finacial institutions.

For my pals in CA - the Shadow inventory will be released by the GSE on or shortly after Sept 15th.

There is a shadow inventory USA WIDE. An AM i am working with got 80 for Georgia last week in one county.

The Banks ARE manipulating this market.

So are they going to be time-released? Or will they all hit the market at once?

MSVJ ~

What does your crystal ball say for MI?? Would love to hear that forecast!!! Besides economy getting worse, and then worse, and then worse.. etc. LOL

Crystal ball says 'Buy 30 houses for a dollar each, demolish homes, build parking lot, charge a monthly fee. Leave one house standing, declare it your primary residence so your kids can get the free scholarship to collage. Then they live in it while going so no worries about paying for the dorm. And then as a side job you have them take the fees for the parking lot which pays for their books, food and clothing'

God I love this crystal ball.

J~

P.S. Does MI still have free college tutitions if you are resident? I might listen to the crystal ball if this is the case.

LOL The crystal ball IS magic. What a great idea. I havent heard of free tuition tho. My children are still in high school so I might not have heard about it yet. Sorry to hear the BPO wave isnt going to be in Mich tho. Was kinda needing the work for the cold winters we have LOL. It seems the properties here are all going to auction and BPO's just arent needed anymore.

Yeah.. I'm sorry to say I think MI still has a longer recoup time then the rest of the country. They can do what UT does. We have construction year round (even on roads that don't need it) keeps employment rates up.

J~

We have ALOT of construction here... it does not seem to help the economy. lol.

Ah....But if you look at UT from a satalite picture - IT is a giant orange blob.

J~

I got an REO assignment on Friday and another one from a different company today. This is the first time this year I've gotten 2 assignments in two days.

Here in CA I've noticed that the trustee sales are finally ending up as "Back to Beneficiary" after a full year of "Postponed". I think the logjam is breaking up in my neck of the woods. Thank God, I was going to have to lay some people off soon.

We have one AM who is so busy we got an assignment on Saturday. First time that has ever happened for us.

Bratchny ~ The REO world has its own delicate balance and way of healing. Kind of like the earth. Good to hear the natural flow of things is back to normal again there.

I got my first REO assgnment for 2009, today. I havn't received an assignment since 11/21/2008. This was long overdue. I've also gotten 9 BPO's today and have been averaging 30 per week for the last 3 months. It looks like things are picking back up!

I keep hearing about a shadow inventory as well. I also hear about the 9/15 date to release a bunch of them.

The only way I could see a shadow inventory being out there is if the bank postponed the final sale. Just keep the homes in limbo with the owners still in them until they see what our government will toss them to "help out". They could control the REO flow by continuing to postpone taking the homes back until they are ready to list them quickly.

We are up to 5 REO assignments in the past week. One came in within 24 hours of auction. A couple were within 2 weeks of auction and the other 2 have been foreclosed for some time and just sat with lockboxs installed and lawns being mowed until now.

We got one a couple weeks ago that had foreclosed in January and still had the owner in it.

Hope this is the crack in the dam.

I am also seeing fewer postings in the past week or so. Hope that is from everyone being so busy they can not make the time. I come here when my head is fuzzy from REO.

I don't know what happened but I took 15 new orders today.

Congratulations. Perhaps this is a wave that can be surfed.:-)

2 assets yesterday and 4 today... only 1 for all of last week. I think some will be breaking loose mid to late month

It's been hitting like crazy the last month here, I've been getting 3-4 properties a week for the last 4 weeks. About half are Fannie's, the other half are a mix of companies and a few Freddie's. It's been a crazy month and I don't see it slowing down any time soon.

Have you guys had any moratoriums in your state like we do in California?

I've received 5 assignments in the last 30 days, 4 from the same company. For me, that's 3 more than my monthly average. I hope this trend continues.

BPOs have been slow the last week.

I'm flooded with BPOs. I'm at half my August total and we're only 3 days in to September. But then again August was my slowest month in 2 years....

Hammered with BPOs here. Getting hit from all sides. I got 25 requests from one company yesterday. Most out of my area but its good to see the flow is running smoothly again. Its just that I'm not in full BPO mode right now. Too busy managing inventory.

Glad to hear it. Working on 4 new listings. Bring it on!!

yes... the assignment are happen in my neck of the woods...I have recieved 3 so far this month...and for me... thats alot...I like my BPOs and hit submit...but I cannot turn down a listing either...so I am fairly busy...and that a good thing

I thought that after the long weekend, we would be flooded with orders. I've only gotten 2 so far today. What's the word around the forum?

Have a great day everyone.

4

0

3

The Tidal Wave is building. There are over 700,000 REO's from last year that have still not been listed, coupled with some 300,000+ more each month added to the list.

The banks held and extended the moratoriums not to let people stay in their homes as a show of compassion, but rather to give them time to ask the government change the accounting rules so they don't have to write off the losses at this time. Normally the losses would have been reported at the time redemption ended and they would have to report the full loss. But as of April 21, 2009, they use a mark to market system to determine the actual loss which is not report until "the property is assigned to an agent and the BPO's are submitted back to the bank".

So if they don't assign the property and request BPO's, they can indefinitely delay the losses and report profits to Wall Street, the shareholders, and Congress or anybody else who will believe them.

They don't want to have to report the losses so no assignments.

shadow listings = multiple market manipulations (housing, stock, money markets)

By the way, since last November when the moratoriums started, we spoke to several high level people at the banks, and they said it would be a year for the foreclosures to resume normalcy. You can expect that they will start to be released between November and January 2010.

I heard the same today, that because the moratorium was extended through August, we will not be seeing properties until December

Nothing here in Central California.