Chasing Down the Foreclosure Part 3 – REO

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See part 1 for pre-foreclosure

See part 2 for Auctions

REO- (Real Estate Owned-a fancy way to say the bank owns the real estate)

This is actually the easiest and most doable way to buy a house that is foreclosed. 95% of the time if you hear someone said they bought a foreclosure, this is what they meant.  It is a way to get a fairly good deal on a property, but it is still not the steal people envision from the infomercials they have consumed.

There are 2 main types or REO properties. Ones that have been listed with an agent, and ones that have not. I will cover the listed ones first, because it is pretty straight forward. Each bank usually has a local agent that they list their REO properties with. The Realtor gives the bank a price they think will sell the house in 30 days, and put it on the market. This price is generally about 10% under fair market value, and it is listed there to generate that fast sale.  So if you keep your eyes open, this is the best way to get a deal on a foreclosure.

I DO work on this kind of sale. And I highly recommend having an agent who has experience with REO properties to help you. The sale usually if full of headaches. The banks generally don’t want to do any repairs unless they are lender required. And frequently these homes are in bad shape. They have deferred maintenance, and may have sat vacant for years. They may not qualify for FHA or VA loans. So definitely have a good agent help on these purchases

If you would like to be put on a list to receive new listings of REO properties as they come on the market, contact me and I will set up that for you. Or follow this link. Jackson County Foreclosures

The 2nd kind is REO properties that have not yet been listed. My experience is the banks have a set way that they do things, and selling directly without putting them on the open market is not one of them. They will let the property just sit vacant, sometimes for years, until they get around to wanting to get it off the books.

There are many theories of why they are doing this. The so called “shadow inventory”. One popular theory is they are waiting for the value to increase before they put it up for sale. Another is they don’t want to drive the prices of real estate down by flooding the market with too many at one time.

I think there is validity to both of those theories, but my personal theory is just disorganization. There are thousands of these properties across the country. And a paper pusher sitting at a central desk has them all on his plate, along with probably a bunch of other things. And as he weeds his way through the pile, some places just take forever to get to.  And now that the new foreclosure rate has gone down, the banks will probably move these people to other departments.

Is it possible to directly contact the bank, find the asset manager, and make an offer to purchase without the property hitting the open market? Yes, I guess. I just don’t know of anyone who has succeeded at this with the major REO holding companies. Primarily Fannie Mae and Freddy Mac. They are regulated government agencies with policies, procedures and red tape. It is hard enough to work with these asset managers AFTER they have put the house up for sale, let alone before.

 

So there is it. My 3 part series on distressed properties.

That doesn’t cover short sales, or the Oregon program that can help some homeowners keep their home, but lower their principle called Further Development. I can assist with both of those transactions.

 

 

What is a Boomerang Buyer?

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You may be hearing the term Boomerang Buyer when people talk about the housing market. Boomerang buyers are people who lost their home in foreclosure or sold as a short sale, and are now beginning to return to the real estate market. These are going to be good strong buyers. They will have some added knowledge of the working of the real estate world, and are used to being home owners.

The latest bust in the market started around 2007, with probably the worst of it coming 2009. Many people lost their homes at this time, but still have jobs and ties to the community and will be ready to own again. Especially seeing the current prices, they will be interested in recouping equity and building wealth through real estate again.

In our local market, more than 2500 homes were resales from the foreclosure market in 2008-2011. And another 1000 houses were sold on short sales.

The homeowners who lost those homes will be back in the market, and many of them are coming back now.

Here is a chart from my #1 lender Linda Fitzgerald at iMortgage about the current wait time for people who have lost their homes, or had a bankruptcy about when they can get financing again to buy a home.

WaitFromForclosure

 

If you are a boomerang buyer, and want to get back into the market. Let Linda and I get you started on building some equity and wealth in real estate.

Zombie Apocolypse

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It is kind of funny that the popularity of zombies has hit the real estate market.

According to an article in the Chicago Tribune, based off a study by Reuters, the media has started referring to homes that are vacant, but have yet to be foreclosed on as “zombie” homes. They are deteriorating because they are vacant and nobody is looking after the upkeep.

walkingdead_zombiHomes that have already been foreclosed at least have a maintenance crew that looks after basics..shuts the water off and checks on them periodically. Although I would have to say the maintenance is not very good. But at least it is something.

So what do you do if you have a zombie home in your neighborhood? By all means, keep your children and pets away from it. It will feed on their brains. Other than that, there is not a lot one can do in our area. If you knew the people who owned it, there still is a chance that it could be sold by a short sale. You could have them get in contact with me, and we could sell it and get new owners in there to take care of it.

Otherwise, it might just sit there for a long time. In the article, it says that possibly 50% of the houses in foreclosure in the state of Oregon are “zombies”. And with the current regulations, it could be a long time before the foreclosure process is completed, and that house comes on the market as a REO property. So you and the neighbors might just need to band together and take care of the poor zombie house until new owners can breath life into it again.

And again, if you knew the owners…put them in contact with me. Lets see if we can get a short sale done. Then the zombie would come back to life in only 4-6 months. 🙂

 

Short Sales in Southern Oregon

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Short Sales:The brief definition of a “short sale” is when the owner of a house owes more to the bank(s) than the house can be sold for, and therefor a sale requires the bank to release the lien for less than full value.My House is Worth Less Than I own on it. What can I do?The comforting thing to know if you are a homeowner that owes more on your loan then your house is currently worth is that you are not alone. An estimated 22% of homeowners across the country are underwater. If you can make your payment and want to stay in the house you live in, then it really is something that you might just not think about.But what do you do if you can’t make the payment…or if you need to move for some reason (job change, divorce, etc…?)Well, maybe a short sale is right for you.I have been working with people both buying and selling short sales for a number of years now. And what I can tell you is the process is much easier to get through now than it was 3-4 years ago.

If you, or someone you know could benefit from getting out from under an underwater mortgage…let me know and I will see what I can do to help.

EMAIL ME HERE

Your contact with me will be kept strictly confidential. The professional consultation is free.

No matter how fun or depressing you may find your real estate situation at this time, it is my goal to not only provide the best advice possible, but to also make you laugh in the process.
Because a key to happiness is to be able to laugh in the bad times as well as the good times.

www.AgentInAKilt.com is the home for information on the Ashland Real Estate Market.

 

Foreclosures Rising

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This last week there was an interesting article in the Medford Mail Tribune about a Jacksonville man who won a court case on his foreclosure proceeding, and also a weekend  article in the Oregonian about Foreclosure filings in Oregon being up 236%

Together they make an interesting article, but I wished that it was a more NY Times in depth analysis, rather than just the few facts and slight research that was there. They brought up some questions as a combined article…and I haven’t been able to figure out what the behind the scenes real story is.

So what I want to know is did the banks file the foreclosure notices to try to race what they think might be the backlash of negative rulings by  Oregon Judges, or is this a feeling that there won’t be a many negative effects, and they are just clearing out some backlog of foreclosures that could have been filed in February, March and April?

However it goes…it does look like we still have some time left before the foreclosures clear off the market.
Interestingly, foreclosure (REO) listings in our area at the end of May only accounted for less than 5% of the active listings on the market….however they accounted for almost 44% of all sales in the previous 3 months.

So as the new foreclosures hit the market…there will be some opportunities out there for  home buyers to maybe get into a home that only 4 years ago was out of reach. But one has to be quick if one comes on the market you like, cause they don’t last long.

You can search for properties on my website www.realestate-southernoregon.com. However, the feature to search REO properties does not work at this time due to some reporting issues with Southern Oregon MLS, but I will be working on fixing that problem to give people better access to doing their own property research.

In the meantime, if you want REO listings sent to you…contact me directly and I will set something up that will alert you when new REO’s hit the market.

Bank sells house to different sellers at same time

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Here is a funny story I read online today.

In San Clemente California, a house was sold to two different sellers, at the same time. You can read the whole story here, but I will give a short synapses, with my personal commentary.

Douglas Garhartt and Brandon Lively  bought a 3-bedroom condo on March 11. The seller had been in default on his mortgage and Garhartt and Lively purchased the place as a short sale for $365,000.

But on March 15, OneWest Bank, the bank that was involved in the short sale, sold the same property at auction for $346,896 to a group of real estate investors.

So those appear to be the basic facts. Both buyers are trying to figure out what to do, and who is at fault here. But most likely first buyers who purchased the short sale will get to keep the house, while the investors will be left trying to figure out how to get their money back.

So what happened here? From a Realtor’s perspective, this goes to the heart of what I have been telling clients for a long time. These big banks have different departments that do not effectively communicate with each other.

You have a Loss Mitigation Department that works on trying to modify loans, short sale, etc…to keep the house from being foreclosed on. And then you have the Debt Collection/Foreclosure department that is following their old fashioned method of hounding and harassing the borrower, and foreclosing. Foreclosure is the most expensive option the banks generally have.

One would think that the banks would want to do everything they could to minimize their losses, yet they continue to foreclose, and lose more money. You would think that they could assign one person/department to work with the homeowner, and their representatives (ie…Realtors, Bankruptcy Attorneys, etc) and come up with a solution that worked in the best interest of all parties.

But it is so clearly illustrated by this article what actually happens in these large banks. If the executives at these banks wanted to really make a difference, save their companies money, etc…they would look at this story, talk to the people on the ground, and change the core way they do business.

Since that isn’t going to happen, what can the average person do, and what lessons can be learned.

The big lesson is the risk of buying a house on the courthouse steps. You don’t get title insurance on the courthouse steps, and basically have to pay cash. That is why the short sale buyers will most likely keep the house. They have title insurance. So either they keep the house, or the title company has to pay them back.

The investors on the other hand will most likely need to spend more money to litigate a settlement, either from the bank, or the title company that was involved.

If you are in the Ashland or Medford Oregon area, and want to talk more about this, don’t hesitate to contact me. adam@agentinakilt.com

Looking for a deal on a foreclosure?

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Have you been looking for a deal on a house in the Medford Oregon area, and thinking that maybe buying a foreclosure is the way to go? Well, you are not alone.

Of the 59 houses that have been listed on the market that are owned by banks, 16 of them are already under contract. The average days on market for these houses was 9 days.

There are definitely buyers out there looking for deals, and many of them have been looking long enough that when they see one, they are prepared to make an offer on it.

What does prepared mean? They have their loan/financing information set and they have seen enough houses to know the deal when they see it.

One example was a house for sale in Ashland that was bank owned. The listing agent priced it very competitively at $209,000. Within the first couple of days, there were 3 offers in on it. Those buyers were told to have the best offer back into the bank by Monday. By Monday there were at least 3 more offers…including an all cash offer…and at least one offer for $15,000 over list price.

So if you are looking for a deal…my advice is to be prepared.

Storm before the Calm

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The following is an article that I read this morning about delinquencies in mortgage payments nationwide. The reason I say it is the Storm before the calm, is I have run statistics for sales of real estate for the last 12 years, and I am excited about the prospects for this coming year. I will be posting my results, and my analysis soon.

Delinquencies, Foreclosures Reach Record Highs
One in every 7.5 U.S. homeowners were either behind on their mortgage payments or in foreclosure in November, according to a report by Lender Processing Services, a mortgage performance data and analytics firm. Its December 2009 Mortgage Monitor report summarizes mortgage industry performance indicators based on data collected as of November 30, 2009.

Total delinquencies excluding foreclosures rose to a record high of 9.97 percent, which represents a 5.46 percent increase over the previous month and a 21.29 percent increase over a year ago. The report also finds that 5.01 percent of loans became more delinquent during the month, compared to 1.52 percent of loans that improved.

The November foreclosure rate rose to 3.19 percent, but foreclosure starts declined as a result of loss mitigation efforts. Fewer foreclosure starts, combined with the steady increase in delinquencies, is resulting in a growing shadow inventory of troubled properties, the report concludes. TUE, JAN 12, 201 from CRS Member Connect

If you are local and personally in this position, it benefits you to find a Southern Oregon Realtor who knows about loan modifications, short sales, and the foreclosure process. I am experienced in the process, so if you need to talk to someone about that, feel free to give me a call.

New forclosure listings

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The start of this week saw 19 foreclosures either be listed for sale for the first time in Jackson County, or come back on the market after a previous offer didn’t pan out.

The highlights are

West Medford, 1120 square foot 3 bedroom home (looks like maybe a townhouse) for $59,900

East Medford, 1650 square foot home on a third of an acre for $130,500.

Talent 2004 home built  by Suncrest for $169,900. This is a Great Buy. Seller says they will assist with closing costs.

Central Point, 4 bedroom, 2 bath on almost a half acre. $174,900

Ashland, which has the fewest foreclosures in the county had no new one this week.

Buying REO properties have their own challenges, so if you are interested in doing so, contact me with questions about whether it is the right decision for you.

Latest Foreclosures In Central Point

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In the last two days, the latest foreclosures to be listed for sale are in Central Point.

*One located on Ester Way and looks like a good bargain. A little over 25oo square feet on 1.78 acres. The house was built in 2001 and currently appears to be owned by Wells Fargo. The price on this house is $299,900.  This is a rural piece on a well, but also on RVS sewer.

*The other new bank owned property in Central Point is on Bush street. It is under 750 square feet, and looks a little rough. But it is priced just below $100k at $99,900.

I have not been out to see these properties yet because they are so new. If you or someone you know want to take a look at them, I would love to go out and be surprised, or horrified with you. When looking at Foreclosed properties, you never know what you are going to find. Every once in awhile they are in good shape, but more often than not, there is a lot of work that needs to be done.

 

 

 

 

 

*Information provided by SOMLS and is deemed to be reliable, but not guaranteed.

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