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Bank of America Stops Foreclosures in All 50 States

October 15, 2010 by Leave a Comment

In the case of president Obama they are stopping foreclosure in all 57 states.

How would you like to get up tomorrow and not have a mortgage payment? I’m sure many people would.  How would you like the security of a home that is free and clear? About one third of the population of the United States owns their homes free and clear and that means no mortgage payment. There are many other Americans that will get up tomorrow and not make a mortgage payment.  These people are in a totally different camp all together.  They do not have a mortgage payment right now,  however,  these people do not have the security of staying in their homes long term either.  It’s a terrible position to be in.  I personally know some  people that have been in their homes not making a payment for almost 2 years now!  With this freeze on foreclosures by several large institutions who knows how much longer this will go on.  Many believe, we need to foreclose on these non performing loans  in a timely manner and get the properties on the market, and sold to new buyers that will make the payments, before the market can begin to recover.  This current roadblock will only prolong the inevitable.

Just recently Fannie Mae and Freddie Mac have instructed the banks to start speeding up the foreclosure process and get rid of the shadow inventory on their books. Truth is, once the banks start certain foreclosure processes they are required to have greater and greater reserves on hand to meet those loan losses.  If the banks put too many properties into foreclosure all at once they quiet simply would not have enough reserves and the Feds would  have to drive up in their large black American  SUV’s  and cart away all their records. The free market as far as banks are concerned would be over.  The banking system would have to be nationalized. There is a very fine line for the banks to keep profits positive and stock prices up so that they are stable enough put away x amount of  reserves to handle x amount of foreclosed loan losses. This is why we have shadow inventory and why we are unable to get an accurate number on it. Matter of fact, do we really want to know?

This procedure error of not reading the foreclosure documents properly and signing in front of a notary will get resolved.  Whether by the banks or the administration it will get resolved. The country must move forward and housing is a big key in doing that. Many people have their wealth tied up in or to their homes and values must begin to stabilize and even begin to appreciate.  In the lower price ranges we have already hit the bottom and prices are moving higher. As the correction takes place,  people will feel better about their nest eggs and consumer confidence will begin take off.   Now is the window period to become a home owner for the first time or to move up!

Filed Under: Economy, Foreclosure, Loans, Shadow Inventory Tagged With: , ,

How Much Shadow Inventory Is There Anyway?

October 1, 2010 by Leave a Comment

Do we really want to know just how many properties are considered “shadow inventory” ?

I’ve seen the shadow inventory figures quoted all over the place. What is the real number? I don’t think we will get an accurate figure by just looking at the distressed property sites a person can subscribe to for a fee.  And I don’t think you’ll here an accurate number quoted by the banks.  It’s not in the governments best interests to let the cat out of the bag. The highest number of  Option ARM’s are coming due for their first adjustments in 2010 thru 2011 time period.  Many of these loans will be unaffordable by the current owners  after these first adjustments if they aren’t already unaffordable before the adjustments.  Particularly in the higher price ranges,  you have a tremendous number of  individuals that had great incomes in the go go years but have been living on their credit lines for a while now and well,  it’s just a matter of time  before they run out of equity line.  I personally know of  homeowners  that have  been living in million dollar homes  and that have not made a payment in 20 months now yet, the banks have not set an auction date for the property. The banks do not want to foreclose on these large properties because they know that the  loses on these properties requires a huge write off  and larger reserve requirements by the regulators on these banks.  In addition, large properties come with high costs just to maintain them let alone getting them back in shape enabling the banks to liquidate them in a timely fashion.  On the positive side,  there doesn’t seem to be enough of these higher priced  bank owned properties (REO’s) coming to market for the current demand that is out  there . Because they are price aggressively, there is an appetite for them and they generally sell quickly and quiet often involve multiple offers.

Filed Under: Bank Owned, Foreclosure, Real Estate, Shadow Inventory Tagged With: , , , ,

Buying A Foreclosure At The Courthouse Steps Is Not For Novices

September 29, 2010 by Leave a Comment

Many buyers ask me “what about buying a foreclosure at the courtyard steps?”

Even though a significant number of properties are being bought at the court yard steps, this is not the average consumer who is doing this. The buyers who are buying on the courthouse steps are battle hardened investors with the skills and tools necessary to do this. They are after all buying all cash. To limit the risk of purchasing a property with numerous encumbrances  whether known or unknown and buying more than they ask for, these sophisticated buyers often have an account with a title company and are on their laptop with an aircard checking the condition of title right at and up to the auction time to limit their exposure. Buyer beware is critical in this situatiuon.

Filed Under: Foreclosure, Investing, Real Estate, Technology Tagged With: , ,