Which REO Should I Buy?

As we start the new year of 2011, it promises to be more of the same. The economy is still sluggish, unemployment remains high, and foreclosure rates are continuing to climb. The retirement accounts people have been counting on for years are now evaporating under the added strain of bad economic conditions, increased taxes and government intervention and a general malaise of the public towards the future.

Due to these factors many investors are finding it necessary to take a more active role in their investment strategies. They are no longer willing to let some “wall street” yuppie with no business experience handle their retirement accounts or more to the point, their family’s future. To some investors the answer is to take a more active role in controlling their investments by becoming involved with more tangible assets, ones they can see, touch, and feel – like real estate. For these awakened investors, owning rental property can be an extremely effective way to protect their capital and generate cash flow.

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Banks still holding 70% of REO from market

RealtyTrac Senior Vice President Rick Sharga said major banks currently hold roughly 1 million REO, or homes repossessed through foreclosure, but only 30% have actually made it onto the market.

RealtyTrac is an online real estate channel where potential homebuyers look for properties discounted after the foreclosure process, along with more traditional sales. It also puts out monthly foreclosure numbers across the country by tracking filings from notices of default through repossession at the county level.

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How Banks Manage the REO Properties?

REO properties have now become the first choice of any smart home buyer. These properties are equally liked by the seasoned investors and the real estate beginners. These are those properties that have been acquired by the lender or the bank if there is no sale in the foreclosure auction. A property moves in the foreclosure process if the owner has taken loan from the lender or the bank to purchase it but is not able to make payments to the lender or the bank.

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REO Properties – Tips and Suggestions

Lots of people are talking about REO properties; but do you know what they are referring to? When a bank forecloses on a property, they don’t want it. They put these foreclosed properties in a public auction; the ones that don’t sell are referred to as REO properties. REO properties can consist of anything from apartment buildings to vacant land.

Banks don’t deal in the real estate business; they only want to get cash. Because they only want to sell the property as quickly as possible, you can usually find REO properties listed on their website, along with the name of the loss mitigator who’s managing the sale of that property. The loss mitigator is similar to a real estate agent; you will need to contact him or her to set up a viewing, and make an offer if you’re interested.

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Looking For A Good Deal On A House: Bank REO’s Can Be Quite The Steal

One reason is that bank-owned sales transactions can be more complicated, in part because the sale terms must be approved by the lender or the lender’s attorneys. Another reason it is difficult dealing with bank-owned properties is that some lenders are in offices far away from where the loss-mitigation department is struggling to process the listings.

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Bank REO’s Can Be A Risky But Great Investment

After a repossession from which the property becomes classified as REO, the bank will go through the process of trying to sell the property on its own or obtain the service of an REO Asset Manager. The bank will remove some of the liens and other expenses on the home and try to resell it to the public, either through future auctions or direct marketing through a real estate broker. The asset Manager will also try to contact REO realtors that specialize in certain zip codes to help sell this bank owned property. Bank REO properties are generally in poor repair and maintenance.

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Why Are Banks Withholding Highend Repossessions Over $300,000 From the Market?

With the expiration of the first-time buyer tax credit on April 30, there are now two main props keeping the housing market afloat. One is the growing percentage of home sales financed by Federal Housing Administration (FHA) loan guarantees. The other is the refusal of banks to put on the market foreclosed homes over $300,000.

In this article, we will take a look at the second factor. A future report will examine the role of the FHA in keeping the market from collapsing.

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National Home Prices Show Strong Growth Over Last Year

Despite record unemployment and REO levels, US housing prices through June 2010 showed significant improvement nationwide. Housing prices in the US Midwest showed double digit increases year-over-year, posting the strongest gains in the country. See the following article from HousingWire for more on this.

House prices rose in June across the US in both the rolling quarter and the previous-year data, according to real estate asset valuation data provider Clear Capital.

National prices rose 5.2% over the previous three-month period and 8.8% since June 2009. The quarterly and yearly growth seen in June builds on already positive data, after prices climbed 6.8% in May from the year before.

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Home Sales Around St. George Driven By Bargains

Foreclosures and short sales are driving around 70 percent of property sales around St. George in southern Utah, real-estate officials say.

The redrock town near national parks and wide-open public lands has been battered for nearly two years by a recession that put a halt to rapid development with some speculation.

Officials say sales of new and existing homes picked up in Washington County for a second month in May to 361 -- up by 51 sales over the same month last year.

But officials expect a dip in market activity this summer now that a federal tax credit for home buying has expired, followed by a slow recovery that could keep home prices low for two or three years before they rise again.

"The key there is that we stopped falling," said Allen Carter, owner of Southern Utah Title.

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REO Pet Peeves

For the last three years I’ve been pursuing REO properties that are listed on the MLS, and while it’s been a great run so far, there are definitely some frustrations that come with working in this niche. For those of you who have incorporated the MLS into your acquisition strategy, you probably know what I’m talking about!

Following are my top four pet peeves about working with bank owned properties. Feel free to add to my list if you have some of your own!

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Supply Of REO Properties Projected To Reach High Point In August 2011

The amount of REO inventory held by lenders is expected to peak in August 2011 at 545,000 properties, according to analysts at Barclays Capital.

In April, REO remained relatively flat, increasing 0.8% from March to 526,000. The influx was primarily due to an increase in REO from the government-sponsored enterprises (GSEs), according to BarCap.

Analysts also reported that properties are taking roughly 23 months to move from foreclosure to REO. Servicers are showing signs of caution, not wanting to shock the fragile housing recovery with too much inventory, according to analysts. And foreclosure moratoriums are the first line of defense. Moratoriums announced by the major banks and GSEs are the latest example.

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Real Estate Flipping Mistakes to Avoid

So you want to get in the Bulk REO business, right?

You’ve seen the seminars, the infomercials, the webinars and it seems like you can’t lose. Then why is it so hard to find the deals they all talk about?

The truth is, it’s not really that hard. But with so many people in the “game” that are attempting to grab a piece of the pie, it does seem to be more complicated than it should be.

REO means “Real Estate Owned”. Years ago, we called them bank repos, or bank repossessions. A homeowner did not pay their mortgage, and after a lengthy foreclosure process, is evicted and the home is placed for auction, short sale, or a combination of these processes.

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Tenant Act Forced Changes to Eviction Process: REO Expo Panel

A panel of asset managers and an attorney whose firm specializes in eviction law had stern warnings to REO brokers dealing with occupied properties — minimize your risks.

When the Protecting Tenants at Foreclosure Act (PTFA) was enacted in May 2009, it completely changed the way REO evictions are conducted, said Robert Jackson, president and managing attorney at the Irvine, Calif.-based Jackson and Associates law firm.

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Short Sale Investing – Are the Banks Focusing More on Short Sales, Instead of Foreclosure?

Over the past 12-24 months, in specific sections of the country the banks have been completely bombarded with foreclosures, and now they have got no choice but to lower their prices so, the people who buy REO’s and know short sale investing, can make a great deal when buying a residence directly from the banks. Many of the banks are now concentrating on Short Sales, rather than foreclosure.

Certainly it depends on which section of America you reside in. Believe it or not, there are several areas of the country where home prices have not dropped that much, while other parts of the nation, like California, Nevada, Arizona and Florida, prices have collapsed. In the regions of the county where home values have fallen drastically, you are in position to produce a great deal when buying from the banks. In the parts of the country where prices have fallen just a little, you may be unable to make as good a deal, but you should still be able to obtain a home for around 15% or more below current market value.

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Las Vegas and California Cities Show Top Foreclosure Listings

The mortgage crisis is hitting states all over the country. No state is exempt from feeling the pinch financially and all of the housing markets are looking quite bleak. However, the hardest hit areas are in the states of Nevada and California. The worst city for housing markets is Las Vegas where the foreclosures are the highest. On the list of the top 20 cities for foreclosures, 17 of these were in California, Florida, and Nevada. It is estimated by many that over 3 million people will face foreclosure this year alone. Some other states where the numbers are increasing are Oregon, Utah, Illinois, and Arkansas as well.

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Buying a REO – 4 Steps For Analyzing REO Property

When buying a REO property, our money is made when we purchase rather than when we sell. We must get a bargain in order to cover the cost of repairs, the cost of holding, the cost of selling, and a reasonable profit.

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