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Foreclosures to persist
According to authors at the Federal Reserve Bank of Cleveland, the nation’s high foreclosure rate is likely to persist. The Fed article looks at the changes in foreclosure and unemployment rates across states, noting the differences in the timing of the movements. The conjecture that the high foreclosure rate will persist is based in part on the observation that states that experienced boom-bust housing cycles in the past (Texas, Oklahoma, Massachusetts and California) had elevated foreclosure starts for years after the peak in foreclosure starts and inventory. These previous boom-bust cycles “were small in comparison to the current cycle,” the article said. While the recession has left deep scars in the housing and labor markets — with the unemployment rate doubling and the foreclosure start rate roughly tripling — the timing of the movements differs over the cycle, according to the abstract, written by the vice president at the Federal Reserve Bank of Cleveland, and K.F., a research assistant.
In So-Cal every Wednesday morning there is a short sale workshop open to the public, allowing homeowners, agents, brokers or investors the opportunity to see and participate in how and why this has been changing communities across our nation. Join us this week or any week for a fulfilling chance at making a difference in the lives of others.
** When to seek outside investors to help fund your growing real estate portfolio so it’s only natural that we should also spend a little time talking about the pro’s and con’s of various investor types. Not every investor is created equal; the trick is to learn how to find the ones that bring the most value and the least constraints to the relationship. Here is a quick overview of the most commonly encountered types of outside investors and how each may play an important role depending upon your current needs.
1. High Net Worth, Experienced in Industry, Exceptional Contacts. This is the most desirable outside investor possible. Not only does this person have sufficient capital to invest but their industry and professional affiliations can open doors that would otherwise be ‘off limits’. Not only do you benefit from access to capital but even more importantly, learn from their experience and expertise while meeting the “right” people. However, preparation is essential and a wrong step could have dire consequences for years to come.
2. High Net Worth, Experienced in Industry, Related Contacts. This can be a win-win situation for those that are long on short sale or real estate experience but a bit short on cash; by teaming up with someone that has plenty of cash sitting idle you are able to provide the expertise required to put it to work. Often these persons have valuable contacts outside of real estate; for example, doctors, lawyers and other professionals. It may be necessary to provide extensive explanation and education prior to investing in order to put the person or group at ease.
3. High Net Worth, Experienced in Industry, High Contacts. Plain and simple, this is one of the most frequently encountered types of investors the novice short sale entrepreneur is likely to encounter; someone simply seeking a return on their money rather than watching it waste away in a bank account or the bond market. Although the money is often a welcome addition to your individual growth plans, it often comes with a rather steep price tag…a lot of oversight and explanation. Family member, retirees and small investment groups often fall into this category which can add even greater volatility to the equation.
If you know someone in danger of losing their home to foreclosure and need some professional assistance, do them a huge favor and give them my personal email::: 3feet2go@gmail.com I CAN HELP THEM!
BofA Agrees to Pay $108 Million to Overcharged Countrywide
Borrowers Representing one of the largest judgments imposed in a Federal Trade Commission (FTC) case, two Countrywide mortgage servicing companies, now part of Bank of America Home Loans, have been ordered to pay $108 million to settle charges that they collected excessive fees from cash-strapped borrowers who were struggling to keep their homes. In a statement released Monday, the FTC said the $108 million settlement will be used to reimburse overcharged homeowners whose loans were serviced by Countrywide before it was acquired by North Carolina-based Bank of America in July 2008. Bank of America said it agreed to the settlement “to avoid the expense and distraction associated with litigating the case.” According to the FTC, Countrywide used unlawful practices in Servicing homeowners’ mortgages.
The company allegedly charged excessive fees for default-related services, made claims about amounts owed by homeowners in bankruptcy that were false or couldn’t be backed up, and didn’t tell people going through bankruptcy when new fees or charges were being added to their loans. Going forward, borrowers in Chapter 13 bankruptcy must be sent a monthly notice with information about what amounts are owed – including any fees assessed during the prior month. Additionally, the defendants must implement a data integrity program to ensure the accuracy and completeness of the data they use to service loans in Chapter 13 bankruptcy.
Demonstrate the ability to pay the loan and you are halfway toward becoming a commercial investor. Critical is an understanding of the major risks associated with commercial loans from the lenders perspective. Use this as a quick checklist when putting together an offer or evaluating your own potential.
1. Credit Risk. Perhaps the most common type of risk, this simply indicates the ability of the borrower to meet the contractual obligations as outlined in the loan documents…aka, the ability to pay. However, because you are dealing with commercial loans, the credit risk can be impacted by several items including competitive market factors (ie, the inability of the property to lease as expected, increased or decreased demand etc), interest rate sensitivity, rollover of leases (long term leases may be stable but are also more prone to declining values), changes in regulatory environment including zoning and tax laws.
2. Interest Rate Risk. The majority of commercial real estate is financed on a floating rate basis so interest rate risk is a very real threat depending upon the timing of cash flows, yield curves and other economic conditions that may adversely impact the economic climate.
3. Liquidity Risk. Banks must meet obligations the same way that private individuals are required to do so; loss of liquidity means the bank is unable to extend credit or must call loans in order to raise capital. For an investor, liquidity risk is typically isolated to the ability of the bank to loan money in the future should you require it in order to roll-over or refinance a loan.
4. Compliance Risk. Once the domain of elusive economic theory, compliance risk has risen to disproportionate levels thanks in large part to the current crisis as well as outside influences. Examples are broad but range from potential liability of bad debts during the mortgage boom to the current oil spill at BP; a bank may be held responsible for assets held as collateral. High risk assets will be assessed a premium.
Real estate investors seeking entry into the exciting world of commercial real estate should review each property from the perspective of the lender; examine risk levels and potential threats through the eyes of the bank in order to maximize your prospect for success.
With defaults continuing to mount and declining property values still widespread, the industry is seeing an increase in short sales. Such transactions are expected to burgeon even further now that the federal government has implemented its Home Affordable Foreclosure Alternatives (HAFA) program. With the new policies and still-precarious market conditions, short sales are gaining in popularity among lenders and distressed homeowners alike, but as with any modus operandi that rapidly picks up steam, this proliferation can open the gate for fraudulent activity. Experts say one area of the short sale process particularly vulnerable to fraud is property valuation. Bank-owned fraud attributed directly to schemes involving short sales and REO inventories has increased by 40 percent over the past year and has more than doubled from two years ago, according to market data from the California-based risk mitigation firm Interthinx.
Will you know the first step in helping others out of a bad place, start today by investing in your community and earn a very large income, for doing just this. Today can be the start of a great opportunity, when you apply yourself in obtaining knowledge in DIY REO Short Sales!
The best is here and now, we use Xypex to waterproof from the positive or negative sides of block walls that have been painted and their products work like nothing else on the market. Read further that even the President agrees with this newer waterproofing method, who knows how much he may know about building and construction methods? But we know here at My-diy that its works, over and over ……….
Remarks by President Obama concerning:
“NEW CONCRETE MATERIALS THAT LAST LONGER AND ARE WATERPROOFED FROM THE INSIDE OUT...”
At a press conference on July 2nd, 2009 in the Rose Garden of The White House, President Obama, after meeting with CEOs from a number of “innovative energy companies”, spoke about a new clean energy economy and the importance of encouraging these companies’ efforts.
Based on his discussions with these CEOs, President Obama cited energy saving examples such as LED lighting and solar energy innovation. Most importantly, from our point of view, he also included comments about new concrete materials:
“New concrete materials that last longer and are waterproofed from the inside out, and that can mean that bridges and roads and buildings can last 20 or 30 years longer than using conventional concrete.”
His comment indeed represents support for integral concrete waterproofing as an alternative to traditional membrane or barrier systems, a challenge and opportunity that has been the very basis of the concept, design and development of Xypex crystalline technology. Xypex has, without doubt, led the way with integral concrete waterproofing in North America and, although The President did not endorse any particular product, we are very pleased that he is so clearly drawing attention to our type of technology and innovation.
D’Arcy Mainwaring
President
Interestingly enough and more often than not the Realtor’s are getting in the way of too many home owners that are upside down in this real estate market. They have found most of the NOD’s that have the lenders { mortgage servicer’s } all up in arms over their ever growing long list of non performing assets. While very few investors have the magic pill that can fix most of these peoples problems, some do know how to execute short sale potential properties, and save the home owners themselves 7 years of misery, as well as, getting the banks closer to doing what they do best, ” lending money “.
One major snafu that’s not working is the way the Realtor goes about this tricky process, causing lengthy negotiations and or no buyers during the home owners time of need. The caveat here lies in understanding exactly what it is that the banks are truly looking for, and securing a huge opportunity for several entities.
When it does go smoothly and a fix and flip might be the exit strategy, a full blown kitchen remodel will take place, Home Depot can employ more help, and the real estate investor has upgraded a home that will create jobs in the consrtuction industry enabling the home to appraise higher and the state can collect more revenue to repair the roads…… etc. etc.
In a short sale transaction, the lender has to verify the negotiated price before the completion of any contract signing. Perhaps there is a lot of red tape to push through, but this one will make or break any offer you have submitted to the mortgage granter. So many of the lenders BPO agents are super swamped with daily lists of defaulted homes to review, that likely they are more than convinced a ” drive by” appraisal will suffice. 
Stay cool and play your hand right, because the ability to influence the BPO will behoove all parties involved. The owners need help out of a dire time, and you may have that trump card, that can enable a justifiable reduction in value to solve this economic environments foreseeable future. Learn more today.
Extensive water damage from an upstairs bathroom could just be the ace in the hole, and with a “drive by” agent never understanding the true circumstances that have justified your offer.