Pre-foreclosure
200 Banks at Risk to Fail in 2012
Sunday, May 13th, 2012 | Bank owned, Foreclosures, Pre-foreclosure, Real Estate Investing | No Comments
According to a recent report released by Trepp, there are more than 200 banks earmarked for likely failure in 2012. Three have already failed. Georgia has the largest concentration of those identified (41), followed by Florida (32), Illinois (24), and Minnesota (12).
The stats represent a slowdown from this same time last year, with 22 at the end of April 2012, compared to 39 at the end of April 2011. Why the slowdown? Struggling banks are being given more time to course correct, raise capital and improve performance. But, that could mean closures filtering over into next year. Bad commercial real estate loans account for over 70% of non-performing loans at the failing banks, followed closely by residential real estate loans with 25% of the total.
For the full article, click here.
Fannie Mae Avoids Q1 Bailout
Sunday, May 13th, 2012 | Foreclosures, Pre-foreclosure, Real Estate Investing | No Comments
Taxpayers are getting a little breather as Fannie Mae turned a profit at $3.1 billion, passing the $2.8 billion required Treasury payment. This is the first time since going into conservatorship in 2008 that the GSE hasn’t required a draw.
Fannie’s CFO, Susan McFarland, is anticipating continued strong performance results. “Our credit performance is headed in the right direction with significant improvement since 2009, and we expect that the reserves we have built to cover future credit losses on the pre-2009 legacy book of business have reached their peak.” Fannie lowered their reserve for credit losses by $2.3 billion, and the rate of serious delinquencies continues to drop. As for new mortgages? Tighter restrictions such as a 763 FICO score and loan-to-value ratio of 70% ups the screening process.
Read the full article here.
Rentals Overshadow Retail
Sunday, May 13th, 2012 | Foreclosures, Pre-foreclosure, Real Estate Investing | No Comments
The latest numbers from Zillow’s Rent Index are out, and rentals are up across the country. The rent index rose 2% in February 2012 over 2011, while the Home Value Index fell by nearly 5%. In February, foreclosure sales accounted for 20% of all home sales.
“The rental market remains especially strong in areas that continue to experience consistent home value declines,” such as metro Chicago and Philadelphia. There are still problems in the housing market that are getting in the way, such as high negative equity and tons of foreclosures (including the shadow inventory). The increase in rentals is good news, however, especially for real estate investors who are attracted to distressed properties and will decrease overall inventory.
Read the full article here.
2012 Could Be a Record Year for Short Sales
Sunday, April 29th, 2012 | Bank owned, Foreclosures, Pre-foreclosure, Real Estate Investing, Real estate short sales, Short Sales | No Comments
Short sales are on the rise. Compared to a year ago, the number of short sales being done increased 33%, according to RealtyTrac. In fact, short sales beat out REO sales in 12 states. In all, 32 states saw an increase in pre-foreclosure sales, typically short sales.
There are also signs that lenders are more willing to accept aggressively priced short sales, as evidenced by the decline in pre-foreclosure home prices. In January, a short sale sold at an average 21% discount, as compared to the price of a non-foreclosure home sale. While the average time it took to complete a short sale actually tripled since 2007 when the average was 113 days, recent efforts have been made to streamline the process. Beginning in June, the GSEs will require servicers to reach a short sale decision within 30 days of receiving an offer.
For the complete article, click here.
Which Lenders are the Fastest for Short Sales?
Sunday, April 29th, 2012 | Bank owned, Foreclosures, Pre-foreclosure, Real Estate Investing, Short Sales | No Comments
RealtyTrac recently put together a list outlining which lenders/servicers move through the short sale process the fastest and the cheapest. The frontrunners? Freddie Mac, Fannie Mae and FHA have the shortest timelines with 193 days, followed by Ally Financial at 321 days and PNC Financial at 353 days.
The short sale timeline being used as a measure starts as soon as the property begins the foreclosure process to the date it is sold as a pre-foreclosure. The new guidelines instituted by the GSEs, which call for a decision within 30 days, will surely change the game. BOA followed quickly by implementing a 20-day short sale decision timeline. As far as pricing goes, the GSEs again lead the way, selling homes for the least amount, averaging just over $128,000.
Read the complete article here.
Housing Comes Out of Hibernation
Sunday, April 1st, 2012 | Foreclosures, Pre-foreclosure, Real Estate Investing, Short Sales | No Comments
Spring is officially here, and that signals an awakening of all sorts, including the housing market. The numbers indicate an upswing not just due to the season, but compared to the slump of the previous few years.
Housing starts are up 19% over the past year. Not only that, but they are up 34% in February 2012 vs. February 2011. Add to that an increase in the National Association of Home Builders confidence survey, reaching the highest level since mid-2007. So what is contributing to this shift? Reduced unemployment, new rental construction and stabilizing home values in neighborhoods, to name a few.
Read the complete article here.
Short Sales to Rise Again
Sunday, April 1st, 2012 | Bank owned, Foreclosures, Pre-foreclosure, Real Estate Investing | No Comments
This is a sort of continuation of the article I shared with you last week indicating good news about short sales for real estate investors. The government has reached a $25 billion settlement with the five biggest mortgagers over robo-signing practices. This move is expected to increase the amount of completed short sales.
With this new settlement, “loan servicers will receive credit when they approve sales that include forgiveness of a portion of underwater homeowners’ debt.” While not a huge portion of homeowners will be helped directly, it does remove some of the daunting barriers that have kept homes in the foreclosure pipeline for long periods of time. Of the total $25 billion, $5 billion will go to paying fines, $17 billion is ear-marked for homeowner relief and $3 billion will help underwater borrowers refinance.
To read the complete article, click here.
Current Shadow Inventory = Half of Visible Inventory
Sunday, March 25th, 2012 | Bank owned, Foreclosures, Pre-foreclosure, Real Estate Investing | No Comments
Last week, CoreLogic reported that the number of homes currently in the shadow inventory is roughly half the number of those currently in the visible inventory. On top of that, about half the shadow inventory has not made it into the foreclosure cycle yet. Altogether, the total shadow inventory includes 400,000 REOs, 410,000 already in foreclosure and 800,000 seriously delinquent mortgages.
Together, this means that the rate of distressed sales, which includes REOs and short sales, is equal to the rate at which homeowners are falling into some state of delinquency. Distressed sales are keeping the shadow inventory under control, with roughly 3 million completed since January 2009. CoreLogic estimates that the 1.6 million properties in the shadow inventory represents a 6-month supply. One-third of the total shadow inventory is located in California, Florida and Illinois. In addition, loans of $100,000-$125,000 represent the biggest portion of the total.
Read the complete article here.
Be a Pro By Learning These 5 Things
Sunday, March 25th, 2012 | Foreclosures, Pre-foreclosure, Real Estate Investing | No Comments
There are certain characteristics or traits that every successful real estate investor looks for in an area before buying a home, whether to rehab, retail or wholesale. Knowing these five things can make a significant difference in the success of your exit strategy and in turn, impact on your profits.
These are all things that me and my coaches have been telling SREC students for years, because they can really make a big impact on your business. They are all elements that factor in to your investing sweet spot:
- Learn local pricing – Make sure you understand pricing trends in an area. What is the average home price here, compared to neighboring towns? You’ll not only learn which areas are in demand, but also understand what is considered fair pricing.
- New roads, shopping centers and schools – Where there is a new infrastructure being put in place, there is growth and the hint of an up-and-coming area, making existing homes more desirable.
- Find low-tax alternatives – A community’s tax structure can greatly impact your investing decisions. A community with a low tax structure will be more desirable than one nearby with a higher tax structure. Beware of communities that seem overcrowded – a tax increase to pay for infrastructure improvements may be on the horizon.
- Good schools – Strong school districts are a prime signal of a desirable area, especially to parents with young families.
- Outer suburbs – It’s no secret that with big cities usually comes big home prices. So that’s the time to look to the outskirts and snag the good deals while you can, because it’s just a matter of time before the population spreads beyond the city limits.
To learn more, click here.
Time to Get into the Rental Game?
Sunday, March 25th, 2012 | Foreclosures, Pre-foreclosure, Real Estate Investing | No Comments
This is good news for anyone who is looking to get into the rental property business. Zillow recently released their Zillow Rent Index which examines the home rental markets around the country. Despite falling home values, the median rent rate increased 3% from January 2011 to January 2012.
That 3% number is much higher in many markets, in some cases matching the home value decline rate. For instance, in the Minneapolis-St. Paul market, home values fell just over 8%, but rent rates rose 11%. We’re seeing similar numbers in Chicago, with values dropping over 10% but rent increasing by 9%. According to Zillow Chief Economist Dr. Stan Humphries, “A thriving rental market will stimulate home sales as investors snap up low-priced inventory to convert to rentals. That, in turn, will lower the number of homes on the market, which will eventually help put a floor under the values of all homes.”
To read more, click here.
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