Jona "The REO Man"'s Blog

Which Lender has the most (REO) properties for sale? (Update)

Jona "The REO Man" from Kona (BOP) — Wed, 03 Jun 2009 22:05:04 -0500

With foreclosures now making up almost 50% of all home sales nationwide and the major banks still holding most of the assets, you may wonder who has most REOs for sale.

As of today (June 3, 2009), the troubled mortgage company, Countrywide Home Loans (now part of bank of America Home Loans) shows approximately 51,000 properties for sale on its REO site. The new owner of Countrywide, Bank of America, has only about 2,000 listings.

The numbers for Wells Fargo have gone down since last year and it now only show-casts approximately 11,500 for sale on its website.

Just before having been taken over by Chase, Washington Mutual started offering its REOs on-line and it is showing approximately 6,000 properties. Parent company Chase offers an additional 5,000 or so. Their site is not very user friendly and very hard to search.

The last of the four big US banks (which happens to have taken the most bail-out money and seems to be in the most trouble of the BIG 4), CitiGroup shows exactly 8,850 as of today.

To see a list of some of the other (major) lenders, please check out http://myneighborhoodforeclosures.com/

WaMu is now offering its REOs on-line

Jona "The REO Man" from Kona (BOP) — Sat, 25 Oct 2008 19:03:50 -0500

Washington Mutual is now offering its REOs on-line

WaMu has finally figured out that in order to get of its huge inventory of 40,000 bank owned properties (second largest behind only Countrywide HomeLoans' approximately 58,000 properties), it needs to reach out directly to the public by advertising on-line rather than have its broker network take care of it.

It may have to do with the fact that WaMu is now part of JP Morgan Chase, that all of a sudden there is an urgency to sell the bank owned properties. Maybe before the takeover, there was a sense of "ifwe do notlet the public know we have this many properties in our inventory, they will not realize we are in trouble". As you may know, WaMu was the largest originator of subprime loans and these risky option ARMs, they are now foreclosing at an alarming rate.

For listings of all bank owned properties,check out http://myneighborhoodforeclosures.com/ or http://allforeclosures.googlepages.com/lenderwebsites

Cook County (IL) Sheriff is suspending all foreclosure evictions - good or bad?

Jona "The REO Man" from Kona (BOP) — Thu, 09 Oct 2008 21:43:27 -0500

Cook County (IL) Sheriff is suspending all foreclosure evictions - good or bad?

Is the sheriff suspension of foreclosure evictions good or bad? The move is made to protect innocent renters from being evicted because their landlords did not pay their mortgages. Banks and mortgage companies represented in the Illinois Bankers Association are saying the sheriff is breaking the law by not following court orders for evictions.

Is sheriff Dart a hero or a villain?

Indeed, a certain percentage of renters will be protected (as I feel they should be) but it also rewards homeowners (some who are living in the home and some who are not and are collecting rent without paying the mortgage) for their irresponsible behavior.

I do agree that the mortgage companies need to make sure that the person living in the home is indeed the person on the mortgage papers. If this is the case, the eviction can move forward. If this is not the case, the renter should be given at least a 30 days notice to move out.

For foreclosure assistance and prevention details, check: http://allbankownedproperties.googlepages.com/foreclosure-prevention

Bank of America’s own bail-out plan for Countrywide customers in risky loans.

Jona "The REO Man" from Kona (BOP) — Mon, 06 Oct 2008 22:42:44 -0500

Bank of America's own bail-out plan for Countrywide customers in risky loans.

Bank of America announced the creation of a proactive home retention program that will systematically modify troubled mortgages with up to $8.4 billion in interest rate and principal reductions for almost 400,000 Countrywide customers nationwide (125,000 of them in California).

With this plan, Bank of America is trying to create goodwill and also further distance itself from the lending practices that went on at Countrywide for the last few years. After initial promises of keeping Countrywide's management in place and letting them run the mortgage division of the company, BofA has made it increasingly clear that it wants nothing to do with the lending practices that took down the mortgage giant. Dave Sambol was shown the door after just two months, very recently Drew Gissinger and Brain Hale followed.

By working together with state Attorneys General (the Attorneys General of CA, IL and FL assisted in the design of the program. IA, OH, TX, AZ, WA, CT, NC and MI have confirmed their participation), Bank of America sends a clear message that it is "doing the right thing". It could also be that they are trying to prevent major lawsuits down the line. Good business is looking ahead.

The centerpiece of the program is a proactive loan modification process to provide relief to eligible borrowers who are seriously delinquent or are likely to become seriously delinquent as a result of loan features, such as rate resets or payment recasts.

Modification options include, among others:

FHA refinancing under the HOPE for Homeowners Program;
Interest rate reductions, which may be granted automatically through streamlined processing; and
Principal reductions on Pay Option adjustable rate mortgages that restore lost equity for certain borrowers.

The program applies to eligible mortgage loan customers serviced by Countrywide and who occupy the home as their primary residence.

Source: Bank of America pressroom - For more details on the plan, check: http://newsroom.bankofamerica.com/index.php?s=press_releases&item=8272

For other foreclosure prevention and home retention programs, check: http://allbankownedproperties.googlepages.com/foreclosure-prevention

Does this Federal Bail-Out plan affect foreclosures?

Jona "The REO Man" from Kona (BOP) — Fri, 03 Oct 2008 17:12:22 -0500

Does this Federal Bail-Out plan affect the number of foreclosures on the market? Is the plan going to help homeowners? Is this plan good for America?

From what I can see now, there are going to be some provisions in the bill that will help homeowners stay in their homes. Bankruptcy court judges will be able to adjust the interest rates for adjustable rate mortgages ensuring that the homeowner can pay the mortgage and subsequently prevent foreclosure.

There will be another benefit from this bill and that is that the LIBOR will most likely go down in the next foreseeable future. About 50% of all ARM loans are tied to the LIBOR and with rates having moved up in the last few weeks, a drop in the LIBOR rates will definitely help folks who's mortgage is tied to the LIBOR. Peope with ARM rates tied to the 1 yr Treasury index are getting a major break with monthly averages hovering around 1.9% (with a standard 2.6 margin, you could see your ARM drop to 4.5%).

We will probably continue to see the number of foreclosures go up in the next year or so (this will drive down prices overall - I see markets where prices have dropped 50% from their highs now that more than 60% of all homes sold are (discounted) foreclosures. We really need to have all foreclosures flushed out of the market before prices can go up again. I am not predicting this before some time late 2010, maybe even 2011.

For foreclosure listings in your area, check out: http://myneighborhoodforeclosures.com

For foreclosure prevention programs, check out: http://allbankownedproperties.googlepages.com/foreclosure-prevention

Does the Fed rate cut impact foreclosures?

Jona "The REO Man" from Kona (BOP) — Tue, 22 Jan 2008 22:25:17 -0600

Interest rates are going down, that should surely affect mortgage rates and therefore foreclosures, right? Not so fast.

The Federal Reserve interest rate cut by ¾ of a percentage point today means that short term interest are lowered. The effect on long term interest rates is not quite clear yet. Fixed mortgage rates are tied to the long-term bond yield that move up or down based on the long term economic outlook and inflation. I think we all know that long term, our economy does not look that optimistic.

Of course, this rate cut will have an effect on credit card rates and other rates on consumer spending. It will also affect adjustable home equity lines of credit. So the interest rate on that balance you are carrying on your HELOC (from when you paid off some high interest credit cards or bought that car that you really could not afford) will go down.

Today’s rate cut will also affect short-term adjustable rate mortgages, but probably not as much as you might think. This is because this rate cut was already partially priced into the market, maybe not three quarter's point, but definitely a half-point. So if you are facing a reset on your ARM, you are better off than you were six months ago and you will most likely be in better shape in 6 months from now as the Fed is expected to continue slashing interest rates, at least until this year’s presidential election.

Now to foreclosures; does this rate cut affect or stop the foreclosure crisis? It most likely will not as the majority of people who face foreclosure and cannot make their monthly payments do not have equity in their homes and no money to put down on a refinance. With the no-income-no-assets and stated income loans made to people with shaky credit, some even with no money down, everyone was banking on home prices continuing to go up so they could refinance into another ”exotic” loan. With falling home prices, these folks can simply not refinance – which would be for most, the only way out. A few bucks of their current monthly payment is not going to make a difference.

Also, check out: http://myneighborhoodforeclosures.com

A warning from Consumer Affairs on Foreclosures

Jona "The REO Man" from Kona (BOP) — Fri, 04 Jan 2008 18:21:59 -0600

Which Lender has the most (REO) properties for sale?

Jona "The REO Man" from Kona (BOP) — Wed, 02 Jan 2008 22:25:23 -0600

With an estimated half a million foreclosures on the market at the end of 2007, one might wonder why they are not more aggressively advertised. You would think that lenders would do everything they can to get rid of the properties as soon as possible as every day they keep a house on the books, it costs them money. Banks are not in the business of owning homes; they are in the business of financing properties.

As of today (January 2, 2008), the nation's largest residential lender, Countrywide Home Loans shows only approximately 15,000 properties for sale on its REO site.

Wells Fargo shows even more; it show-casts approximately 18,500 for sale on its website.

The third largest residential lender in 2007, Washington Mutual does not even advertise its REOs on-line.

The forth largest residential lender in 2007, Bank of America, for some reason only shows 845 properties for sale on its REO site even though they must have a lot more in inventory. I wonder when the rest of these properties is going to hit the market.

To list some of the other major lenders, please check out http://myneighborhoodforeclosures.com/

One of the answers is that these large lenders simply do not have the staff and systems in place to deal with the huge volume of foreclosures that has hit the market in the recent 9-12 months. Don't forget that this is a fairly recent phenomenon with foreclosure rates hitting all time lows as recent as mid-2006. Once these lenders really start to realize the problems they are having, they will hopefully staff up and start to work more efficiently.

Who is to blame for the Real Estate market downturn?

Jona "The REO Man" from Kona (BOP) — Sat, 29 Dec 2007 12:29:27 -0600

Who is to blame for the Real Estate market downturn?

Consumers for buying homes they could not afford with loans that were bouond to get them in trouble? Lenders for allowing consumers to buy homes they could not afford at terms they knew were going to cause trouble? The government for not having enough oversight? Wall Street for buying the Mortgage Backed Securities without understnding the risks? Rating Agencies for "overrating" mortgage companies and investment companies heavily invested in risky mortgages? All of the above?

Check out overviews of all Bank Owned Properties on http://myneighborhoodforeclosures.com/

Pricing REOs – a double edge sword

Jona "The REO Man" from Kona (BOP) — Fri, 28 Dec 2007 22:21:55 -0600

Overpricing REOs is a risky move for both agents and investors because of the consequences associated with vacant homes and time on the market. Some of the problems we can expect to see with overpricing are loss of interest due to time on the market, recurring maintenance, vandalism, and decrease of value. The most common of the problems of overpricing REOs is the loss of buyers' interest. Buyers and their agents realize that most of the activity on a listed home happens within the first few weeks. Homes that have been on the market a long time cause potential buyers to think that there may be something wrong with it.

At the same time, underpricing REOs has risks, although they are more long term related. The bank or lender can sell the property more quickly but this will further drive down prices of comps in the area, reducing opportunities for home owners to both sell their home at the desired price or to refinance the property when e.g. ARMs reset. The market will become further depressed and more REO will enter the market creating a vicious cycle.

When pricing REOs, the bank or lender needs to fair and honest about the price. Overpricing a house is usually the number one reason why REOs do not sell. The REO should be competitively priced with other homes in similar style, size, bedrooms, and baths; of course, taking in consideration that an REO will likely have repair cost adjustments.

Check out overviews of all Bank Owned Properties on http://allbankownedproperties.com/

REOs aren't good for the market but can help FTHBs or investors

Jona "The REO Man" from Kona (BOP) — Wed, 26 Dec 2007 22:52:27 -0600

With today's number of REOs rizing reaching record numbers, it is no surprise that they add to the crisis in the real estate business. Banks try to "dump" their properties as soon as possible as they are not in the business of owning and managing properties. Every time an REO sells, it drives down the prices in the area as they are based on comps that now include an artificially deflated price on a property the bank wants to get rid of. That's the bad news.

The good news is that prices are coming down to levels where FTHBs can afford homes again. The frenzy from the last couple of years had priced most FTHBs out of the market.

Check out overviews of all Bank Owned Properties on http://allbankownedproperties.com/