2009-11-12, 21:14:35
Foreclosures - the word on the streets.
Today I inspected a foreclosure down in the Franklin Square neighborhood of Southwest Baltimore. The property was supposed to be vacant, so, imagine my surprise when after letting myself in the front door, I heard voices chattering away in that familiar Baltimore accent, somewhere in the back of the house.
"Hello!" I shouted, as I entered the empty living room, but the voices kept a-chattering away, oblivious to my intrusion.
Actually, I was not that surprised at all. I have been letting myself into foreclosures now for 10 years, all over Maryland, including in some of the hardest neighborhoods in Baltimore. You'd be amazed what kind of activity and occupants a supposedly vacant property can manifest.
I've seen it all, and a lot of what I've seen isn't pretty.
But, as I examined the front door, tatooed as it was with the orange warning stickers and the foreclosure notices, and I entered the living room empty but for a couch, a box of trash bags, a broom and dust pan, I pretty quickly figured out that the voices probably belonged to the guys they call "mortgage field services contractors" or "property perservation contractors."
These guys are the repo-men of housing. Once a house in foreclosure is vacated, the property pres guys "gain access" to the property, and then get to securing it by changing the locks, boarding up broken windows, padlocking sheds and garages. Then they set to performing a checklist of preventative maintenance and safety assurance tasks like winterizing the plumbing, removing hazardous materials (paint, chemicals, food, animal feces - and, um, humans are animals...), perhaps repairing broken stairs or handrails.
I did this work myself for 3 or 4 years in the early 2000's. It was part of my first exposure to the foreclosure niche, and it was one of the experiences that allowed me to later feel confident calling myself --- are you ready for this?
a foreclosure expert.
I am not sure that title even means anything anymore. These days, anybody who is in any way associated with the real estate business had better be something of a foreclosure expert, right?
Yeah, I guess so, but, just for the record, I am the real deal. I'll tell you why in another blog. Or drop me a line, and we'll talk foreclosures.
But what I want to talk about today:
the Word on the Streets:
So, I get to talking to the property pres boys down there in Franklin Square - talkin' about which National Servicer (the big corporations that Fannie Mae, HUD, the VA, and the big banks hire to contract out this repo-work) is alright, and which ones still suck to work for, how's the pay, what's different about doing evictions these days. You know, Repo-man shop talk.
At the end of which, one of the boys blows out a sigh and says, "Mannnn, we are so busy, but it's only gonna get worse."
I knew what he was referring to, but I asked any way - "What do you mean?"
"There's gonna be a whole $#@^-load of properties coming at us after the 1st of the year! We're gonna be slammed?"
"Where'd you hear that?" I asked, although I knew the answer to that too.
"I hear it all over the place. The servicers have been telling us to prepare ourselves - it's coming."
On the drive down, I had the same conversation with the Realtor who is listing this particular property. This guy is one of Baltimore's top REO agents (don't know what an REO is? Ask me! We'll do another blog on terms!) This guy ALONE currently has 288 active or under contract REO listings. He said essentially the same thing that I would later hear from the repo-boys: His clients, the big banks, were telling him to staff up, cause there's a whole lot more coming down the pipeline.
And I have quietly been saying this too. I went to the property in Franklin Square to do a BPO - a Broker Price Opinion. This is where the banks pay a Realtor to provide an opinion as to the value of a particular property - just like when you are getting ready to sell, so you ask a Realtor to come to your house to give you an idea of the price at which he or she would list the property.
Banks hire us to do these because -well, for the most obvious reason, because they now own these homes they have foreclosed upon, and they need to know what they can expect to sell the properties for. But they also do it for homes they don't own yet, maybe because the owner is trying to complete a short sale, or maybe just because the bank is trying to somehow maintain some kind of idea as to what its mortgage portfolio is actually worth in this post-boom - which is to say - this BUST market.
The number of BPO orders I have been getting has over the last couple of months been shooting through the roof. Hand-writing on the wall, a whisper in the wind, so to speak?
Now, if you followed my little postings on Facebook over the last couple of days about the just-released Maryland October 2009 sales figures, you know that the data for the last couple of months show that in most zipcodes in Maryland (and everywhere else I've looked up and down the east coast), housing values are still in a sharp annual decline. But looking at the numbers month-to-month, the decline seems to be leveling out; in some zipcodes, prices were even UP in October over what they were in August and September.
What does that tell us? It tells us that the First Time Home Buyer Tax Credit, the incredibly low interest rates, and the attractively low housing prices out there are drawing first time home buyers into the market. A closer look at the sales figures supports this. In all the zipcodes I examined, the lion's share of sales came in the under $200,000 mark.
It also tells us, I think, that we are not out of the woods. The next mass of foreclosures will not be defaults generated by those evil sub-prime mortgage demons we've all heard so much about. The next wave will be the result of plain ol' good ol' fashioned unemployment, which is what you get when you have the staggering economic collapse that we are living through.
But, that's the thing to remember, right? We are living through it. I am making long trips from the Mountains of Maryland into inner city Baltimore, from the DC line to the Bay Bridge just to earn a couple dollars doing these BPO's, because it's what I've got to do to keep my business afloat. It's no picnic. But we are Americans - we turn disaster into opportunity, right? For me, it has turned out that these BPO's have provided the opportunity to sharpen my claim to that dubious title -
-- foreclosure expert.
For the last year I have driven round and round the two Beltways, up and down the ribbons of highway connecting the Mountains to the Bay doing these mini-market-analyses. Which is to say, I've been out on the streets of Maryland, seeing for myself what's really going on, zipcode by zipcode.
And now that we are in the age of blogging, it's given me something to write my first blog about, right? How's THAT for finding opportunity in the midst of hardship, or, as the poster on my 4th grade classroom wall read - making lemon-aid when life has given me lemons.
Lots of lemons. Two years going on three years worth of lemons.
That's cool. Lemon-aid is much healthier than soda.
Wait - what was that? I'm writing? Really?
Have I ever told you that when I grow up I want to be a writer?
Wow.
You see - the Universe manifests, we just have to believe! Oh, and get out there and work our asses off!
~david
David Lidz, Realtor®
Advantage Realty, LLC
19918 Jefferson Blvd.
Hagerstown, MD 21742
(410) 903 - 9489 - cell
(301) 745 - 1620 - office
(301) 766 - 4520 - fax
dlidz@advantagerealtymd.com
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