Recently I have been getting more and more questions about REO (real estate owned) properties and HUDs. REO are Properties owned by the bank on a conventional loan, where as a HUD is an FHA or VA loan that went belly up.
Working with individuals from all over the nation who find me on the web, a huge allure of Central Florida has been Foreclosures and instant equity. To many investors of the past, this was a huge way to make some money. Obviously a bank does not want to hold on to a property. When a Bank holds a property they are responsible for maintaining it, taxes, and any utilities that might arise to get it sold. Not to mention the bank is responsible for the mortgage that comes from not having it sold or not having someone else paying the financed mortgage. I see why people someone would be drawn to these types of listings.
Why aren't there more foreclosures?! We know that many people were hurt in the past few years. Many people bought above their means. Some bought with an ARM or adjustable rate mortgage that has gone sky high. Since I currently reside in Clermont Florida let's use her as an example. Right now in Clermont Florida there are 10 foreclosures active. Many thought it would be more. What is more interesting is that the Listings by the bank are still Fair Market Value. We don't see any 1 Million dollar homes up there for 400 thousand. The reason being... the bank acts as the seller. Just like you or I they will do everything they can to make sure they get every little piece of the pie.
Ok, so why aren't there more REOs and HUDs. Well the banks got smart! They basically have a few options for homeowners who face the possibility of foreclosure. They send in me and people like me to help. LMCs (Loss Mitigation Consultants) have been contacting these people delinquent on their loans to try and help them. Most if not all who allow us to help can be. Working with the banks we approach the home with basically 3 options. We can work with the bank and get you current again, we can work with the bank and modify some of your loan contingencies, or we can work with the bank and sell your home at fair market value.
What happens if the home is only worth 100,000 in today's market, but the borrower owes 110,000? If we can only sell it for 100,000, and along with closing costs would only net 90,000; that is a 20k difference. So what do we do? The bank forgives the difference to the borrower. The bank takes a loss, and the borrower owes $0. This is all referred to as a short sale, and is more and more prevalent nationwide. The lenders that I work for se no reason to foreclose on a property, and first and foremost want to help the borrower stay in the home.
Now back to the investors. You want a deal! These homes are listed at Fair Market Value. You see 3rd party approval, pre-foreclosure, or short sale in the Public Remarks feel free to put in an offer. If you are looking for a pre-foreclosures in Central Florida please give me a call to set up a meeting.