foreclosure freeze

[skargo]

Let me preface this with the plea to keep this discussion non-political. May be a lost cause but let's give it a try.

What do you all think about BOA's 50 state foreclosure freeze? Looks like other banks might follow suit.

This is of high interest to me as part of my investment strategy is to buy REO(bank owned) properties, which in BOA's case, those sales will also be frozen.
There are still plenty of houses for sale that aren't REO's so I will still be fine, but this could impact a LOT of people, both positively and negatively.
I read somewhere the average person going through foreclosure with BOA hasn't made a payment in 18 months?!?!?!?!

http://money.cnn.com/2010/10/08/real_estate/foreclosure_halt_home_sales/

 

[gonefishie]

Re: foreclosure freeze

I hope they all do! Maybe then someone would buy my house that I'm currently renting out. I would rather get it out of my hand than being a landlord.

 

[emoney]

Re: foreclosure freeze

I think in BOA's account, anyway, they chose to temporarily halt foreclosures
because nobody was looking at them individually, just on a broad, rubber-stamp
basis. In other words, instead of noticing that "Joe & Mary Customer had
recently fallen 2 months behind because Mary had a baby and now they
have the money to get current or at least work out a plan", they were
foreclosing on them all. Of course, a lot of this had to do with the Gov't
Bailout for these Banks that made it actually more profitable for the Bank
to foreclose than to try and forge an agreement with an otherwise worthy
customer.

In a nutshell, if BOA had a Mortgage for $150,000 and the current market
value of the house at Foreclosure sale was $80,000 then the Gov't guaranteed
the difference, or at least 80% between the sale amount and the ORIGINAL
appraisal, not current market. So, if that house originally appraised for $200,00
then BOA got a check for $104,000 PLUS still owned the home which today
is worth the mentioned $80K. In essence, they ended up with $184,000
on the original $150k mortgage. It was a No-Brainer to foreclose as opposed
to working out an "arrangement" for the homeowner.

Having said all that, of course there is another whole section of society that
has "milked the system" and stayed in these homes for long stretches without
paying anything.

 

[eavega]

Re: foreclosure freeze

I hope they all do! Maybe then someone would buy my house that I'm currently renting out. I would rather get it out of my hand than being a landlord.

Amen to that. I am tired of being a long-distance landlord. Rental house in NC, and I live in GA.

 

[bruceb58]

Re: foreclosure freeze

The longer it takes to get all the bank owned properties sold, the longer the housing crisis is going to exist and the longer it will take housing prices to get to their proper level. Its unfortunate that this freeze is occurring. We have not seen the bottom on housing prices I am afraid. Although every area is different, I know that in California where I live, we have not seen bottom at all.

 

[DECK SWABBER 58]

Re: foreclosure freeze

Darn, and I was just getting ready to look for that lake front property for pennies on the dollar.

 

[treedancer]

Re: foreclosure freeze

[FONT=&quot]Let the dust settle and off to the next bubble.[/FONT]

 

[skargo]

Re: foreclosure freeze

The longer it takes to get all the bank owned properties sold, the longer the housing crisis is going to exist and the longer it will take housing prices to get to their proper level. Its unfortunate that this freeze is occurring. We have not seen the bottom on housing prices I am afraid. Although every area is different, I know that in California where I live, we have not seen bottom at all.

I agree, we are YEARS away from the bottom and any kind of recovery. In a way, it's a modern day gold rush, and I am buying as many as I can because the rents are astronomical in the areas where I invest, especially if you have program tenants.
Being a landlord isn't for everyone, but I love it. Hell, some of my friends have 50 or more units. My best friend and mentor has 90! I only have a handful at the moment, but have some more under contract.
As I said before I look for REO properties but will have to adjust my strategy if this freeze is taken on by other banks as well.

I understand there are approx 300K REO properties on the market right now, meaning they have all went through the auction process without sale, and the banks own them.
Now what will blow your mind is there is approx 800K MORE REO properties that aren't even on the market yet, so called shadow inventory! Someone has to buy them.

 

[skargo]

Re: foreclosure freeze

Darn, and I was just getting ready to look for that lake front property for pennies on the dollar.

An amazing, beautiful 10K sq/ft waterfront home on the bay with acreage recently sold at auction. It was on the tax rolls for well over 1m, and sold for $599K

My wife and I will own waterfront sooner than later, I know that for a fact.

 

[kenmyfam]

Re: foreclosure freeze

The longer it takes to get all the bank owned properties sold, the longer the housing crisis is going to exist and the longer it will take housing prices to get to their proper level. Its unfortunate that this freeze is occurring. We have not seen the bottom on housing prices I am afraid. Although every area is different, I know that in California where I live, we have not seen bottom at all.

Completely agree with this one.

 

[stic88]

Re: foreclosure freeze

Boa wouldnt work with my sis at all. wish she could just wald away from the housel

 

[tashasdaddy]

Re: foreclosure freeze

Sylvia offered Wells Fargo, deed instead of foreclosure, Wells Fargo chose Foreclosure.

 

[Brewman61]

Re: foreclosure freeze

The longer it takes to get all the bank owned properties sold, the longer the housing crisis is going to exist.......

Sums things up quite nicely, IMHO.

 

[bruceb58]

Re: foreclosure freeze

Sylvia offered Wells Fargo, deed instead of foreclosure, Wells Fargo chose Foreclosure.

Its the lender's choice especially if the loan was a refi since it is a recourse loan. In theory, the lender can go after the borrower for the difference in the selling price of the house and the loan balance. In the case of a deed in lieu of foreclosure, the bank can't go back after the borrower.

Feel bad for the people who lost their jobs and are now unable to pay their mortgages. Don't feel bad for the deadbeats that even though have the means of paying will use this freeze to live in a house as long as they can.

 

[skargo]

Re: foreclosure freeze

Its the lender's choice especially if the loan was a refi since it is a recourse loan. In theory, the lender can go after the borrower for the difference in the selling price of the house and the loan balance. In the case of a deed in lieu of foreclosure, the bank can't go back after the borrower.

Feel bad for the people who lost their jobs and are now unable to pay their mortgages. Don't feel bad for the deadbeats that even though have the means of paying will use this freeze to live in a house as long as they can.

Amen to that!

 

[WIMUSKY]

Re: foreclosure freeze

Yep, there's always a bunch of people waiting to advantage of the system....

 

[DECK SWABBER 58]

Re: foreclosure freeze

I understand there are approx 300K REO properties on the market right now, meaning they have all went through the auction process without sale, and the banks own them.
Now what will blow your mind is there is approx 800K MORE REO properties that aren't even on the market yet, so called shadow inventory! Someone has to buy them.

WOW, that is a lot of real estate that will be sold way below market value once it becomes available.

Sounds like their's a real opportunity to make some big money if your in the right area.

 

[skargo]

Re: foreclosure freeze

WOW, that is a lot of real estate that will be sold way below market value once it becomes available.

Sounds like their's a real opportunity to make some big money if your in the right area.

Exactly, it's why some call this the gold rush of our time...

 

[trendsetter240]

Re: foreclosure freeze

soo... the bank forecloses, sells the house for half it's value, recoups the difference from the government (aka. the american tax payer) and the original homeowner is left with a bad credit score.

In comes skargo, finds a niche market and exploits it. Good on you, that's what capitalism is all about. Im serious, it takes a good business sense to find and exploit these oportunities.

I do have to say though, wouldn't it be more efficient for the government to take complete ownership of the properties and rent them out themselves? A government corporation sould be formed to manage the properties, rentals and eventual sales or conversions into low income housing.

Not to say skargo doesn't have a right to make money of this but wouldn't it be a better option to return the margin to the american tax payers while providing less expensive housing options to low income americans?

Only the government has the capital needed to take hundreds of thousands of REO properties off the market and transform them into rental properties. This might help to stabilize the housing market at the same time.

 

[DECK SWABBER 58]

Re: foreclosure freeze

soo... the bank forecloses, sells the house for half it's value, recoups the difference from the government (aka. the american tax payer) and the original homeowner is left with a bad credit score.

In comes skargo, finds a niche market and exploits it. Good on you, that's what capitalism is all about. Im serious, it takes a good business sense to find and exploit these oportunities.

I do have to say though, wouldn't it be more efficient for the government to take complete ownership of the properties and rent them out themselves? A government corporation sould be formed to manage the properties, rentals and eventual sales or conversions into low income housing.

Not to say skargo doesn't have a right to make money of this but wouldn't it be a better option to return the margin to the american tax payers while providing less expensive housing options to low income americans?

Only the government has the capital needed to take hundreds of thousands of REO properties off the market and transform them into rental properties. This might help to stabilize the housing market at the same time.

Hmmm,

OP specifically said, let's try to keep this non-political.