Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
17y
Like surfing, pick your spot and catch the wave. I'm sure there will be more than one spot to catch that perfect one. I'm stalking 4 areas in 2 states because I've done my homework and feel comfortable with them. Remember, "no one will ever take as good of care of your money as you will". So, do your homework and enjoy the ride, as will I!! SURFS' UP. Rich.
Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
17y
I would say, more accurately, the 3rd wave is the release of the bank moratoriums (REO will flood your market again), 4th wave for those hit by recession is probably another 3-4 months away. Either way, get your $$ ready to jump on it!! :-)
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
I woudl say that many of these prime borrowers are going into foreclosure and walking away, not maily because they lost their jobs or income, but that their hom values are so upside down form their mortgages, it makes better sense to them to just walk.
In addition, I don't believe this to be the thrid wave either. The thrid wave is and will be the REO's finally allowed to be released into the market place due to the new chnages in marked to market (an accounting practice).
Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
17y
Originally posted by nationwidepi:
I woudl say that many of these prime borrowers are going into foreclosure and walking away, not maily because they lost their jobs or income, but that their hom values are so upside down form their mortgages, it makes better sense to them to just walk.
In addition, I don't believe this to be the thrid wave either. The thrid wave is and will be the REO's finally allowed to be released into the market place due to the new chnages in marked to market (an accounting practice).
What I find interesting is that, at least locally, people think things are getting much better. "inventory is down and prices are creeping up, we must be out of the worst of it", etc. Little do they know, there are millions of REOs just being held behind the dam, waiting to be released. When the market is flooded again with REO, it will wash away their thin, frail hope that we are out of this unfortunately (even in Denver, which is slated to rise early out of the recession, etc). A good for us, bad for them mentality I have.
Residential Real Estate Broker · Payson, AZ · Member since 2009 · 3k+ posts · 1k+ votes
17y
I agree with Will about REO's becoming the next wave. I would hope that the banks holding all these REO's will "strategically release them" so not to dump on prices again.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
I am sure that the banks will do what is best for them and the CEO's and not for us or the economy, or the housing market! They can give two s*^@s about us.
Developer · Los Angeles, CA · Member since 2009 · 77 posts · 8 votes
17y
Thanks for the find. I was just telling pops today that there was a big mis-conception about the rising home prices this past April, due mainly to the first time home-buyer incentives from Uncle Barack. A lot of people have high hopes that we're back on the up and up but I've guarded the same sentiments and have opposed the opinion. The vail is certainly coming off isn't it.
Real Estate Investor · ten mile, TN · Member since 2009 · 1k+ posts · 374 votes
17y
As these REO's become your areas "comps" that will by necessity of averages lower the home prices!!!!!!!!
As those home prices continue to fall and become more "affordable" to the general public, there will be more pressure on the banks to fund those homes thus driving up the interest rates by the sheer laws of supply vs demand.
Therefore it can be said that we can see the light at the end of the tunnel, but when that light first becomes visible you still usually have a long way to crawl to get out into the open.
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
17y
This is fascinating. I've been seeing a tsunami factor in my market (where the water level goes down before the wave comes in) and knew something big was coming in. Very encouraging news for a buy/holder.
Real Estate Investor · ten mile, TN · Member since 2009 · 1k+ posts · 374 votes
17y
That tsunami factor (or the wave that comes in) will destroy anything that is not built upon a solid foundation. But the rocks and hills that are covered remain stable (they do get a good cleaning and sometimes get covered up) but they do not collapse like the structures built upon the sand the is easily moved by the wave.
Therefore knowing your market and watching the trends like your waterfront condo now being a mile inland from the water receeding is always the best advice. Sometimes those of us that know what we are doing forget these little things that have the ability to undermine us.
Knowing your market not only helps out the buy/holder but tells them where to buy/hold at different economic times.
Having riverfront property with the great mountain view might not be the best place to be when you hear the rumblings of that mountain volcano from which your river starts.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
17y
This isn't the first time I've heard of a huge wad of REOs being held by the banks. Anyone have some direct evidence this is the case?
I'll add one piece of ancedotal evidence. The listing agent at a closing last week mostly did REOs She said they currently had only 12 listings, and had had as many as 42 in the past. Just looked at another agent's web site who also concentrates on REOs, and his list is also much smaller than its been in the past.
Real Estate Coach · Highland, IN · Member since 2009 · 151 posts · 77 votes
17y
Jon
On tuesday I had breakfast at my favorite mom and pop place, just doen the street form my office. 2,99 bacon eggs and toast... cant beat it!
One of the other reasons I go there is to network. The president of my bank (his name is Tony as well) pops in as well as some other folks in the community.
I use National City, which was just gobbled up by PNC with Tarp money...
Tony came in Tuesday, and we sat together. The thing about these meetings is that they are just two guys having coffee... He said something that stuck me as odd. He said he doesnt understand the new bosses. They are holding the better houses to wait for the market to come around... Yet the market cant "come around" until the money is loosened up a bit and put on the street.
Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
17y
Originally posted by Jon Holdman:
This isn't the first time I've heard of a huge wad of REOs being held by the banks. Anyone have some direct evidence this is the case?
I'll add one piece of ancedotal evidence. The listing agent at a closing last week mostly did REOs She said they currently had only 12 listings, and had had as many as 42 in the past. Just looked at another agent's web site who also concentrates on REOs, and his list is also much smaller than its been in the past.
I can vouch for this, I work on an REO team (top 3 in the state), this time last year we had 120 listings, now down to 30 or so. We work with 35 banks, and most of them are talking about a large 'wave' coming through soon, after the moratorium was over. Another servicer was talking about 9000 properties that were going to need assignment within the next 3 weeks (more than just local denver of course, but shows there is alot of property 'on the other side').
That and the county auctions (Denver county) went from 15-30 per week up to 2-300 a few weeks ago, back down to 75 or so, but thats alot more than 15-30. Its coming!
Real Estate Investor · Mission Viejo, CA · Member since 2009 · 129 posts · 5 votes
17y
Hey guys I am somewhat of a newbie in the investment world. When you say that there are different levels of waves of foreclosures, how many have we had and how many more are we expecting.
Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
17y
Originally posted by Nancy Dito:
Hey guys I am somewhat of a newbie in the investment world. When you say that there are different levels of waves of foreclosures, how many have we had and how many more are we expecting.
Nancy Dito
Nancy,
1st wave - speculators and D paper subprime borrowers
2nd wave - subprime, ARM resets, builders
[b]
3rd wave - properties held back during the 4 month moratorium now released
4th wave - those hit by the recession, prime borrowers, unemployment, etc etc.
Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
17y
Originally posted by Jon Holdman:
When is this moratorium supposed to end?
Was supposed to be the end of April, most banks extended for another 45 days, and extended again at the end of May. Between us and the other REO players, the idea is end of July/August we should be seeing more inventory pop up.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
Originally posted by Jon Holdman:
When is this moratorium supposed to end?
To my understanding, once the marked to market accounting practices are changed the banks will be allowed to sell of a distressed asset at a discount without that transaction adversely affecting everything else on their balance sheet, but only that one asset. Grapevine is saying by end of Summer.
The first wave was the subprime loans all defaulting casuing a massive amount of foreclosures as these folks had NO means to make good on their loans.
The second wave was the arm/option arm loans which all reset casuing homeowners and investors loan payments to skyrocket.
Now we will see the 3rd wave and that will be a combination of howmeonwers walking away simply because they are so far upside down with no end in sight along with the lenders finally releasing a large amount of their REO's into the market place.
Real Estate Investor · Mission Viejo, CA · Member since 2009 · 129 posts · 5 votes
17y
If that is the case - then would short sales be the way to go right now. Since the banks are holding back from allowing inventory out, are they willing to deal with investors who want to short sale?
Investor · Kern county Riverside County, CA · Member since 2008 · 494 posts · 261 votes
17y
We have been talking about this inventory for months. I was sure we would have seen it by now. Some are holding off on buying because they feel they will be caught by increasing inventory and decreasing prices. Others are buying anyway and hoping to time the lull in inventory right if it holds for another 2 months. Anyone not buying because they are waiting on the next wave?
Investor · Rancho Cucamonga, CA · Member since 2008 · 1k+ posts · 684 votes
17y
We bought 14-15 properties between October to March (mostly flips, with a couple wholesaled for cash). Two are left under repairs and we are starting to look for some more, but I was hoping this second wave would hit sooner.
From the big REO Players I've talk too:
One had 452 listings either in eviction, active listing or pending listings. They have under 50 right now. The agent said her BPO requests has gone from under 10 a week, to getting 26 in one day though.
Three or four of the medium players used to have 30-40 active listings with 10 new ones a week, they are down to 4-5 each. Inventory seems to be trickling in for them too.
Judging by the pent up demand and the stronger comps we are going to see, I speculate that unless TONS of inventory hits the market all at once things will stay tight a little bit longer at least in Southern California. But come winter, it will be fully buying season.
What really shocks me, even the JUNK JUNK in the market has multiple offers WAY over list price.
Definitely not all areas are equal. Some areas have bleed a ton of inventory and prices really dropped, while others areas are just starting too see bigger drops.
We are being extremely cheap and missing everything right now, so we aren't buying unless it's really the right price.
General Contractor · Warrenton, VA · Member since 2008 · 72 posts · 10 votes
17y
I have seen 3 friends walk out of houses due to being "backwards" on them... And they could afford them! At this point it was merely a business decision.
One example 625K owed on a now 350K house - yuppieville on golf course house perfectly maintained. Would you keep paying or take the credit ding? I vote for credit ding on that spread myself.
Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
17y
Originally posted by Adrian Pillow:
I have seen 3 friends walk out of houses due to being "backwards" on them... And they could afford them! At this point it was merely a business decision.
One example 625K owed on a now 350K house - yuppieville on golf course house perfectly maintained. Would you keep paying or take the credit ding? I vote for credit ding on that spread myself.
And these days you will take both! First wave of banks coming after homeowners is coming. I did short sales for years with no word of banks coming after the homeowner, now I'm hearing it more and more. A clients house went to foreclosure, they are now after him for the difference of $30k, also BMW financial is after him for the $12k difference when they repo'ed his car. I think they are sick of taking the losses and are trying to get some of it back through collections.