“Wow. You are actually saying banks WANT to take back properties instead of doing an SSale, and profit more by doing so?”
They know that they WILL profit more by taking them back and selling as REOs INSTEAD of doing a short sale.
You see you’re new. Learn.
“Where are you located where 50% of your listings are REOs?”
Atlanta GA. - Which until recently had one of the highest rates of fcs. Now it’s FL. Is that where you are?
“96% of loans are performing”
Yes they are. Go the Mortgage Bankers Assoc. Site or the Real Trac Foreclosure site and see for yourself. You are getting an education now.
“but 50% of homes for sale in your area are defaulted loans that banks had to reposses?!?!”
Yes again. Go to any local mls site. About half don’t list as reos but they are. I’ve done the title research.
“Please explain how unloading some REOs cheaply would cause more foreclosures…?”
I think you misquoted me. I dispute the word some. If they unload ALL the reos cheaply then it will cause a downturn in the average market price thereby leading those owners on the fringe of fc with little equity to walk thereby leading to more fcs.
“This just makes no sense. You are basically saying they are making good money so they don’t care if they lose money. So they care enough to “make money” as you say by taking back properties at auction instead of dealing with a SS, but they don’t care enough to sell them when they actually take them back?”
They are making alot more money than they are losing. That’s why they have record profits. I’m going to tell you again. And did you read the post from the realtor saying it’s not the lenders per se but private investors who are calling the shots. And I told him/her that all I know is what I have had to deal with over the last 5 yrs. Whether its an investor/lender who cares? The result is the same.
It used to be more than five yrs ago you could do a ss. Go ahead now. I could give you alot of reasons why things have changed.
“The way you make it sound, banks actually profit from foreclosures… do you not realize most people that lose their homes are upside-down? If someone owes $100k on a home worth $85k, please explain how taking the property back and netting $60-$65k by the time you factor in the time-value of money, commissions, and fees incurred is making them money? Wouldn’t they be better off selling the home at a SS for $75k? SS’s are not designed for investors, rather retail sales, not all short sales(I’d venture to say half) are low-ball offers netting the bank $30k in the same such deal.”
I’ve used the same arguments with lenders you bring up. What about mortgage insurance? That hasn’t come up yet in your discourse. And this is one of those behind the scenes factors of life that protects the lenders from default. You are obviously in a learning mode. And I appreciate your input. All I am saying is, I’ve spent too many yrs. trying to work these deals. With and without equity. I’m done. When you can come up with money making deals that are verifiable that’s great. Otherwise it’s just talk and theory. And if you do one deal a yr is that a success? Maybe it is for you. Great.
I do rei for a living. I don’t have a job anymore. I don’t want to be a wage slave again. I did that for 25 yrs. With nothing to show after a divorce. I have to pursue deals that work for me in my market. Deals that make me money. Prefcs don’t cut it anymore for me. Every Tom and Dick investor goes after them because they think they are the path to riches. They have been hyped to the limit. Go for it. Good luck.
EH