Even some of the nicer REO properties are marketed poorly. Often the listings contain only one photograph, and it’s blurry.

“There are several nice foreclosures in my target area (Mukilteo) that have not sold while comparable conventional sales of similar houses have. Even though the Foreclosures are listed way less.

Again, a lot of that is condition of the property. Normal sellers have learned that they need to clean up and fix up prior to going on the market. Banks largely have not learned that. Often the properties still have junk lying around throughout the house and grounds.

But I think you’re right about the buyers simply not wanting foreclosure property. When looking at the stuff it’s sort of depressing. It almost reeks of failure–especially if you’re looking at a lot of them. And the banks’ failure to have stuff hauled away only makes that worse.

RE: Kary L. Krismer @ 47 –

24-48 hours is our time from offer to either counter, acceptance or a “no”.

. I can’t imagine how a regular homeowner who has to sell can compete with a bank selling an REO right now.

That timeframe is excellent if you’re talking short sale. REO it’s good.

As to how to compete, typically better condition, and also less concerns over the contract. Most the bank contracts I’ve seen haven’t been as bad (one-sided) as what you’d expect, but I saw one where it was just a horrible piece of junk, apparently drafted by several bank employees over many years. It would probably cost a buyer $2,000 in attorney fees to respond to the bank’s documents.

For the right buyer, REO is the way to go, especially if they have money to re-carpet and re-paint (and especially if they’re first time buyers and that money will eventually be repaid by the government).

consumers are weird, they are not investors. Buying a REO is a lot different than buying a conventional sale. If something is wrong with the house they wont fix it and often times wont negotiate the price (with you they may lower it later.) Also to some there is a stigma attached to a foreclosure. I means that the house is a failure, somewhat like buying a used wedding ring. I know it sounds silly but many people think that way.

There are several nice foreclosures in my target area (Mukilteo) that have not sold while comparable conventional sales of similar houses have. Even though the Foreclosures are listed way less.

24-48 hours is our time from offer to either counter, acceptance or a “no”.

I read this blog and I am one of the few bankers who believes we are still headed down in the market. A known loss now is much better than a bigger loss later on.

Learn from the mistakes, accept them and don’t repeat them again.

I do know of some regional banks who are not foreclosing but still downgrading the asset. My opinion is that time has passed. Take them back, put them on the market and sell them as values are still headed downward.

My guess is this fall you will see a flood of inventory going on the market with these regional banks… this is when it will get ugly. I am seeing drops of $80-$100K from some of these banks on competiting properties. I can’t imagine how a regular homeowner who has to sell can compete with a bank selling an REO right now.

This new law only slows us down a bit.

In my opinion the banks simply want to get through this selling season. I see staggering profits for banks this year. I don’t think banks want or need to sell foreclosures or bank owned properties.

As I see it it’s the investors who are on the hook for the money and the banks are the servicers. I’ve yet to figure out the banks incentive for selling or flooding the market with distressed homes. As long as prices are stable the banks can do their refis and people will take out purchase loans. When prices begin to decline that spigot of loans will dry up.

This reluctance to follow-through with foreclosures may be why Tyler isn’t seeing the massive waves of distress sales he had been anticipating. The big question, in my mind, is just how big this “shadow” inventory (of delinquent homes which the banks refuse to foreclose on) is?

http://www.heraldtribune.com/article/20090712/ARTICLE/907121067/2055/NEWS

This looks like more bank directed legislation. A notice is not what the banks want. Banks want the right to harrass. They don’t have that. They are regulated in the harrassment techniques that they use, but have no right to harrass.

Maybe it’s the heat

Seattlelites boil at 85

Your crickets comment was exactly right. I have noticed that the discussions here have degenerated to name calling. In my opinion many commenters get lambasted for differring opinions. I’m used to it, it’s a part of the charm of the site, but if some one is lurking then makes a comment they should be given some slack.

Maybe it’s the heat and maybe it’s that the selling season is over, but you made a timely comment.

Congradulations. Kids, dogs, and the house are what make the world go around for me.

OK Kary I read as much as I could. It seems as though this new law encourages lenders to make “collection calls” like they do for credit cards.

That will fix things.

Seriously it will increase foreclosures. No one, absolutely no one has to tolerate harassment from a lender. Having a crack head call you on the phone on a lender’s behalf is reason enough to walk away.

On the street it’s called harassment, and extortion by threat of harassment. Add that to swindle by device and I think you have a criminal conspiracy.

The more I read about state and federal government making it tougher to foreclose, the more po-ed I get. I should have bought a mansion (hell, why not 2 or 3) and filled it with plasmas on every wall, expensive furniture, clothes. My family should have taken a vacation every month with the equity.

The part I liked about the governor’s proposal, which the more I think about it is different than what passed, is it seemingly required banks to respond better to short sale situations. I don’t have a problem with that at all–I though it clever.

But I would tend to agree about much of the rest of this new state law. Forcing the bank to call the debtor just seems extreme. Simply require certain material be mailed. There’s no reason that shouldn’t be sufficient.

No more smart comments from me, or at least I will try.

We haven’t read any yet, so this probably won’t be much of a problem.

Maybe my *crickets* comments were a little on the a** side.

Thanks for the well wishes from those, Tim even though I can be snide and an a** with my comments, that was pretty nice of you to step up with the congratulations.

No more smart comments from me, or at least I will try.

By Magnolia44 @ 15:

I didn’t mention that baby Mags has joined the world as our first. Its been a few months but what a whirl wind and added pressure, but a true blessing all in one.

Congrats!

Oooooh, sorry. The correct response would have been:
“*Crickets*”

Sometimes I am tempted to start shopping for a home now, mostly because I wonder if a lot of these home built in the past few years have fallen below replacement cost already?

Replacement cost is only relevant if building a particular home in a particular area still makes sense. Some of these 10,000 sq ft homes on the exurban fringe would never make sense to build today, regardless of what the replacement cost is. Likewise with homes in really run down areas. Replacement cost doesn’t factor in to whether someone would actually want to live there.

I think that pretty much nails it. After around July 26th, it will be more cumbersome for lenders to non judicially foreclose. They want to get in under the wire, hence the vastly increased numbers for NTS.
Without this change in law, NTS numbers might still be up, but not by nearly as many.

Congrats on baby Mags. Life changing as you can’t even imagine.

I also heard about banks sitting on properties not to flood the market and put even more pressure on the properties they already have out.

Shame on you for overpopulating the world like that! :) Congrats, man. What a blessing. That makes all this other stuff seem like a bunch of fluff.

Pay particular attention to Section 2. It will be obvious why they want to beat this going into effect.

This is very similar to some legislation that the Governor proposed. I thought it never passed, but apparently something parallel did.

HI RAY

IMO the foreclosure dam has been building up, due to early year government and bank practices to delay implementation, to work out possible refinancing and short sale options. The delays were apparently a moot point.

Another fly in the ointment; they say household incomes are rising, but they won’t tell us how much per household population is rising too. IMO, there are significantly more incomes living in a household today, because there’s more people living in each household lot/unit today….it was on KING TV a couple days ago about many $425/mo rooms packed on one tiny city lot building [140 sf rooms each]…where do they park and the neighbors are horrified too?

http://www.seatoskyrentals.com/site/Overview/PropertyID__21118/748/default.aspx

All this packing together just adds to the foreclosure fire. And if you’re looking for more fire gas population as the answer, wellllllll…..that would only work if we drastically plummet home prices as wages plummet with more competition in a dwindling job base [Obama says part of the lost jobs aren't coming back either]. More foreclosures then too.

Don’t look for the federal government to print money out the problem soon either, that causes inflation and mortgage rates to rise [can't have that]….we’re between a rock and the hard place IMO….

In reality many lenders do not file this notice.

Seriously, I’m not even sure they do it half the time.

I think the new law kicks in about July 26th or so. We’ll see what the numbers are for August.

Can we read this as that the whole government sponsored refi spectacle is not very tempting when you are under water or do not apply to our several hundred thousands dollar homes bought with zero down i/o/teaser loans…

I didn’t mention that baby Mags has joined the world as our first. Its been a few months but what a whirl wind and added pressure, but a true blessing all in one.

Congrats!

I know people in banking in CA who talk of people with million dollar home portfolios being given 2% or so rates for 5 years to prevent them from walking, there are other types of mods occuring. These are people who made money speculating, and the banks in some cases are doing whatever they can.

Tough for us average joes, who pay the bills. We will see if Ray Pepper’s theory holds true but at this rate it is going to take a while for that desperation to kick in. Markets are pulling the wool over everyone, for now.

Anyway still employed, for now and business as usual. All projects and any large purchases in my household are suspended until 2010 review, that makes the wife laugh but its true.

I didn’t mention that baby Mags has joined the world as our first. Its been a few months but what a whirl wind and added pressure, but a true blessing all in one.

Good luck to all of us in these times that’s for sure.

GUARANTEED MY FRIEND!

Last weekend I drove through a new housing development in a small town in SW washington to see how far the prices had come down. I remember 2 years ago looking in disbelief at the prices tags of 450-650k on homes in a small town with no jobs and a 35 minute commute to Portland, which is where most of them work.

Two years later, 1/15 houses (my rough count) are for sale for about 60-70% of the original price, and another 1/15 appear to be abandoned (no cars, vegetation all dead), but no for sale sign at all.

Sometimes I am tempted to start shopping for a home now, mostly because I wonder if a lot of these home built in the past few years have fallen below replacement cost already?

Magnolia44 commented the other day about how there isn’t much “new” news here. I think the real interesting story to come out of this is what a sustainable real estate model will look like going forward.

I can also see some sort of federal program starting for people that have ruined credit from walking away thus making it easy for them to get back in the game.

Well, let me think here………..hmmm….Could it be COMMON SENSE opened the flood gates?

People will not stay in these upside down homes. Forget Loan Mod.. BRING on the Cram Down or this will spike higher and higher…

I will say it again……….People are NOT stupid. Short sales will continue to spike higher and higher because our mobile society dictates that we must move. At the first sign of a job change, divorce, illness, or even simple life stresses people will seek the route that will be the easiest.

Homeowners now have something they can blame this decision on ** Greenspan Put, 911, Mortage fraud in lending, etc. The decision to foreclose has become socially acceptable and that will lead to numbers of filings that will continue to astound the masses.

People are asking “Why” they should stay in their home and this is TOXIC!

They are all coming back! Not a question of if……………….just when……..