Foreclosures

Washington State AG asks Trustees to Halt all Foreclosure Actions

The States Attorney General in Washington today held a press conference and asked all Trustee Companies to temporarily halt all pending foreclosure actions.

Must be an election year I guess.

You can view the press release from the AG here.

Why are Banks Halting Pending Foreclosure Auctions for Tens of Thousands of Home Owners?

The last week has seen a rash of the nations largest banks and lending institutions publicly announcing that they are delaying foreclosure proceedings for tens of thousands of their borrowers. It first started with an announcement by GMAC that they were suspending foreclosures in 23 states while they reviewed the legal documents filed in the cases for accuracy. Shortly there after JP Morgan Chase announced they too were following suit. Followed by the nations largest lender Bank of America a couple days later.

Why the sudden about face from these lending giants. It starts with a handful of law firms that were hired by these banks to prepare, process and file the necessary foreclosure paperwork with the courts. These law firms have recently come under fire for allegedly providing fraudulent documents and/or affidavits concerning the loans they were foreclosing on. At the heart of the issue is what entity actually holds the legal right to foreclose on these homes. Because of the way loans were packaged and bundled into mortgage backed securities and then sold like stocks on Wall Street, sometimes multiple times, it is quite often difficult to pinpoint the actual legal owner of the note or loan in question without a good bit of research. Many times banks like JP Morgan and Bank of America are only the servicing agent who is collecting the monthly payments from the borrower for the eventual end of the line investor. Rather than research the thousands of individual loan files to determine some of these answers, the law firms in question simply prepared affidavits certifying XYZ Company as the legal owner of the mortgage and they would proceed with the foreclosure process.

Recently several high level executives at these lenders have admitted that they would sign 7000-10,000 of these documents a month without reviewing them for accuracy. Now that the cat has been let out of the bag on this the banks in question have decided it would be prudent to temporarily halt these pending foreclosures to allow them time to verify the accuracy of the information.

This move by the banks will in no way stop the tidal wave of foreclosures happening around the county but will likely push back the inevitable by a couple of months while they sort things out. It is interesting to note that Wells Fargo Home Mortgage has publicly stated that they will not be postponing any of their pending foreclosures and they even took it a step further in announcing that they will no longer issue postponements for a foreclosure that has a pending sale on it. What does this mean for agents or buyers and sellers who are trying to close on a short sale transaction? If you have a short sale pending and it has been approved through Wells Fargo, make sure you close by the date on your settlement letter because there are no second chances anymore.

REIF Clients Buy 5 Properties at King County Foreclosure Auction

The Factoria foreclosure auction was the place to be on Friday (August 20th 2010) where Real Estate Investment Firm clients purchased 5 properties that were sold via auction at the trustees sale (foreclosure).  Of the five properties, two were in Seattle, two in Renton and one was in Bothell.  Pictures of the five properties are below:

The average price/value on these foreclosure auction purchases was 74 cents on the dollar!  Imagine purchasing your next home or investment property at a discount of 25% or more!

Multi-Million Dollar Kirkland Mansion Taken Over by Squatters

The Seattle Times recently wrote a story about a multi-million dollar mansion in Kirkland’s upscale West of Market neighborhood that has been taken over by squatters.  The home, currently listed for $3.3 million and owned by First Citizens Bank (through their acquisition of Venture Bank from the FDIC) recently saw a family consisting of two adults and two children move into the property and claim ownership of it entirely.  A notice has been posted on the door claiming that “all rights, interest and title in the property” has been transferred to Priority Rose Children’s Outreach of Bothell.  A two week old Charity according to the article.  Coincidentally, the charity shares the same listed phone number as  a Bothell company called NW Note elimination.  A company that “specializes” in “eliminating mortgages” through what many would call dubious practices.  When police were called in to investigate they were shown a document by the new occupant claiming ownership.   Since the police don’t often involve themselves in these type of cases, it will be up to the bank to evict the squatters through proper eviction proceedings and eventually physical removal from the property by the King County Sheriff.

You can read the entire article here.

What are your thoughts regarding this story?  How long do you think it will take the bank to evict the squatters? Post your comments below.

Foreclosure Heat Map Accross the USA

Foreclosure Heat Map

This heat map, provided by RealtyTrac, shows the hot spots for foreclosure filings in the USA for calendar year 2008.  A quick look at the data and you can easily see that there was not really any significant region that went unscathed as the housing market nosed dived.

King County Foreclosure Auction Sales Statistics

Watergate Hotel Sold Today at Foreclosure Auction

The iconic Watergate Hotel in Washington D.C., made famous during the Nixon administration and the resulting scandels was sold today at a foreclosure auction for $25 Million dollars.

Low Prices on Foreclosures Incite Bidding Wars Among Would Be Buyers

The Seattle Times just published an article this morning on the bidding wars that are erupting between potential buyers for foreclosure and bank owned properties in several areas around the country.  Most of the frenzy is taking place in the hardest hit ares for foreclosures such as Phoenix, Las Vegas, Southern California and South Florida.

Investors, flush with cash to spend are flocking to pick up newer built homes in the lower prices neighborhoods popular with first time home-buyers and those with families.    Prices on these foreclosed properties are in many cases over 50% less than their peak prices of 2006 and 2007.

With all the attention being paid to these foreclosures, many first-time home buyers in these markets are finding it hard to compete and are making offer after offer in an attemp to land their first home.

While the Seattle foreclosure market has not had the sheer numbers that other major markets have had in terms of total foreclosures and existing inventory, it is still a lucrative market for both investors and those looking for a terrific deal on their next home.  Most of the properties sold to a third party at the foreclosure auction recently have been sold in the range of 65-75 cents on the dollar of todays already discounted prices.  For investors, it is now common to see several homes available each week at the foreclosure auction that would be cash flow neutral or slightly cash flow postive with a 20% down payment from the buyer and typical financing terms for the balance.  Two years ago, that was virtually unheard of in King County.  Now is the time to strike if you are looking to pick up a great investment property or personal residence drastically under market value.

Short Video on the benefits or working with Real Estate Investment Firm on your next short sale

When your looking for the most experienced and knowledgeable short sale and distressed property consultants look no further than Real Estate Investment Firm.  To learn more, you are welcome to attend one of their free workshops on “how to buy foreclosures” held weekly at their downtown Redmond office.

REIF Investors Make Quick Profit Buying at the Foreclosure Auction

“Can we really make money in this real estate market flipping houses?”

We hear that question quite a bit around our office.  Usually it comes up on Tuesday during our weekly workshop for new clients & investors on “How to buy foreclosure auction homes, short sales and bank owned/REO’s”.

The answer is most definitely YES!  With accurate property research and due diligence combined with a keen knowledge of current market conditions and throw in a little luck for good measure you can make consistant and sizeable profits time and time again. 

Below are the details on a recent foreclosure auction purchase made by an investor working with Real Estate Investment Firm, LLC. 

Rosario Place, Renton WA

REIF foreclosure purchase

This property was purchased on March 27th 2009 at the King County Foreclosure Auctionfor $1.00 over the lenders opening bid of $364,650.00.  When this property was reviewed in our Auction Investor Meeting the night before, the REIF Auction Specialist told the group that a cash buyer could purchase and flip this property in under 90 days and make a net pre-tax profit of approximately $40,000.00.  In the end it only took 67 days from the purchase date until escrow closed on the re-sale.  When all the costs for acquisition, fix-up, holding and re-sale were calculated, the net profit to our client was $39,463.00  Below is a breakdown of those figures and a chart that shows the ROI (return on investment) for this transaction.

If we extrapolate this data out to a 12 month time-frame, it would roughly work out to an anual net income before taxes of $240,000.00.  Keep in mind as well that the investor who bought this house only spent approximately 30-40 hours of his time working on the property. 

If you would like to learn how you can help secure your financial future by investing in foreclosures and distressed real estate then I encourage you to attend one of our free foreclosure investing workshops.  They are held every Tuesday at 5:30 pm at our downtown Redmond office

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