The next wave of foreclosures is poised to hit.
The best way to ride this wave is to become an REO agent.
The question every agent has is How Do I Get REO Listings?
Here is an article from DSNews.com.
I’ve reprinted the highligts of it below
Industry experts tell us that over 7 million homes will be sold at the courthouse steps over the next year.
Ths number – which is about 5.5 times larger than 2005’s rate of foreclosures – a “huge shadow inventory” that threatens to further erode the national housing market that had shown signs of stabilizing.
Loan modifications have delayed foreclosures while actually worsening many homeowners’ positions.
There’s going to be a flood REO’s listed for sale soon,” John Burns, a real-estate pundit based in California, told the Wall Street Journal. He thinks prices will drop at least six percent this year. Analysts at Amherst predict an 8 percent drop, while a report by Barclay’s predicted a 13 percent drop, saying the worst of the housing crash is “decidedly underway,” with increased foreclosures sucking “the strength of the recovery in all but the best of scenarios.”
One cause of the worsening problems is unintended consequences from “well-meaning efforts to keep families in their houses.” Foreclosures have been stopped by state moratoriums, as well as by banks and servicers who are using the time to find out if troubled borrowers are eligible for loan mods.
“We’re going to have a big jump in foreclosures as people go through the loan mod process but discover they can’t qualify for mods, a Bank of America Corp. spokeswoman told the Journal, adding that government pressure to stop foreclosures had reduced their foreclosure sales to “abnormally low” levels.
Evidence is mounting that even when modifications are successfully written, the chances of a borrower defaulting again, and entering the foreclosure process again is very high. That’s because even a big reduction in interest and/or principal won’t save a homeowner who’s underwater. Many of these borrowers will default later, if they stay in a negative equity position,” they added.
Banks, too, are part of the shadow inventory problem. Afraid of the added costs of taking back foreclosure properties and selling them, many banks have simply decided not to foreclose on borrowers. A report by LPS Applied Statistics indicates that banks haven’t even started the foreclosure process on 1.2 mil homes that are 90 days+ past due. In July, 217,000 mortgages that were a year behind on payments hadn’t even received an Notice Of Default– a number that’s doubled since last year.
Lenders have also lowered the opening bids on the courthouse steps. That’s letting outside investors buy some homes at a deep discount: ForeclosureRadar.com says that 19 percent of homes sold in August in California trustee sales went to investors. Thats a 500 percent increase since last year.
What this all means is that the shadow inventory will soon change the economy’s recent sunny outlook.
“The favorable seasonals will go away over the next few months, and the truth of a 7 million-unit housing overhang is likely to set in,” they said.
