In the video you’ll learn how Robb Made BPO’s a million dollar opportunity for himself. Really great stuff. The neat thing is that Robb didn’t even have the money to buy the REO kit and had to scrounge up the cash to get it. And to this day he still calls me and thanks me getting him in the know.

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Bank of America Allocates $10.7B to Florida to Help Stem Foreclosures

Bank of America has decided to give Florida a sizable chunk of change in an effort to relieve its massive foreclosures. The amount of $10.7 billion represents 6.4% of Bank of America’s total amount loaned in its distribution program. The purpose of the money is to help sustain economic development and relief programs to benefit both small businesses and consumers alike. The distribution ultimately looks to generate jobs and general morale in the midst of a housing market in ruin, and will hopefully see a drop in Florida foreclosures.

Although Florida foreclosure numbers dropped in April, REO foreclosure numbers were on the upturn. Strangely enough, REOs were down only the month before. On a state-by-state basis, Florida remains one of the top in terms of foreclosures (third place in April, fourth in March, respectively). Meanwhile, states such as California are actually dropping in rank in terms of state foreclosure property numbers (from second to fourth).

Most of the money allocated by Bank of America is going to South Florida due to the fact that the area is hitting record numbers of distressed properties within the state. $3.8 billion has been given to the area, representing about 35.5% of the total amount distributed. Within South Florida, Miami saw the largest distribution with $1.5 in an attempt to relieve Miami foreclosures. Most of South Florida’s foreclosure numbers come from condos, with state government attempting to pass legislation to aid such areas.

In short, the Bank of America cash is looking to give the state some large-scale relief, creating jobs and providing some overall recovery.

Are Foreclosures Peaking in Virginia?

While foreclosures in the United States look to be taking a positive turn, it’s a different story in areas of Virginia Peninsula. Virginia foreclosures have been on the rise, having a major economic impact on those who can’t afford to finance their homes. As the housing marking continues its downturn, the Virginia area may be one of the best places to seek a foreclosure property.

Lately there’s been much talk of Virginia foreclosure auctions with little to no attendance whatsoever. The prices for these auctioned homes are obscenely low, and despite the hook of a good deal, nobody’s biting. When nobody bids, the auctioned home goes back to the bank and assumes the status of an REO foreclosure. Such instances of ill-attended auctions are happening nationwide, with areas such as Virginia currently suffering harshly. Analysts predict that things are only going to get worth as trends show that Virginia will have to weather this storm in the coming months. As far as geography goes, Hampton, Virginia foreclosure numbers were especially high, over 100% of what they had been a year prior.

A total of 400 foreclosure actions were accounted for in May (a 50% increase since the previous year), which is surprisingly down from the previous month. Activity is likely to reach its pinnacle later within the year, perhaps sooner rather than later. It will take the market a few years before it returns back to normal, meaning that banks will have a plethora of homes to sell. This surplus of foreclosed properties spells out lower prices, ideal for those seeking a Virginia home foreclosure deal. With Virginia Peninsula foreclosure numbers reaching record highs, it may be the best place to start within the state for an REO.

Home Foreclosures Rise Sharply in First Quarter of 2010

The first three months of this year saw a record number of property foreclosures, the steepest hike in the past five years. According to RealtyTrac, home foreclosures jumped 35 percent during the year’s first quarter from one year ago, and homes facing foreclosure jumped 16 percent within the same period and 7 percent from the last quarter of 2009. This sharp rise in foreclosures is the highest in any quarter since the beginning of 2005, potentially giving rise to many more REO foreclosures and bank owned properties. In fact, one RealtyTrac senior vice president has said that we can expect to see more than 1 million repossessions and bank foreclosure properties this year.

Effect of U.S. Foreclosure Prevention Program

Thanks to the Obama administration’s $75 billion Home Affordable Refinance Program, foreclosures began going down as banks were pressured to modify home loans for borrowers facing financial hardship. This, along with the enacting of foreclosure moratoriums by some states, helped to ease the rate of government foreclosure homes, but now, that rate has surged once again. RealtyTrac reported that over 900,000 households have received a notice of foreclosure.

As part of the U.S. government’s Home Affordable Refinance Program, about 231,000 homeowners have completed loan modifications, which make up only a fraction, 21 percent, of the more than one million citizens who have begun using the program since last year. On the other hand, over 150,000 homeowners who signed up for the program dropped out as a result of failure to make payments or failure to provide necessary documentation. Only a month earlier, the number of program dropouts was 90,000. Last month, the administration expanded the foreclosure prevention program to reduce the amount of money some homeowners facing financial difficulties owe on their home loans and also to cut some unemployed homeowners some slack. Nevertheless, this expansion is not expected to completely work out for another few months.

According to RealtyTrac, the states with the highest rates of foreclosures in this year’s first quarter were Nevada, Arizona, Florida and California. Nevada had the highest rate, with one in every 33 homes being foreclosed upon, which is four times the national average.

I’ve Heard It Before, But What Is a Short Sale?

Finding oneself in the situation of being unable to keep mortgage payments current can be immensely stressful and embarrassing. However, anyone not privy to the real estate vernacular may not realize that there is an alternative to foreclosure proceedings or bankruptcy: short sales. A short sale occurs when real estate sells for an amount less than the current owner owes on the mortgage loan. When a property sells for less than its current value, the seller’s lender is accepting a discounted payoff to release the existing home mortgage.

This is very different from a foreclosure, in which a lender obtains a termination of the borrower’s equitable right of redemption by court order, or from a REO property, which is a bank owned property that has failed to sell at a foreclosure auction. Although a short sale is typically rather stressful in its own way, it is often a much more agreeable situation than bankruptcy or foreclosure. Nevertheless, as short sales result in losses for the lender, the process of selling a home short is not the easiest process in the world.

How to Go About Selling a Home Short

It is reasonable to expect a certain degree of difficulty in selling a home short, since the short sale process will result in the lender or mortgage investor potentially losing tens of thousands of dollars; many times, it will make more sense from the lender’s viewpoint to foreclose. Also, not all sellers or all properties even qualify for short sales. Consequently, in order to get the lender to approve a short sale on a property, the borrower must prove to the lender that he or she is no longer able to afford the mortgage. How is this done? The borrower must submit financial statements to the lender demonstrating his or her inability to keep up with the mortgage payments. This way, there is physical proof of financial hardship causing the borrower to resort to breaking free of his or her mortgage.

Unfortunately, aside from providing the lender with financial information, there really is no standardized short sale approval process. Approval criteria vary from lender to lender and, sometimes, within one institution. In any case, it is a good idea for any mortgager looking to sell his or her home short to consult a real estate agent with short sale experience, an accountant or other tax professional, and perhaps an attorney.

Have you been thinking about taking advantage of the increase in foreclosures in the nation and purchasing an REO property? It may sound like a good opportunity to take a problem off the bank’s hands, but before actually going through with it, you should understand exactly what an REO property is and what goes into the purchase of one.

REO stands for Real Estate Owned and refers to a bank owned property that has failed to sell at a foreclosure auction or trustee sale. The truth is most foreclosure auctions actually turn out to not draw any bidders at all. This is because the owner of the property typically owes more to the lender than the total market value of the property, and this poses a major barrier to a successful sale. This makes sense, considering that if there were enough equity in the property to cover the loan, the owner would have likely sold it and paid off the bank, avoiding the need for a foreclosure. After a property fails to sell at a foreclosure auction, its title is reclaimed by the mortgage company, and it officially becomes an REO property.

Once the financial institution takes ownership of the property, the mortgage loan ceases to exist, and the residents are usually evicted. The bank will handle any outstanding items owed by the prior borrower, such as homeowner’s association fees, and will negotiate with the IRS for removal of any tax liens against the property. They may also decide to make any necessary repairs in order to attract potential buyers.

How To Buy an REO Property

Although it takes careful consideration to ensure justification for the risk involved, investing in an REO property can be a bargain, as buyers can put their significant leverage to good use and turn a property over quickly in order to capitalize on above average returns.

The process of purchasing an REO property begins with an offer made to the financial institution by a potential buyer. The institution will review the offer and usually make a “counteroffer,” to which the buyer can respond with another offer. Needless to say, one should definitely intend to counter the counteroffer. This process will continue until the buyer and the bank have decided on the price, terms, and conditions, at which time a contract will be drawn up for the sale.

Before making an offer on an REO property, it is important to keep in mind that foreclosed properties will have experienced trouble in the past, and this trouble may include anything from damage calling for costly repairs to burdensome tax issues. A lack of maintenance in many properties will often require substantial improvements, too, and all these issues typically require a significant amount of time and money, since REO properties will normally be sold in an “as is” condition. One should also look at prices of comparable properties in the area.

After thinking it over, if you decide that it is in your best interest to invest in an REO property, be sure to have your agent contact the listing agent before making an offer. Your agent should ask the listing agent if there are any inspection reports available, if there is a particular “as is” form, how long it will take for the bank to accept an offer, and how the offer should be delivered by your agent. Once you have obtained this information, you will probably want to fax your offer to the financial institution, as there is usually no face-to-face presentation you must make to the bank in person. You may also want to consider providing the institution with a pre-qualification and/or a pre-approval letter in order to make your offer more appealing.

The most important thing to remember when looking at REO properties and foreclosures is that the key to a successful investment is keeping oneself informed. In order to take full advantage of the opportunities these properties may present and justify the risk involved with purchasing one, a potential buyer should do a substantial amount of research and carefully weigh all possible options.

REO vs. Foreclosure: REO Benefits and Limitations

The abbreviation REO (real estate owned) is commonly used to refer to a property that has been foreclosed and taken back by the mortgage lender. Contrary to popular belief, the REO and foreclosure don’t represent the same process. In fact, an REO is the byproduct of a foreclosure which has failed, and therefore the mortgage lender takes back the property to sell on their own. In regards to which is “better” to purchase, the answer is relative. Choosing between pursuing an REO property versus a foreclosure property depends greatly on one’s own preference, as both have their respective benefits.

REO properties may have a negative stigma attached to them due the fact that they failed foreclosure. This fact shouldn’t deter buyers, however. It simply shows that there was a problem with the property owner, not the property itself. There is usually nothing inherently wrong with an REO foreclosure property beyond the fact that its owner couldn’t make the proper payments. REO properties are often recommended to new homebuyers, and this is not without good reason. Purchasing an REO is generally safe and there’s no real risk for the buyer, meanwhile statistics show that REO purchases have become the most popular choice for first time homebuyers. Banks want to sell these homes as quickly as possible, leading to great deals for the potential buyer.

Generally, pursuing an REO seems like a great deal all around. Cheap prices, good rates, clean sheets, etc. The potential downside comes in the fact that actually acquiring an REO is easier said than done. There’s often multiple bidders attempting to get a good deal, and competition can be fierce. One has to figure out how to make their offer stand out over others. While the bidding and pricing process of an REO foreclosure can be a headache, it’s usually a small price to pay in relation to a potentially great deal.

The process of a foreclosure sale is different from that of an REO. Foreclosures start off with a minimum bid by the buyer. To be able to bid, the buyer must have a cashier’s check with the full amount of the bid. If the bid wins, the property is given in its current condition (“as is”). The condition of the property may vary; meanwhile there could be other financial attachments to the property at the hands of former tenants. Such problems don’t present themselves in an REO sale. Foreclosures are often sought because the prices can be very easily financed as lenders want to get rid of the property immediately. With that in mind, however, what the property owes to the bank is basically always more than what the property is worth; a foreclosure purchase often favors investors over those looking to buy a home. With all of this in mind, both types of properties have their ups and downs and only the buyer can decide what fits best in their financial plans.

Tips on How to Make an Offer on an REO Foreclosure Property

REO (real estate owned) foreclosures are often sought-after due to their shockingly low prices. The low cost of an REO property can lead to fierce competition between buyers in attempt to the snatch up a good deal. Some REO foreclosure properties can have over a dozen bidders, making it difficult for a bank to quickly sell the property. It’s common practice for a bank to simply ask the two highest bidders for their final price and take the better offer. By adhering to the following tips, you can figure out how to make your REO offer stand out among others when seeking REO properties, despite tough competition.

Know your REO

Figuring out the history of a particular REO foreclosure can be beneficial in trying to obtain it. Your buyer’s agent can help you find the bank’s purchase price, whether it be on the Trustee’s or Sheriff’s Deed. These documents should lead you in the right direction to find the purchase price, compare them to the price of what the bank is asking for. Also familiarize yourself with any sort of loans that were attached to the property. The bank will most likely accept an amount between the original mortgage and the foreclosure sale price, provided the house itself is underpriced. Take notice of comparable sales in other REO foreclosure properties in the area, comparing other properties with similar attributes to the REO that you are seeking.

Research and reevaluate

Proper research can be key to securing a foreclosure property, whether it’s research on the property itself or the person selling it. Take some time to look up the other listings of the REO agent selling the property you’re after. Figure out their history of their listings and compare their sales prices to list prices. Once you’ve determined an average percentage of what their selling in relation to list price, raise your offer accordingly.  Make sure to ask about how many offers have been made for the REO property you’re after. You can most likely ask for a price lower than list if there are none, but you’ll probably have to go above list price if there are multiple offers. Also keep in mind that banks prefer all cash offers, so make this a priority if it’s within your means.

Sweat the small stuff

Don’t disregard the smaller details. Submit a preapproval letter to your lender(s), both to your own personal lender as well as the lender who owns the property. Don’t bother the REO banks with the need to do inspections or repairs. Iron out such details after your offer is accepted, not before. Something as simple as negotiating your own inspection period (preferably shortening it) can make you seem like a truly legitimate buyer. Be willing to bargain with the bank and help share any fees or potential financial burdens if it means securing your property. Through research and negotiation combined with some personal dedication, you can secure an REO property and beat out your competition.