bubbleinfo.com

This one may not be here for long:

This sounded like a big move:

Eric Friedman is leaving his post as senior vice president of default servicing for OneWest Bank, formerly IndyMac, and will become president of PREO, an online marketplace for REO and short sales.  Friedman, who held leadership roles with Fannie Mae and Countrywide, told REO Insider that his last day at OneWest is Aug. 13, and a search for replacement has begun. He has spent 20 years in the mortgage banking industry.

“PREO brings lenders, Realtors, homeowners and buyers together to turn distressed property back into family homes,” Friedman said.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Is PREO just another website that combines foreclosure activity with MLS listings?

No, none of the properties checked were listed for sale, but all were on foreclosureradar.com’s NOD or NOT lists.  Most of them have IndyMac loans on them, and their bid prices are different than the amount owed – and usually well under!  It sounded like they have partnered with the lenders to offer these properties to the public, but not sure if it’s a glorified short-sale, or an actual open bidding process before, during, or after the trustee sale.

The website also mentions that it ”encourages defaulting borrowers to allow an inspection and interior photographs in exchange for the promise to relocate within 30 days after a bid is accepted.”

This could be the wave of the future – a website designed and run by insiders to liquidate properties directly to the public.  If the opening-bid amounts are legit, and buyers can get a peek inside the house prior to bidding, it could take off. 

They are realtor-friendly too, put my name down when registering:

www.preo.us.com

When you see things changing behind the scenes, you can’t help but think that it might be worth waiting a bit longer to see what develops – will there be bigger, better REOs later?

Things didn’t quite turn out for the builder of that last RSF estate.

Here are the others they built – all four pictured here were foreclosed:

http://www.kachay.com/luxury_custom_homes/for_sale.htm

Still trying to figure out the goalpost-thingy!

Let’s keep the videos shorter - the first two seen in this Carlsbad tour were foreclosed in the last two weeks, but what will become of the remaining new homes/lots on the last street has yet to be determined:

There has only been one house in the Covenant close under $1,000,000 so far, the 1,862sf one on 3.16 acres at 6427 Paseo Delicias:

http://www.sdlookup.com/MLS-090036222-6427_Paseo_Delicias_Rancho_Santa_Fe_CA_92067

It had listed for $1,320,000 in June, but had to lower to $999,800 before it sold for full price on September 30th.  Will there be more?

This will be a good test:

Sean and the folks at Foreclosureradar.com are very gracious in providing their data, though I don’t like this – fewer trustee sales, and more cancellations.

If the trend continues, we’ll have fewer REO listings, which are typically well-priced and vacant, and instead have more short-sales and loan modifications:

The bulk of the defaulting mortgages are from refinancings, which are full-recourse.  Are the lenders/servicers gearing up for The Big Collection?

Maybe not, and perhaps the opposite.  They could be anticipating HAFA, the latest foreclosure-avoidance device that encourages lenders and servicers to approve short sales, and deeds-in-lieu of foreclosure.  HAFA begins April 5th.

HAFA directs the servicers to pre-approve the short sale, prior to listing the home for sale. 

Once approved, the homeowner gets four months to sell the house, stalling any foreclosure proceedings, and then gets $1,500 for moving expenses.  It also looks like the homeowner get released from all liability too. 

Here are more details on HAFA, from Inside Mortgage Finance:

Read the rest of this entry »

More auction-list and REO properties; these are in Del Mar and Leucadia, west of the I-5 freeway. But first, some short-sale advice for listing agents:

hat tip to the Leucadia Blog for sending over Suzy’s story, plus they mentioned the Encinitas Extreme Home Makeover house in foreclosure too:

http://www.theleucadiablog.com/2009/12/encinitas-monster-house-and-extreme.html

*************************************************

We’ve been waiting patiently for the lender to list Suzy Brown’s old house for sale – remember the 16,330 square footer in Olivenhain? 

She had purchased it from Barry Axelrod for $850,000 in 2003, and took out a loan for $4.55 million in 2006.  You know the story, the bank foreclosed and found that ’somebody’ had stripped the house.

She was in court yesterday, here’s the story from the nctimes.com:

The former owner of an Olivenhain mansion who is accused of stealing $1 million worth of fixtures from the bank-foreclosed home repeatedly refused to identify herself at her arraignment Tuesday, prompting a Vista judge to handcuff her in the middle of the proceedings and finally order her to jail.

Suzy Brown, 45, eventually pleaded not guilty to one count of grand theft and one count of felony vandalism, but not until the hearing had been postponed several times because of the unusual actions of the short-haired woman in a pantsuit who, to the amusement of many in the courtroom, wouldn’t admit she was the defendant.

It is not clear why Brown would not acknowledge her identity —- which Judge Marshall Hockett eventually confirmed through a copy of her Department of Motor Vehicles photo that the court requested —- but Brown apparently contested the legality of the complaint against her issued by the district attorney’s office, according to her attorney.

“Ms. Brown claims she has not seen what she calls a ‘genuine charging document,’” said public defender William Matthews, who stepped in to represent Brown after Hockett declined Brown’s request to represent herself.

From the start of the afternoon hearing, Brown would not say who she was.

She said she had no identification with her.

“Are you or are you not Suzanne Meredith Brown?” Hockett asked, getting fed up. “… You’re playing games with the court.”

“I’m genuinely not playing games,” Brown said with a deferential, somewhat pleading tone.

Read the rest of this entry »

In the previous post, we saw that second mortgage holder Bank of America was willing to take nothing now, and allow the first lender to foreclose – rather than accept $10,000.  Let’s examine the possible reasons why this happened.

1.  Banks are stupid – a crass generalization that deserves more depth. 

You could speculate that banks/servicers are making faulty policy decisions, but usually where I see ’stupid’ decisions are from those clerks on the front lines – people who are buried with files and aren’t able to make quick decisions accurately.  Some are buried with files and can handle it, others can’t, and if this B of A decision was a mistake, oh well, it’ll probably be absorbed.  B of A was the actual lender, not just servicer – on the tax rolls they were the bank that funded the loan, and was the decision-maker, according to the LA.

2.  Banks are backstopped by U.S. Government

You could imagine a few conspiracy theories here - that B of A might have some sort of incentive to lose money, but because will have to wait for the book/movie to expose it, we’ll be a little short on specifics today.  Let’s add, this wasn’t a Countrywide deal, Bank of America was the lender of record in November, 2007 when this $100,000 second mortgage was funded on top of a $900,000 first mortgage that Empire Mortgage Co. had funded in March 2006 (and likely sold off by now?). 

3.  B of A has recourse, and will pursue borrower.

Irene mentioned in the previous comments that lenders will have recourse for the duration, and I don’t see them waiving it for short sales – especially on seconds.  Let’s be clear about one critical component – there are no reminders to borrowers coming from the realtors about future recourse.  NAR, CAR and the local realtor boards have done very little to instruct realtors about the possible future liability of recourse loans.  As a result, everyone is just pushing to close a deal, and not many folks are demanding that the lenders waive their recourse.  I appreciate any views from the attorneys here, and thanks CA Law for bringing it up.

4.  Banks are having a change of heart about their “gentleman’s agreement”.

Rob Dawg mentioned it early on that the big lenders/servicers will likely play nice when it comes to settling these disputes between first and second lenders, because on the next deal the shoe will be on the other foot.  Most cases over the last few months have had the first mortgage holder paying the second $5,000 to $10,000 to go away nicely, and this is why the listing agent was mad – it didn’t happen in this case.

Possibility #4 is one we will be following closely, because I don’t expect that a major lender is going to make a statement on CNBC that they are waging all-out war in their race to the exits.  It will only be seen by examining individual cases and stringing together a series of events to learn what the lenders/servicers are thinking. 

I’m pretty sure about this – they will be firing all their guns at once in 2010, and it may not be that obvious to the casual observers.  We’re expecting more NODs to make it to the auction list, more trustee sales executed instead of postponed, and the REO listings to increase slow but steady, all while the powers-that-be are frantically pushing loan mod programs that may look and sound good, but aren’t resolving anything.