Yesterday I attended the Bank of America REO/Short-Sale seminar for agents on their preferred list.
They haven’t sent me a new REO listing in about a year, so I thought I better attend, just in case it improves my chances.
They mentioned that they’ve cut 1,200 agents from the list already, and expect to trim it down another 1,000 and end up with fewer than 4,000 preferred realtors nationwide. Uh-oh.
Bank of America’s REO and Short-Sale Seminar highlights
1. Just 18 months ago, Bank of America was acquiring 16,000 properties per month through foreclosure. Today their count is 3,000 to 4,500 per month. There were a variety of reasons given for the dropoff:
- The mortgage settlements caused it.
- Loan modifications.
- They are selling off servicing rights when mortgages go 60 days late.
He admitted that there are probably a lot of people who are living for free.
2. Foreclosure volume is predicted to be FLAT over the next year or two.
3. Once foreclosed, their goal is to dispose of the property within 180 days. Last year the average was 210 days.
4. The bank’s public website that displays properties for sale will have a “coming soon” section where readers can preview new listings. (This site has never been updated frequently so don’t get your hopes up).
5. They are open to selling tenant-occupied properties to investors. Because they see so many cash offers, rather than wasting time and money on evictions, they will consider investor offers in advance that keep the occupants in the home.
6. Out of the other side of their mouth, it was stated clearly that asset managers will not respond to offers until the property has been on the MLS for five days.
7. Bank of America expects to sell or transfer 2,000,000 properties this year.
8. They solicited 15,000 defaulting homeowners last year with the pre-approved short-sale program, offering up to $30,000 in incentives. Only one of eight homeowners took them up on it.
9. They solicited 2,000 defaulting homeowners to accept a deed-for-lease program, and only eleven homeowners agreed (where the homeowner signs over ownership and leases back).
10. Their average short-sale-approval time is 43 days.
11. Fraud is found in 23% of short sales.
12. They have a pilot program underway to sell short-sales through Auction.com. The seller still gets an incentive to participate, and realtors are involved. The properties are offered with a pre-determined reserve price, but at least the auctions will take the buyer-selection process out of the listing agent’s hands.
There were no promises or even hints of increased production – but they say that they want to hurry up the process. The phrase, “think outside the box” was said at least a dozen times, but many of us were skeptical that any major chances were coming.
“11. Fraud is found in 23% of short sales.”
No surprise to JtR, I suppose.
But still – yikes!
Seems like the solution to the housing crisis has been to slow down the foreclosure process enough to keep inventory low. I guess there hoping rising prices via low inventory will discourage more people from walking away.
I have to guess most of these homes have loans owned by freddie and fannie. I guess we throw some more bailout money at them to help with the carrying costs of these homes?
No surprise, and given who is checking, there is probably more than 23%.
On the Fannie/Freddie – I’m just guessing but I think the vast majority of their troubled loans will be the old Countrywide stock, which was primarily sold on Wall Street, not Fannie/Freddie (the no-doc underwriting didn’t conform).
He said that investors own 99% of the loans foreclosed, and BofA is only the servicer (that is, only 1% of the loans are actually owned by BofA).
So if they are old countrywide loans with private investors you would think they would be losing a lot of money sitting on these loans and not collecting any payments.
Who are these private investors able to sit on these loans and not collect payments and be underwater a lot?
I was under the impression that a lot of the loans being held and not foreclosed on were held by fannie and freddie for the most part.
If you were a private investor would you let someone sit in your house for free and not pay you and not foreclose?
Who bought most of the junk originated by countrywide, packaged by wall street, and sold to gullable investors?
Comment seen at CR:
Left court this morning and the lawyer that represents B of A said they are pulling about 80 to 90% of foreclosures each month.
The lawyer also said there are an absolute ton of folks still out there who haven’t paid in years.
My paralegal’s son works with B of A in Dallas on mortgage mods. He says they continue to do almost none — and home value is a key driver. However, he says they are hiring.
I wonder how long they can hide these losses?
Who are these private investors able to sit on these loans and not collect payments and be underwater a lot?
They seem to be large institutional investors, mostly big banks, mutual funds, etc., that got sucked into the Tan Man’s lure of projected high returns on neg-am loans.
The loans were so difficult to understand that the decision-makers jumped on them to ensure their bonus – it wasn’t their money invested anyway.
BTW, Angelo is out golfing today, and was wondering if someone would have a mai-tai waiting for him at the turn?