“For every borrower who avoided foreclosure through HAMP last year, another 10 families lost their homes,” the panel said of the administration’s Home Affordable Modification Program.
“It now seems clear that Treasury’s programs, even when they are fully operational, will not reach the overwhelming majority of homeowners in trouble.”Congressional Oversight Panel report of April 14, 2010
And I bet you look at this as bad news…how wrong you are!
While it is unfortunate that the government can only seem to help 10% of those who are in foreclosure, it indicates TREMENDOUS opportunity for profit. Let’s not be ashamed. The reason we are real estate investors is because we want to make money. If we wanted to be social workers we could work for the United Way or the Obama Administration.
Well as cold and callous as that may sound, it is stated to remind us of the business that we have chosen. I should have made this a video because I do a mean Hiram Roth…but I digress…
You see some will read this and send the usual hate filled email or leave the expected vitriol filled comment but I’m not talking to them. I’m talking to you. Mr. or Ms. Capitalist. Here I come with that quote again…
“The best time to buy is when blood is running through the streets”. Rockefeller’s famous quote is becoming more and more revealing every day. Now with today’s news out of Washington saying that government programs are failing miserably it underscores the opportunity that exists for us as real estate investors.
Here’s a staggering bit of factual data…the number of mortgages that have not been paid in over 120 days has DOUBLED in the last year …and they aren’t even in the foreclosure pipeline yet! Cha Ching!
[flv:http://www.realestateradiousa.com/videos/whitney.flv 590 332]
Point blank, the Obama administration’s plans to slow the tsunami of foreclosures is failing faster than a New Orleans levy in a hurricane. The only difference here is there’s a lot more than 5 days to get out of the way of this one yet so many are walking around with their heads in their hands.
After seeing today’s report does anyone really think that HAFA stands a chance? C’mon, let’s be real here. We are no longer in a rescue mission. We are in a recovery operation. The only thing that is going to right this ship is people owning up to the fact that we are in the biggest liquidation phase in our history.
Why not just raise the flag and say it..EVERYTHING MUST GO …NO REASONABLE OFFER REFUSED! Well one reason that can’t happen is the million or so wandering souls with little blue “R”‘s on their lapels. You see the very people who are entrusted with said liquidation don’t want to do it.
So before this post turns into a rant against Realtors, I’ll just tell you what we’re doing and as real estate investors what you should do.
1. Begin your marketing programs in earnest: In your communities you will probably find that 70% or more of the homes actually in foreclosure are not listed by a Realtor. That’s your Field of Dreams! There’s your gold mine! We’re sending out letters by the hundreds to homeowners in foreclosure who ARE listed AND we’re sending out letter to those who aren’t listed. You’ll find that with just a few hundred letters you will have enough deals for a few months. (hint…work the junker market in your areas and you’ll have virtually no competitors)
2. There are some good Realtors out there:Do whatever you need to to find a competent, aggressive and hungry Realtor to work with. Trust me they are out there. You may have to make a ton of calls to find one but when you do, you have found Mother’s milk! Ask around, go to investor meetings, check Facebook and Twitter..they are out there. Once you find them you can enlist their help in doing some research and finding out a LOT of information..I won’t go into Realtor usage strategy here..but suffice it to say a good Realtor is the cat’s meow!
3. Get your cash buyer’s lined up: When the homeowners start calling you need to be prepared to flip some deals for some cash. Yes, you may give up a good portion of profits until you have your legs under you but it’s well worth having people to flip to. (Man I hate that word…)
4. Learn how to negotiate:No I don’t mean shipping your deals to some lame title agent or attorney who is just going to ask the bank “what will they take?” No I mean either learning how to truly negotiate away liens and beating down the banks for the best possible deal or keeping a pitbull chained under the porch that you can unleash when you get a deal that you need heavily discounted. Yes, there are some good third party negotiators out there but you have to find them and make sure that you are working from the same perspective and with the same goal in mind…making YOU the most amount of money possible.
5. Find the vacancies: The real gold is in those homeowners who have tossed in the towel. More and more people are simply walking away. They’ve had it and they are done waiting. There won’t be widespread principle reductions, most Realtors don’t have a clue as to how to get these short sale deals done and the government programs have failed. These homeowners are now seeing the light and just moving on.
In regards to principal reductions, at a Congressional hearing on Tuesday, lawmakers grilled bank executives about their efforts to modify second liens and to reduce principal. Officials from Bank of America, Citigroup, JPMorgan Chase and Wells Fargo told representatives that they support such initiatives, but on a limited scale.
“There are certainly individual cases or even segments of borrowers where principal reduction may be appropriate,” said David Lowman, chief executive officer for home lending at JPMorgan Chase. But “broad-based principal reductions could result in decreased access to credit and higher costs for consumers, because lenders will price for principal forgiveness risk.”
So as you can see, you have a great deal of opportunity out there that is yours for the taking…go getcha some!
10 Foreclosures For Every Home Saved- CNN Money – NEW YORK (CNNMoney.com) — The Obama administration’s mortgage-modification program is not keeping pace with the deluge of foreclosures hitting the market, a government watchdog found.
Mortgage Modification Efforts Still Falling Short Meanwhile, the government’s program to modify troubled mortgages, known as HAMP, took its lumps Wednesday from the Congressional Oversight Panel. …
Gov’t Panel: President’s Mortgage Program Not Working The report released Wednesday by the Congressional Oversight Panel concluded the program will likely help only 1 million homeowners, falling short of the …
Failures up in modified mortgages The program received another bad review on Wednesday with the release of a report from the Congressional Oversight Panel. The Treasury’s stated goal is for …
Foreclosures rise in spite of aid program’s efforts … and most homeowners in financial trouble will never receive help, according to a report this week by a congressional oversight panel. …
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