The Return Of The Foreclosure Machine!
Sounds like a good title for a horror flick doesn’t it? However it’s a reality show!
The Wall Street Journal reported today that the major banks are revving up the big foreclosure machine again.
The brief respite wasn’t due to any change in market fundamentals or because the banks were simply being nice but rather because of an “agreement” … a moratorium if you will on pursuing foreclosures. It seems that the big banks wanted to see what the big plan Obama had for cleaning up this mess, obviously they have lost faith. They’re not alone!
- J.P. Morgan Chase & Co., Wells Fargo & Co., Fannie Mae and Freddie Mac all say they have increased foreclosure activity in recent weeks. Those companies say they have lifted internal moratoriums which temporarily halted foreclosures.
- We’ve talked to reps at GMAC mortgage who have told us to be ready for a deluge of activity in the market as they begin churning forward on the backlog of defaulted loans.
- Citigroup Inc. says it stopped all foreclosures until March 12, at the Obama administration’s request, on loans serviced for Fannie and Freddie. Since then, says a spokesman, it has reverted to our previous business-as-usual.
- Wells Fargo has also increased foreclosure actions since the expiration of its foreclosure moratorium. Both Fannie and Freddie have stepped up sales of foreclosed properties since their moratoriums ended on March 31.
- More than 2.1 million MORE homes will be lost this year because borrowers can’t meet their loan payments, up from about 1.7 million in 2008, according to Moody’s Economy.com.
Obviously all of this additional foreclosure activity will result in loads of additional inventory hitting the market and potentially causing home prices to dip yet again. Darn economic laws of supply and demand!
No, we have not hit bottom yet. Not by a longshot!
So what’s next, another round of handouts to banks? Who knows. What I will say is that this further underscores the feeling that we have been advancing that this is truly the BEST REAL ESTATE MARKET EVER!
Our Buyers are ecstatic. We are seeing banks being EXTREMELY aggressive in pricing and liquidation. We’re taking orders from across the Country and from across the pond from Buyers who aren’t at all afraid of being Capitalists.
If your interested in buying that home that you thought wasn’t affordable or if you are looking to expand your present portfolio of holdings, I can show you deals that will astound you. Each week we are featuring the Fort Lauderdale Real Estate Deal Of The Week and last week’s DOW sold in 8 hours!
Can you believe it? In this market we have homes selling in just hours. A lot of people are whining about the economy and the housing market. I’m tired of hearing it.
As we all prepare for the big rush to the post office for the annual governmental donation, how about participating in your own little “real estate tea party’ and tell yourself that you’re tired of people reaching in your pocket.
The banks need us to liquidate these non-performing assets and the abundance of wealth building opportunities is only going to grow in the coming months. Be prepared, get educated and give me a call if you’d like to exploit this opportunity for all that it’s worth!
What Mortgage Modifications Say About the Housing Market CNBC, on Tue, 16 Feb 2010 11:59:11 -0800CNBC’s Diana Olick has the latest real estate headlines. A new report shows that foreclosures are dropping in January, with CNBC’s Diana Olick. …
Tired of Bailout Nation? FOXBusiness (blog), on Fri, 05 Mar 2010 09:29:55 -0800 Forbes publisher Richard Karlgaard recently wrote a terrific column pointing out the differences in how elected officials have lead the US out of prior …
Does A Real Estate Contract Really Matter?
My good friends down at the Broward Real Estate Investors Association sent me an article that questioned whether a real estate contract is even relevant anymore. If you’re a real estate investor in the Fort Lauderdale real estate market or for that matter and market in the Country, you have to wonder if this isn’t a valid question. Read more
Notice of Interest vs. Memorandum of Interest
My buds down at the Broward Real Estate Investors Association send me a weekly newsletter and in this week’s installment, Dave Dinkel penned a real pertinent article that we wanted to share with you. Here it is.
NOI’s versus MOC’s
While this sounds like two local football teams’ “short names”, it is actually the “acronyms” or letter abbreviations for two of the most powerful documents in real state investing.
The “NOI” is a Notice of Interest or sometimes called a “Memorandum of Interest“. It is usually a one page document that stipulates that the person submitting the document for recording at the County Clerk’s Office has an “equitable interest” in the property. Most common is when an investor signs a purchase and sale contract (FAR/BAR) with a homeowner/seller and wants to show that he has an interest in the property in case someone else comes along and offers the homeowner a higher price.
This practice by investors of “up bidding” properties after they are under contract is getting more common in these markets but even happens in “regular” markets. BREIA has a so called “Wall of Shame” of investors who regularly make statements to homeowners like “Get your highest offer from those other guys and call me back, I’ll give you more money than any of them – I just need to see it in writing”. The ugly part of that statement is “in writing” because that usually means a contract has to be signed by the homeowner. This will be the same contract that he and you signed in good faith to seal your deal.
While I can’t blame the homeowner from wanting more money, what I have seen happen most often is the “black-hat investor”, who stole the deal, actually gets to the closing table and re-negotiates the price to below what you had originally offered. This is a total scam and there is at least one investor in the tri-county area that uses this tactic in almost every deal he does. How do I know, I have been on the other side of his offers and had to fight to keep my sellers.
So occasionally we have to fight for our closings and I have covered this in other “Minutes” about how to do this. The ironic part is that it is a criminal offense to “induce” someone to sign a contract when another contract is in place. The Attorney General’s Office will take these cases if you show proof and the seller cooperates – which is usually the case when the homeowner is threatened with a law suit for foreclosure.
So when we sign a contract with a seller, we almost always, record a Notice of Interest in the public record which is a lien against the property. I want to repeat this because the subtleties of this “lien” are very far reaching. This NOI now has to be “released” as a lien on the property before the title can be transferred unless there is a foreclosure action to extinguish it, or the lien holder (you) starts a foreclosure action yourself to take the property. If this sounds harsh, it is just a solution to a problem where one party to a contract won’t hold up his end of the agreed-to terms – just like a lender does to a homeowner.
The NOI does not need to be signed by the homeowner/seller so anyone can theoretically put a lien on anyone’s property. Just remember, there is a sign in the Clerk’s Office that says something to the effect that “If you enter a lien that is not valid it is a felony”, so think twice about what you are doing before you do it – don’t do it in anger or it could cost you a lot in attorney’s fees. Having said that, the courts and sometimes the recording clerk, treat the NOI like an unruly step child. They tolerate them probably for the fees, but they don’t like them much because of historical issues with the seller not knowing these liens have been filed. Even the FAR/BAR and FAR contracts specifically forbid filing a notice of interest for the contract the buyer and seller are signing. This can be immediately overcome by striking this clause or adding over-riding clause in your contract.
Now that you have filed a NOI in the public record, the next time the title to the property is transferred, the title agent will have to have a “Release of Lien” to write a title policy on the property or keep it as an “exception” in the policy. Since there is now another lien (NOI) against the property means that the title has been “clouded” and needs to be “cleared” for transfer. This is where you come in to release the lien and it usually happens when you least expect it – just before you were planning on closing yourself! Sometimes the homeowner will call when he gets a copy of it from the Clerk’s Office and he didn’t expect it – either way, the seller is trying to renege on the transaction. Sometimes it is for a valid reason, most often it is not.
You have a couple of choices when the NOI “hits the fan” so to say:
1.) Release the NOI using a Release of Lien document
2.) Hunker down and fight the seller to come to closing
3.) Get paid to release the lien
Your choice is personal and determined by the potential lost profit in the deal, the homeowner’s/seller’s REAL motive for not wanting to sell, how much you can get paid for a release of lien, and your disposition on that day. So in the final analysis, the choice is yours.
The next vision I want you to have is a mental picture of me working out in the gym and along comes an Olympic weightlifter. While I may be the handsome one, he has the ability to lift a car and me, well….. Anyway, the NOI would be me and the MOC is the Olympic weightlifter by comparison! So what’s the difference? The main, and only true difference, is that the MOC (Memorandum of Contract) is signed by the homeowner and the buyer. There can be few or no logical reasons that a homeowner can now say he didn’t know he was selling his property or whatever other silly excuse he might come up with. The law isn’t always logical, but in making a case in front of a jury or a judge, it helps to have all the evidence you can get beforehand. The courts love MOC’s, but don’t like NOI’s nearly as much.
In summary, if you want to protect yourself against “Deal Stealers”, use an MOC or at least a NOI on every deal. Much more importantly, get your Disclosure Documents signed to cover yourself against the “Anti-investor” Statutes to strengthen any deal where you get involved. These are not just for homeowners in foreclosure or contemplating foreclosure, they are for EVERY seller you come in contact with the exception of institutional sellers as in REO deals.
To your limitless success,
Dave Dinkel
Role Of The Hardship Letter In A Short Sale
The Hardship Letter
What happened? Seriously what happened? When you took the loan out everything was great. You were making money, your credit was good and by all accounts you appeared financially sound.
Now you’re in default and telling your lender you need to sell the property short to avoid the home being repossessed by foreclosure? Ok, then tell us what happened.
We hear this all of the time and we tell the homeowners this is exactly what the bank is thinking and this is what they will have to explain. So just how do you explain it…you write a very compelling hardship letter. Read more
Real Estate Investing 911 | Navigating the Real Estate Industry Shakeout
Hundreds – if not thousands – of negative news stories have been done in the last year discussing just how bad the real estate market is, how homeowners and real estate investors and those involved in real estate investing as a business have lost their shirts, and how these terrible conditions are likely to continue for the foreseeable future. You’re only getting part of the story. Let me play Paul Harvey for a minute and give you the rest. Read more
Real Estate Investing And The Law Of Attraction
Real Estate Investing Strategies – Using the Law of Attraction to Create Your Ideal Income
by Dr. Maya Bailey
Did you know that your thoughts and intentions play a big part in your success? Not only that, but what you choose to focus on determines what you’ll attract?
This article describes the Law of Attraction and why it’s so important to master this Law. By learning how to implement the Law of Attraction you’ll be able to create your Ideal Income. Read more
Understanding the BPO in Real Estate Investing
In this age of endless foreclosures, falling prices, and economic doom and gloom, many savvy real estate investors are making their fortunes by doing short sales. If you are in real estate investing and do not know how to do short sales, than you are truly missing the boat. If you are doing short sales today, you know that the industry is changing so quickly that it is sometimes hard to keep up.
In order to continually educate ourselves we ask the best and brightest about the latest real estate investing trends. One of my favorite people to call is Dwan Twyford from the Investor’s Edge University, and a regular guest on our show. Dwan told me about a recent article she had published, and I wanted to pass it on to all of you. Read more
Short Sale Video Course
Introducing the Short Sales By The Numbers Online Video Course. This video tutorial is a comprehensive, 25 video course that takes you step by step and shows you how to properly and successfully complete a short sale.
Over 1,000 real estate agents and investors across the USA have found this to be one of the best courses on short sales they have ever seen. It is based upon our hugely successful live seminars and affords the viewer the opportunity to learn how to execute short sales in the privacy of their own home or office and on their timeframe. Read more
Your Contracting Team
 
If you are engaged in the real estate industry, chances are, at one time or another, you will find yourself in need of professional help to repair, improve, or maintain real estate. Read more
100 Words To Greatness
Once they sign on, my brokerage requires that all new agents enroll in a very popular real estate training program. It’s a fairly hefty charge on your credit card right out of the blocks amongst all the other initial investments a new agent must make embarking upon this career. Read more
