What banks are offering favorable prices to investors in California?


#1

I am an investor.? I want to buy REO’s but i need a 40% discount less repairs.? Is anyone having success buying Bank owned REO’s?


#2

You’ll find these kind of discounts at the auctions right now, but 40% plus repairs seems a bit wishful once they are listed as REO’s. Anyone seeing these kinds of discounts?


#3

Rumor has it that the auctions are not being fairly conducted…the presense of shill bidders to raise prices, etc. Also, the auctions are not as yet “Absolute”.
?
Has anyone had success going to Hudson and Marshall, etc.???


#4

I should clarifiy that I was talking about the real foreclosure auctions - trustee sales, not these bank marketing events that you are referring to. I don’t know that they are “unfair” but they are absolutely designed to create hype and get people competitively bidding. I also don’t think these bank auctions offer any great buys. Case in point we saw a house that sold for ~$750k in 05, sell at trustee sale auction for ~$265k last week, yet a similiar house sold at a bank auction this weekend for ~$425k (I’m estimating, but this is close). Anyone found any truly good deals at these bank auctions?


#5

I did. It was 48% off. I backed out of it though, didn’t want to deal with extensive repairs.


#6

Sean, I’m surprised that substantial discounts are available at Trustee sales. In Alameda County, I believe 90% of properties are going back to the banks as the loan amount is greater than the value. Where are you finding great deals at Trustee sales?


#7

Joe - 97.8% of properties taken to trustee sale auction go back to the lender - but that is absolutely not due to the loan amount being greater than the value. Most opening bids at trustee sale are discounted, with the average discount being 21% off the loan balance (usually an 80% 1st), and with 39% having a discount of 30% or more.
Taking a look at recent Alameda auctions using our Track feature which provides daily updates on the trustee sales, there is certainly significant discounting taking place. Though I was surprised to see how much stronger Alameda appears to be than Contra Costa. Most of what appears to be selling at trustee sale in Alameda is older homes built 1960 and earlier. Contra Costa on the other hand has lots of fairly new homes being discounted considerably.
Check it out for yourself, go to Track, pick a county and any day in the past, then scroll down to “Sold to 3rd” and “Sold to Bank” and check out the Opening Bids vs. the Sale Amounts (total amount owed) and estimate values. You’ll see that most property is being offered for below estimated value at this time.
Sean


#8

Could you clarify: Do you mean that banks are discounting their notes at trustee sales or that banks are actually discounting the properties at below current market value?


#9

Hi Joe,
Essentially the answer is yes to both. They are taking a discount off the balance on the note (mortgage), and since most of those mortgages were 80% first morgages, the discount often results in the property being offered at auction for less than current market value.
Lets try an example:

  1. Home was purchased in 2006 for $500k, with a $400k 1st mortgage, and $100k 2nd (100% financing using a 1st and a 2nd to avoid PMI).
  2. The property is now only worth $350k (a 30% drop).
  3. The 1st mortgage goes to sale with a $400k balance, but is discounted to $300k (a very common discount right now).
  4. The 2nd mortgage has its security in the property wiped out by the sale, and doesn’t bother trying to foreclosure or protecting their postion in the property as their loan is already a total loss.
    This scenario is playing out 100’s of times a day in CA right now.

#10

“Case in point we saw a house that sold for ~$750k in 05, sell at
trustee sale auction for ~$265k last week, yet a similiar house sold at
a bank auction this weekend for ~$425k (I’m estimating, but this is
close). Anyone found any truly good deals at these bank auctions?”
?
The difference is the ability to pony up the cash. For some it is much easier (and worth it) to get $425k loan, than to come up with the $265K in cash.


#11

Hi Apian - great comment, we saw many similiar results at a recent bank owned auction recently. Trustee sale auctions are not accessible to most people because of the cash requirement, but that is exactly why there can be real deals on the court house steps.


#12

We have GMAC first trust note tapes available. Please contact Wayne Jefferies at 877-747-3758 ext 105


#13

I have some experience with putting together Bulk REO portfolios. There is no real structure to the business of buying in bulk but I am starting to understand the issues and the opportunites. I would be happy to discuss them further with you.


#14

EO homes are often considered the best way to purchase a distressed
property as the seller is out of the picture. It’s just the investor,
the investor’s agent, the bank and the bank’s agent who are negotiating
the transaction.


#15

Best for some, but not for all. You can buy with little or nothing down preforeclosure, and you can often get better discounts at the auctions. So it really depends on your particular needs.


#16

Owning is house is all well and good but if you can?t comfortably make
a mortgage payment, why do it. I don?t see what her beef is. We?ve all
rented and it?s ok to be a renter. There should be no stigma attached
to that. In this age of job mobility, sometimes it is better to rent
than own. BTW, I lost $25,000 on the sale of my house recently (not in
Cali, but KY). So I know more than I ever wanted to know about the
housing bubble. It smacked me in the face.


#17

hi, ?
I’m a ‘for the moment’ home owner in Berkeley, ca. ?My house is listed for trustee sale on Dec 21st. ? ? I stumbled on this site as I was trying to get a sense of the process. ?I have lived in my home for 22 years - raised a child, got a divorce, and then was very badly taken advantage of by a godson who I tried to help. Long story - lessons learned - he bankrupted me and I ended up caught in the credit, re-fi crunch with a horrible mortgage that I can not afford, worth half of what I owe. ?the bank has not been helpful.?
I have been resigning myself to fresh start - walking away, ?but wonder if homeowners ever buy back their own homes or in the spirit of ?depression era penny auctions are there ways to partner with others who will buy the home and then sell for some profit back to the previous owner? ? ?
Any advice would be welcomed.


#18

The laws now make it difficult to buy back your home after auction, as any debt wiped out at auction is allowed to re-attach. Seems that these laws were put in place to discourage folks from using foreclosure to wipe out a portion of their debt. Be sure to check out our overview of the foreclosure process at http://www.foreclosureradar.com/ca_foreclosure_process.php.


#19

Yes I have. I bought a house in Ranch Cucamonga last March from Hudson & Marshal Auction.? So far all the actions I have been to, Hudson & Marshal is the one I like the most, which I believe to be the fairest of them all.? However, having said that, I do believe they too have people inside that are manipulating the auction.? Even though I bought the house below the market value even with today?s standards, I truly believe that I could have gotten cheaper.? Stick to your original assessed value and do not let your emotions interfere with your decision.