The Foreclosure Expert – How to find foreclosures

by Foreclosure Experts – November 2009

Foreclosure expert Alexis McGee of Foreclosure Experts recently blogged about this story from a client and had to make sure you read it. She is blogging daily, so you need to be reading! With up-to-the minute, invaluable timely news information right at your fingertips. Alexis writes what is really happening in the housing and foreclosure markets, housing sales trends and outlooks, as well as the overall economy, and everything in between.

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Here’s the story…

“I was recently about being interviewed recently by our local NBC news affiliate. To read the blog, click here. Basically, IndyMac Bank (now OneWest Bank), is holding one of my clients hostage, demanding a $75k promissory note, or they will proceed to foreclosure. For the life of me, I couldn’t figure out why they were doing this. The BPO came in at the contract price of $275k, with a net to IndyMac of $241k. What advantage could there possibly be for them to proceed to foreclosure?

Yesterday, I figured it out. You see, IndyMac was taken over by the FDIC and sold to OneWest Bank in March/2009. Guess who the investors are behind OneWest? George Soros, Michael Dell, Steve Mnuchin (former Goldman Sachs executive), and John Paulson (hedge-fund billionaire).

Now, listen to the deal they got from the FDIC….

Basically, they purchased all current residential mortgages at 70% of par value (70% of the outstanding loan amounts). They purchased all current HELOCS at 58% of Par Value!!!

Next, in order to “sweeten the pot”, the FDIC stepped in and guaranteed the following: For any residential mortgages where OneWest experiences a loss, the FDIC will step in and cover anywhere from 80%-95% of the loss. The loss is calculated using the ORIGINAL LOAN BALANCE, not the amount that OneWest paid for the loan. Let’s use my clients situation as an example:

Loan Amount is $478,000, plus 6 months of missed payments, for a grand total of $485,200. OneWest pays $334,600 for the loan. We have an all cash offer of $241,000, net to OneWest. So, let’s do the math, shall we?

The net loss, according to the FDIC formula is the ORIGINAL LOAN AMOUNT minus the amount of the offer. In this case, $485,200-$241,000, or $244,200. Next, the FDIC, according to their Loss Share Agreement, writes a check to OneWest for 80% of the so-called “net loss”. So, in this case, OneWest gets a check from Uncle Sam for $195,360 (.80 X $244,200).

Add the $195,360 to the sales price of $241,000, and you get a grand total of $436,360. Remember, OneWest paid $334,600 for the loan. So, OneWest puts $101,760 in their pocket, thanks to the FDIC. Folks, that is over $100k of our hard-earned tax dollars!

So, you ask…Why does this program hurt short sales? Because, our brilliant government offers this SAME PROGRAM FOR FORECLOSURES! The only difference is, the government picks up 80% of the tab on all of the extra costs associated with a foreclosure (BPO’s, upkeep, utilities/maintenance, legal fees, etc.)

So, If I’m OneWest, why would I want to waste my time negotiating through a Short Sale, when I can make the same amount of money (if not more) by just letting it go to foreclosure? And we wonder why nobody can get a Loan Modification? Why would OneWest approve a loan modification for this guy, when they can foreclose and make over $100k? And, to add injury to insult, they have held this loan for 6 months! Not a bad ROI, huh?

What infuriates me the most is that in my particular case mentioned above, they have the guts to hold my client hostage for a $75k promissory note, after they are already making more than $100k on the sale!!! This is his primary residence, 1st Position loan, and OneWest has NO RECOURSE! Imagine if they could make $100k, then get a deficiency judgement! Talk about making some big bucks!
Can you say “GREED”?

The scary thing is that over 50 banks have Shared Loss Agreements in place with the FDIC. Some of them include: Bank of America (go figure), CitiMortgage, Wells Fargo, etc.

This entire agreement between the FDIC and OneWest can be found here, on the FDIC website. It’s all there, for the world to see! They have it all layed out. All of the formulas, worksheets, etc.

Now, it’s up to us to bring it to the attention of our elected officials and the media. Enough is Enough!

Wait, it gets better…The FDIC just announced that it needs to start borrowing money from the U.S. Treasure in order to replenish it’s deposit insurance fund (the same fund being used to pay all of these banks in the Loss Share Agreements). Go Figure! –Robert Hertzog, Summit Home Consultants”

Now, if you want an easier, smarter way to find great deals, you need to focus on “getting on the inside” with REO agents and asset managers, so you can help them unload their non-performing assets and get a great deal for yourself at the same time. I will show you how this is done on Wednesday, October 28th at 6pm PDT (9pm EST) in my *FREE New Foreclosure Investor Webinar. *Details Here

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Are you wondering how you can you find and quickly flip your first wholesale deal without using any of your own money or credit? Curious about what our successful clients are doing right now to make huge profits? These are just a few of things you’ll

I live in Peoria, Arizona and this is an article that was in my community bulletin. What is important to see is that I have seen bids being taken for rehab homes in many communities in Arizona. You can find these opportunities at city government web sites on the bid pages.

Determined to stick a fork in the inflated number of Peoria homes in foreclosure, the city’s Neighborhood and Revitalization Section is taking a four-pronged approach to stabilizing hard-hit areas.

Those approaches fall into two categories – those intended to help prevent foreclosures and those designed to get bank-owned properties bank into the hands of residents.

Utility Assistance
The first of the prevention measures targets the smaller-but-vital monthly bills that can feel suffocating to someone trying to pay down a large mortgage debt. Under its Utility Assistance Program, Peoria will toss a financial life preserver to qualifying residents by providing on-time assistance of up to $300 to pay for water, gas or electric service.

Emergency Rehab
Costly home repairs can be a tipping point for homeowners on the brink of foreclosure. They can’t sell the property without doing the work, but should they pour more money into a property they might lose?

In extreme cases, Peoria’s Emergency Rehab Program will provide up to $20,000 for repairs essential to life, health or safety. The city places a five to 10 year lien on the property; if the homeowner sold the home within the lien perios, the money would be returned to the city to assist other qualified homeowners.

Homebuyer Assistance
The city’s Homebuyer Assistance Program offers $10,000 grants to qualifying low and middle income first-time homebuyers who purchase in Peoria. In an effort to reduce the number of homes in foreclosure, the city will tack on an extra $5,000 for those who buy foreclosed properties

This is a very popular program and 80% of last year’s participants foreclosed property, according to Carin Imig, the city’s Neighborhood and Revitalization administrator.

Stimulus Grants
Peoria has applied for $10 million in stimulus money from the federal Department of Housing and Urban Development to:

• Purchase, rehab and sell foreclosed homes.
• Purchase, rehab and lease (and eventually resell) foreclosed homes.
• Assist low and moderate income homebuyers (separate from the Homebuyer Assistance Program).

“Our rehab will be bringing them up to new energy-efficiency standard,” says Planning and Community Development Director Glen Van Nimwegen, who adds that the program administrators would make every effort to use materials and labor from Peoria.

Looking Forward
That last point links neighborhood stabilization to another city initiative: Attracting and Supporting Green Businesses. Officials in Peoria’s Economic Development Services Department are working to connect those companies with the officials responsible for the home repairs.

Finally, Peoria’s Code Compliance Division, which moved to the Police Department under a reorganization of city government, is hard at work making sure the remaining foreclosed homes do not become a detriment to the city.