By Anthony Aires

REO listings are highly visible these days, though they were difficult entities to access a few years ago. Today, people have the knowledge to distinguish between foreclosures and REO bank owned properties. As a result, those interested in REO houses search for specific real estate owned listings at different places and not the foreclosure listings.

Finding listing of REO properties is of interest to direct investors and the REO brokers. So, here is a discussion on how to find these listings and how to use them for REO investing.

REO Listings for Investors

REO brokers are the best source for the investors to find real estate owned listings. As an investor, you must search for a reliable broker dealing in bulk REO properties and sign-up with their services to receive the regular updates on REOs available in the market. Here are some tips to find brokers offering these listings:

• Choose the broker offering listings even in the smallest towns in your region.

• A broker should offer all types of details of the REO property.

• You may also be interested in the brokers offering bulk REO listings available with a seller.

• Consider the reputation of the broker before trusting on the listings offered by him.

Finally, always try to take recommendations from people around you and also from the regular REO investors about the REO brokers in your area.

REO Listings for Brokers

If you are an REO broker, you can obtain REO listings in a number of ways. Getting registered with the asset management companies is the most popular way to obtain these listings. These companies are hired by the banks to help them dispose off the REO properties. You may also subscribe to the services of banks that don’t hire asset management companies but deal with REO properties of their own.

Another way to obtain real estate owned listings is by maintaining good contacts with the asset managers. It is important to build and maintain relationships with the asset managers who give preference to inform you about the latest REO properties added to the listings. You can ask your fellow brokers to recommend your broker service to the asset managers. In fact, being a part of the brokers’ network should help you obtain REO listings. You can learn even more tips in this direction by joining an REO broker training program.

How REO Listings Help?

REO listings help the investors learn about the latest bulk REO properties available for sale. As an investor, you can use these listings to compare the different types of REO houses on the basis of their location, space available with each one of them, number of bedrooms and other such things.

Before you go through the real etate owned listings, it is important that you assess your financial conditions. You must set a budget to set the price you can spend as investment in the REO properties. This will help you choose the listings that have properties matching your budget limits.

You indeed need to spend time and efforts to scan different REO listings available on the web. REO properties are hot and happening investment options and you must search for them at the right places.

Anthony Aires here and I want to help you learn more about REO Listings and how you can find them for yourself. Simply Click Here

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By John C Hanlin

What are REO Properties?

“REO” is an acronym that stands for “Real Estate Owned” properties. A loose definition is: homes that have been foreclosed upon and subsequently become the property of the foreclosing bank or lender. REO properties are also known as bank owned residential property, bank REOs, house foreclosures, etc. “REO companies” are businesses that deal exclusively with these investments.

A New Industry Is Born:

Foreclosure has been front page news across America for the past couple of years. And this phenomenon is expected to continue unabated for the next 2-3 years, if not longer. And, as a result, foreclosure property investment has become an industry unto itself. This article is written to help investors understand the REO properties business and most importantly, the best way to profit from this tremendous opportunity: by investing in “specialized REO companies” .

Today, at any point in time, there are several MILLION homes in various stages of foreclosure. As a result, companies that are completely dedicated to the acquisition and resale of REO & bank owned residential property have been springing up all around the United States. These are called “REO companies” or “REO asset management companies”.

Specialized REO Companies Emerge:

As foreclosure properties were just beginning to grab headlines, various investors and real estate professionals began to approach banks and lenders for their lists of bank REOs. When the banks supplied these lists, they also provided the selling prices that they would accept for those homes. There was some negotiation room at that time, but the banks weren’t really willing to drop their prices too much below the amount of their original loans to the former homeowners. At the time, making a foreclosure property investment was basically an informal process done on a bank-by-bank, house-by-house basis.

However, that changed when foreclosures began to sweep across the US like a tidal wave. Banks and other lenders were literally being inundated with foreclosure properties every week and began to seek means to cut their losses and unload these bank REOs. This is because it costs money to hold onto a house with no payments coming in. The banks and other lenders still have to continue to pay fire insurance, maintenance, utilities and numerous other expenses on every one of their REO properties. As a result, they began to reduce their asking prices and became more willing to negotiate in order to unload their ever-increasing inventories — thus, an industry was born.

So, in the American entrepreneurial spirit, specialized new companies began to take shape. These new “REO companies” deal only with “distressed” real estate, including bank owned residential property, homes in various stages of foreclosure and homes that are in jeopardy of foreclosure. An over-simplified description of their business model is that they acquire bank REOs well below the current market value, repair them to “move-in” condition and resell them as soon as possible at a profit.

There are a lot of businesses that like to consider themselves “REO asset management companies”. However, most are not making any money. This is because they lack one or more of the following: experience, strong management, funding/cash flow, relationships with banks and lenders, networks of realtors, contractors and appraisers, etc. However, the REO companies that ARE profitable have ALL of these attributes and proven business processes as outlined below:

What Successful REO Asset Management Companies Do:

1) They request lists of bank owned residential property from their bank and lender contacts. These lists are often provided to these companies before they are released to the general public because they typically will buy in bulk and can quickly reduce the inventory of bank REOs significantly.

2) The best REO asset management companies have networks of associates “on the ground” around the country that physically inspect each of the foreclosure homes individually. They create a file for each property, describing its condition and all relevant details regarding repairs that need to be made and any other pertinent issues (complete with photographs).

3) They have a network of appraisers who will provide a “BPO” (broker price opinion) for each of the REO properties based on its current market value in “as is” condition. This will help them formulate their purchase price offer to the bank.

4) Next, the REO companies will submit their offers to the banks for each bank owned residential property that they believe has good resale potential. NOTE: offers will typically be no greater than 50-65% of the calculated current market resale value of the home. (This is where they make their money!)

5) Upon bank approval, the bank REOs are purchased.

6) Then, the REO asset management companies send in their networks of building contractors to make any necessary repairs to get the former REO properties into “move-in” condition.

7) Finally, the homes are listed for sale via their affiliated real estate brokers around the country. The properties are then typically priced under current market value in order to resell the the former REO properties quickly.

And, believe it or not, some of these REO companies are so efficient that they can buy, repair and resell these home in an average of 4-6 months!

How To Invest In Successful REO Companies:

Professional REO asset management companies will set out to acquire what is called an “investment pool” of bank owned residential property. Typically, they will first seek out investors as “silent partners” to raise a certain amount of capital to help fund the pool. For an example, let’s say they will raise $5,000,000. (This is money from investors like you and me.) The silent investors are not involved in the day-to-day management of the pool. It is a “passive” investment for them.

Once the $5,000,000 is raised from investors, the REO companies will usually go to their lending institution(s) and initiate a new loan for an additional amount of capital — leveraging the $5,000,000 of investor money that they have raised. Let’s say that is another $10,000,000. Now, they have a total of $15,000,000 in buying power with which to acquire bank REOs for their investment pool of homes.

Next, the REO companies will begin the processes listed above in Steps 1-7. They will purchase the “cream of the crop” from the bank REO lists until they reach their $15,000,000 limit. Now they have acquired their pool of homes. (Let’s say 100 homes, averaging $150,000 each.)

As an investor, you would now be invested in this pool of REO properties. When all 100 homes in the pool are finally sold (often within 4-6 months), the pool is closed. At that time, the $10,000,000 loan is repaid and the investors are repaid their original investments (totalling $5,000,000). Finally, net profits are calculated and investors are paid their pro-rated share of the profit.

NOTE: It is not uncommon for the top REO companies to payout HIGH double digit returns in just 4-6 months!

About the author:

John Hanlin is an Independent Investment Consultant specializing in high yield safe investments secured by real estate. He is a seasoned investor of over 25 years. Mr. Hanlin is the owner of the investors’ website: http://www.JohnHanlin.com.

To learn more about investing in REO Companies & REO properties, click on this link: CONTACT FORM

You have full permission to reprint this article provided it is kept unchanged.

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EnergyStar.gov –  Check Out Energy Rebates

This is a government site that offers lots of energy saving tips as well as explains what energy saving grants or credits might be available.

Here is the latest issue of my foreclosure trends newsletter.  As you can see, the trend is not our friend, in the sense that the housing market has not recovered.  Until jobs come back and people are employed and feel safe in their employment, they will tend to avoid making a committment.

ForeclosureTrends.pdf

When you buy a foreclosed with me as your agent, I will be happy to sign you up for a coupon from Lowes.   It entitles you to 10% off, up to a predetermined purchase amount.  Currently I believe it 10% off of up to a $10,000 purchase.  Of course, this amount and the coupon’s terms and conditions are subject to change by Lowes at anytime.

Besides Lowes, RE/MAX has exclusive deals with Cambria and Pods-to name just few of the suppliers we can help you save money with.  We’ve got your back.  Consider me when choosing your team.

Besides the board of realtor sites:  http://theThing.mplsrealtor.com and market data posted elsewhere at http://www.MplsRealtor.com I have a subscription to Realty Trac.  My subscription gives me additional data about foreclosures and trends within certain zip codes.  This is in addition to my daily subscription to Finance & Commerce (a business newspaper that prints all the foreclosure information as well as very timely articles regarding the business community).  If you are looking for someone who has experience and access to information about distressed sales, we need to be working together.  Whether buyer or seller-I can help you understand the market we are in and the options and opportunities available to you.  Give me call today.

These are a couple of my newsletters that have a ton of valuable information. Go check them out.

Foreclosure Market Trends Newsletter
http://www.realtytrac.com/MarketTrends/NewsLetter.aspx?guid=131bd355-1b69-4bd1-99cd-2f0c9a936810

Real Estate Cyber Space Tips
http://www.REcyber.com/cybertips/r11627

This explains what the HAFA is and how it might work for you. This might work for people that are in distress and would like to try and avoid a foreclosure. Here is a link for additional information http://www.CDPE.com/hafa I work with homeowners who need help at this difficult time-let me know what I can do for you.

By Craig Meriwether

One of the great parts of the owner finance home sale is the opportunity to work with the buyer in the case of financial problems. By creating a solution that works for both parties a home owner is more than likely to stay in the house and the loan holder will continue to receive monthly payments. If a solution cannot be created then unfortunately foreclosure might be the only option to take. This article will present a look and some of the different ways foreclosures can be handled.

In some states, the beneficiary can choose one of two methods to foreclose judicial or non-judicial. In a judicial foreclosure, the beneficiary files a lawsuit against the trustor in Superior Court to foreclose on the property. The case is then set for trial. If the court rules in favor of the beneficiary, the property will be ordered sold at a public sale. In most instances, however, it is a non-judicial foreclosure. In a non-judicial foreclosure, the court system is not involved. To foreclose non-judicially, the deed of trust or mortgage must contain a power of sale clause. The power of sale clause gives the trustee the right to begin foreclosure without going to court. To include a power of sale clause does not require a specific form or language.

If, on the other hand, the security instrument does not contain a power of sale provision, judicial foreclosure is the beneficiary’s only way to obtain the property. Most conventional deeds of trust say “with the power of sale”.

Judicial and non-judicial foreclosures differ in many ways. The foreclosure method selected by the beneficiary has significant consequences for the trustor.

Non judicial foreclosure is relatively fast, as this method does not involve the court system. In most instances, non-judicial foreclosure takes, at minimum, about four months after the trustor has failed to meet the obligation or defaulted on the loan. Judicial foreclosure, on the other hand, may take up to several years.

Non judicial foreclosure is generally less costly than judicial foreclosure. In a non-judicial foreclosure, the trustee’s and attorney’s fees are largely specified by law. In a judicial foreclosure, however, there are generally no legal limits for attorney’s fees. As a result, the trustor may be liable for significant legal expenses.

Another major difference between the two foreclosure methods is the beneficiary’s right to a deficiency judgment. A deficiency judgment is a court order stating that the trustor still owes money to the beneficiary if the proceeds from the foreclosure sale are not sufficient to pay the balance of the debt.

Some state laws do not allow a deficiency judgment in a non-judicial foreclosure on residential purchase money loans. A residential purchase money loan is one in which loan proceeds are used to purchase the property. Furthermore, state laws do not allow deficiency judgments against the residential trustor where the loan was made by the seller of the property or by a third party lender (often a financial institution) on a four-unit or less residential property that is the principal residence of the trustor. If the beneficiary judicially forecloses on a non-purchase money residential loan, a deficiency judgment may be obtained against the trustor.

Non-judicial and judicial foreclosures also differ with regard to the trustor’s right of redemption after the foreclosure sale. This is the trustor’s right to reclaim the foreclosure property. In a non-judicial foreclosure, the sale of the property at the trustee’s sale is an irrevocable final sale, and the trustor does not have the right to redeem or reclaim the property after the sale. Judicial sales, however, are subject to redemption by the trustor.

This summary of the major differences between non-judicial and judicial foreclosure shows the advantages of non-judicial foreclosure for the beneficiary. The non-judicial foreclosure is timely, economical, non subject to redemption, and may command a higher sales price. In addition, it is unlikely that the beneficiary would recover any losses through a deficiency judgment, as the trustor could not make the loan payments in the first place. Because of these advantages, beneficiaries typically prefer to foreclose non-judicially. Beneficiaries might foreclose judicially when they see an opportunity to recover any losses through a deficiency judgment.

The following two sections give detailed information on each of the foreclosure methods.

Non-Judicial Foreclosure

This section describes the major procedural requirements of non-judicial foreclosure, discusses the trustor’s reinstatement and redemption rights, reviews legal provisions for trustee’s fees and summarizes special legal provisions affecting foreclosures in many states.

Many states allow the beneficiary of a deed of trust containing the power of sale provision to foreclose non-judicially after the trustor has defaulted on one or more contractual obligations. In case of default, the beneficiary may order the trustee to initiate foreclosure.

Notice of Default

Foreclosure begins when the beneficiary notifies the trustee that the trustor has defaulted on any obligations stated in the promissory note and deed of trust. The beneficiary gives the trustee information concerning the condition of the debt such as the amount of the unpaid balance and due dates. Upon receipt of this information, the trustee prepares the Notice of Default.

The Notice of Default must be recorded in the office of the recorder of the county where the property is located. If the deed of trust encumbers property located in more than one county, the Notice of Default should be recorded in the other counties as well.

The trustee must mail a copy of the Notice of Default to the trustor and to each person requesting notice within ten days of recording the notice. The law specifies additional notification requirements under certain circumstances. The Notice of Default must be published weekly for four weeks in a newspaper or personally be served on the Trustor, if the trustor has not requested to be notified of its recordation of the notice

Trustor’s should always notify the beneficiary and the trustee of any address changes to ensure prompt receipt of any correspondence from the beneficiary or trustee.

Before January 1, 1986, the trustor and beneficiaries under subordinate deeds of trust were given three months from the recordation of the Notice of Default to cure the default. An amendment to the law extended the expiration of the reinstatement period to five business days before the scheduled trustee’s sale. If the trustee’s sale is postponed, the reinstatement period is extended to five business days before the new date of the sale.

At any time during the reinstatement period, the trustor may stop the default by paying the beneficiary all sums of money due on the loan up to that point including additional costs incurred by the beneficiary, and attorney’s or trustee’s fees as specified by law. It is not necessary to repay the entire loan balance.

After reinstatement of the loan, the foreclosure proceeding is discontinued and the trustor resumes making the regular periodic payments.

Notice of Trustee’s Sale

If three months have passed since recording the Notice of Default, and the trustor has not begun to reinstate the loan; the trustee may proceed with the foreclosure by preparing a Notice of Trustee’s Sale.

The Notice of Trustee’s Sale must be recorded in the office of the recorder of the county in which the property is located at least 14 days before the date of the sale. As with the Notice of Default, the Notice of Trustee’s Sale must be mailed to the trustor’s last address actually known to the trustee.

The Notice of Trustee’s Sale also must be published in a newspaper of general circulation in the city, judicial district or county where the property is located. The notice must be published once a week over a 20-day period before the sale.

In addition to mailing and publication, the Notice of Trustee’s Sale must be posted for at least 20 days before the sale at the following locations:

o In at least one public place in the city, judicial district, or county in which the property is to be sold; and

o In a conspicuous place on the property to be sold

Improperly broadcasting the Notice of Trustee’s Sale typically will result in the cancellation and re-notice of the sale.

As mentioned before, the trustor can cure the default during the reinstatement period that runs up to five days before the schedule sale. After the reinstatement period expires, the trustor must pay the entire indebtedness plus foreclosure costs to avoid foreclosure. This is called redemption and only can be done during the five days before the sale. The trustor’s right of redemption ends once bidding at the foreclosure sale starts.

Trustee’s Sale

The trustee or the trustee’s agent must conduct the foreclosure sale at a public auction in the county where the property is located. The sale is to the highest bidder who must pay in cash, cashiers check or cash equivalent as specified in the notice and acceptable to the trustee.

The trustee may postpone the sale at any time before it is completed. The sale may be postponed at the trustee’s discretion, upon instruction by the beneficiary, or upon a written request by the trustor who has the right to request a one-day delay to obtain sufficient cash to pay the debt or bid at the sale. The trustor’s request for postponement must include a statement identifying the source of the funds. The law allows for three postponements. After three postponements, a new notice of sale must be given, except for postponements requested by the trustor or ordered by a court.

After the sale to the highest bidder, the trustee executes and delivers a trustee’s deed to the purchaser. The trustee’s deed conveys title to the purchase free and clear. The issuance of the trustee’s deed terminates the previous trustor’s legal and equitable rights in the property. It should be noted, however, that title to the property is conveyed subject to all senior liens, including liens for property taxes and assessments.

The purchaser of the foreclosed property is entitled to take immediate possession. A trustor who refuses to vacate the property may be legally forced to do so.

Rent and Rental Income

Generally, the trustor occupying the property does not have to pay rent to the beneficiary while in default. If a deed of trust should indicate a rent liability, enforcement of it would be unlikely.

The beneficiary may have a right, however, to any rental income generated by the property during the period of default. In the absence of such a provision in the deed of trust, the beneficiary is generally not entitled to any rental income.

Deficiency Judgment

In General, the law prohibits a deficiency judgment in a non-judicial foreclosure with a power of sale provision. Even if the proceeds from the foreclosure are inadequate to repay the loan, the beneficiary has no other possibility to recover.

Trustee’s Fees

The fees a trustee is entitled to charge the beneficiary or deduct from the proceeds of the sale are prescribed by law. The trustee may charge for costs incurred in recording, mailing, publishing, and posting of Notice of Default and Notice of Trustee’s Sale; the cost of postponing the sale by request of the trustor (not to exceed $50 per postponement) and the cost of a trustee’s sale guarantee. In addition to charging for these actual costs, the law provides for a fee schedule based on the amounts of the unpaid debt.

The legal limitations for trustee’s and attorney’s fees do not apply to attorney’s fees the beneficiary is entitled to recover under special provisions of the deed of trust.

Special Legal Provisions

Special federal and state laws may affect the manner in which the foreclosure is conducted. If the loan is insured or guaranteed by the U. S. Department of Housing and urban Development (HUD! EHA) or the Veterans Administration (VA), certain procedures must be followed. In the case of a VA-guaranteed loan, the trustor may be liable for any deficiency, unless the veteran obtains a release of liability from the VA. California law does not necessarily protect the trustor from liability for a deficiency on a VA guaranteed loan. Federal laws governing the VA loan program take precedence over any conflicting California law. Trustors should contact the VA for details concerning their rights and to learn about specific requirements.

Judicial Foreclosure

Judicial Foreclosure is tried in some state Superior Courts. The beneficiary, upon default of obligation by the trustor, brings a foreclosure lawsuit against the trustor. If successful, the court will issue an order to sell the property at a public sale. The beneficiary must use judicial foreclosure if the security instrument does not contain a power of sale provision. A mortgage or deed of trust containing the power of sale provision may be foreclosed judicially if the beneficiary chooses to do so.

The decision to foreclose judicially or non-judicially is not necessarily final. The beneficiary may discontinue judicial foreclosure at any time and commence non-judicial foreclosure.

Conversely, the beneficiary may abandon non-judicial foreclosure and initiate judicial foreclosure. Beneficiaries sometimes initiate both types of foreclosure simultaneously.

Foreclosure Sale

A court-appointed commissioner or sheriff in the public place must give notice of the sale of the property for 20 days preceding in the date of the sale. This same notice must be published in a newspaper of general circulation weekly for 20 days. The notice also must be sent by certified mail to all defendants at their last known addresses.

At the foreclosure sale, the property must be sold by the auctioneer to the highest bidder who is financially qualified.

Redemption of Property

In a judicial sale, the trustor has the right to redeem or reclaim the property after the foreclosure sale. For a trustor, the right of redemption makes a judicial sale attractive. It should be remembered, however, that a judicial sale might also lead to a deficiency judgment. This possibility does not exist in a non-judicial foreclosure.

Deficiency Judgment

In a judicial foreclosure, the beneficiary has, under certain circumstances, a right to a deficiency judgment. The deficiency judgment is limited to an amount equal to either the difference between the indebtedness and the fair market value of the property, or the indebtedness and the sales price at the foreclosure sale, whichever is less.

Rent and Rental Income

The trustor occupying the disputed property does not have to pay the beneficiary rent while in default. The beneficiary may be entitled, however, to any rental income generated by the property.

After the sale, the trustor retains possession of the property and does not have to pay the beneficiary rent while in default. The beneficiary may be entitled, however, to any rental income generated by the property.

Craig Meriwether is owner of Kula Investments, a company founded you help you get top dollar for you owner financed real estate loan. [http://www.ioubuyer.com]

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By Crystal Faith Dumangas

The country’s current economic conditions have consumed the real estate market with foreclosed homes. As thousands of properties are being reclaimed due to non- payment of loans, bank owned foreclosures have gained a strong reputation and popularity amongst real estate investors. Here are some reasons why purchasing an REO is a wise option if you are thinking of investing in a property.

Reduced value, no tax liabilities

The value of a REO is much reduced compared to their real worth which makes it a lucrative venture for home buyers. The banks become liable to pay taxes on the properties so they very anxious to get rid of these as soon as possible. The banks will offer better deals than they would offer on traditional properties and most often the properties will be available below the market price. The bank will also provide discounts for certain repairs.

Once a property becomes an REO, all liens against the property are removed and taxes are brought to current. This makes REO investing a secure venture compared with other real estate deals.

Saleable properties subject to inspection

Many foreclosures are often in deplorable condition. However, REOs are usually restored to at least a readily salable condition by the bank and evict the tenants, making it attractive to buyers. REOs can also be inspected prior to contract unlike properties at foreclosure auction. You can inspect the property before giving an offer to the bank. You are granted full access to the property and all utilities will be made available for you and your inspector. Most importantly, your deposit is returned and the contact voided if f you’re not comfortable with the condition of the house and do not want to proceed.

Easy low interest financing

One of the best features of REO investing is that buyers can get low interest financing from the same bank which makes the deal highly feasible. Sometimes, property lenders may even be willing to finance the property at less than market value. You may also get loan if you have a good credit record then. Most of the banks require only 10% down payment if the property is to be used as rental.

Fast transaction, more opportunities

Another great aspect of flipping REO properties is that the time spent for your deals is cut in half. There is no need to wait for a bidding to start. The deal moves pretty fast once you’ve agreed on the price. Negations are normally quick as banks have no emotions involved. This means less time on each property and more deals for you to get into.

Did you like this article? Crystal is a single mother who works at home. She shares her experience in the challenges of single motherhood and writes tips to working at home in the Philippines on her blog. She is also an SEO and freelance writer who creates unique articles for various websites.

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