# Interesting news



## Splinterpicker (Apr 18, 2012)

I talked to a realtor who said mid year July first we could be looking for a new vocation. ALL properties are going to be occcoupied and the properties are going to be short sold ! cutting us out of the picture. It does not suprise me as FAS has cut the pricing way down and on some items expect us to go backwards !! Yes backwards. Seems like they (FAS) are milking this cow and when it happens ( I hope it does not) mid year they wont have to worry, as tehy have beat us down enough to cover their asses. They are just an OPM company. They have NO operating costs as they get their money up front. SO we are funding their company. OOPS and OPM company is AN "Other Peoples Money" company.

Anyone else caught wind of this ??:whistling


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## Guest (Mar 6, 2012)

Up this way we have lots of tenant occupied work from FAS.

Bids are turning around real quick from FAS.Its crazy they always try to cut my plumbers estimates,but just the other day they paid more for me install space heaters than what my plumber wanted to get the heat running.


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## Guest (Mar 6, 2012)

What the "rumor mill" is.....the first option after filing foreclosure is for the realtors to find the occupants and offer the tenant access option as the first choice OR the foreclosure will proceed. 

Mixed feelings on this.....


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## mtmtnman (May 1, 2012)

Good way to get the properties trashed further. No stake in the game. Why take care of it!!!


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## APlusPPGroup (Apr 14, 2012)

mtmtnman said:


> Good way to get the properties trashed further. No stake in the game. Why take care of it!!!


I agree wholeheartedly. The rents on most of these are very, very low and so are the deposits. They can trash them and walk away and not lose much in the process.

We are already posting signs and securing these properties. Most are already trashed or falling down and there's no indication that the banks are going to clean them up before they rent them out. Time will tell.

Something to consider, though.......... In California, a landlord only has 21 days to produce receipts for cleaning and damages, once a tenant moves, or they have to return the deposits. No doubt other states have landlord/tenant laws that are similar.

I can see these rental situations backfiring on the banks big time. If they're not concerned about cleaning them up now, I highly doubt they will clean them up when the tenants move. 

They will be destroyed even further and those tenants will still get their deposits back. And, most likely, after months of not paying rent............ unless there's a clause in the agreement that deposits will be used towards unpaid rent.

Linda


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## SwiftRes (Apr 12, 2012)

I haven't been involved/informed on this rent situation on REOs. 

Correct me if I'm wrong, but I'm hearing both that the banks have to honor existing leases if the landlord is foreclosed on, as well as that the banks are renting REOs? What prevents the rent price in the first scenario from being well below market?


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## APlusPPGroup (Apr 14, 2012)

SwiftRes said:


> I haven't been involved/informed on this rent situation on REOs.
> 
> Correct me if I'm wrong, but I'm hearing both that the banks have to honor existing leases if the landlord is foreclosed on, as well as that the banks are renting REOs? What prevents the rent price in the first scenario from being well below market?


If they honor the existing lease, they have to honor the existing monthly lease amount. They can't break one part of an agreement and honor the other.

They do have the option, however, to offer a new agreement. The tenant has the option to say no, though, and hold the bank to the existing contract.

Is that what you were asking?

Linda


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## SwiftRes (Apr 12, 2012)

Yes, it does somewhat, but my question is what prevents the homeowner/landlord from leasing a $200k home to a friend for $500/mo for 2 years while they are in the foreclosure process?


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## APlusPPGroup (Apr 14, 2012)

SwiftRes said:


> Yes, it does somewhat, but my question is what prevents the homeowner/landlord from leasing a $200k home to a friend for $500/mo for 2 years while they are in the foreclosure process?


I'm sure it's been done and I'm sure banks have been forced to honor the agreements. Until the bank actually takes possession of the property, by eviction or a cash for keys move out, the owner/landlord can draft any kind of lease agreement he likes for whatever terms he wants, with regard to length of time and amount.

To me, it doesn't seem like it should be legal but it is. Sure does speak to the morality of the owner/landlord, tho.

And along those lines, as long as it's in the contract that the tenant/friend can sublet the property, there's nothing keeping the owner/landlord from moving back in and paying the lower fees to the bank.

Linda


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## SwiftRes (Apr 12, 2012)

Agree with the morality piece, but I've seen about everything. Investors purchasing short sales has been a bad one sometimes. When I was an RE agent there were some BPOs you would avoid as you knew the investor would meet you there and hound and pressure you into putting in the BPO well below market value so they could scoop it up cheap.



a1propertyclean said:


> I'm sure it's been done and I'm sure banks have been forced to honor the agreements. Until the bank actually takes possession of the property, by eviction or a cash for keys move out, the owner/landlord can draft any kind of lease agreement he likes for whatever terms he wants, with regard to length of time and amount.
> 
> To me, it doesn't seem like it should be legal but it is. Sure does speak to the morality of the owner/landlord, tho.
> 
> ...


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## APlusPPGroup (Apr 14, 2012)

SwiftRes said:


> Agree with the morality piece, but I've seen about everything. Investors purchasing short sales has been a bad one sometimes. When I was an RE agent there were some BPOs you would avoid as you knew the investor would meet you there and hound and pressure you into putting in the BPO well below market value so they could scoop it up cheap.


When you do BPOs, your obligation is to the bank/client. If I were doing them, investors could hound all day long and not get anywhere at all.

If you drop the value on that house to accommodate an investor, not only are you a party to [possible] conspiracy to defraud the bank but devaluing one house affects the entire neighborhood.

Linda


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## Guest (Mar 6, 2012)

OH its happening alright! IN MN we saw this all the time to delay the bank from taking possession. 

Rent home to friend for $400/month when the loan payment was $2000/month and the bank has to abide by this lease. Funny thing is that I have seen leases for 5 years and well below market rate. Deal of a lifetime! 

Then to make it worse...the original homeowner gets a HUGE deposit paid to the homeowner. Its on craigslist happening all the time. 

Had a Doctor went back for a Surgical Residency at U of Iowa and the day we were changing locks his Atlas Moving Lines Semi trucks pulled up (2) and 2 mercedes and they wanted to know WTH was going on....Well so did we! He met the moving trucks after moving from Florida to complete the Surgical School and had a lease for 6 years. WFHM made us change the locks back to an unknown code. He lived there for 18 months without paying a nickel in rent since he knew nobody to pay it to. 

Sweet deal on a $500,000 house (in Iowa that is a mansion at that price)


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## SwiftRes (Apr 12, 2012)

Agree 100%. But when you are making $75 for an interior BPO it's much easier money when there is no one at the property, so naturally you avoid the difficult ones. I am sure there are some agents that did it, though, as I know of some cases where short sales went well below what they should have. 

I have also been involved in some, though, in which they should have been approved but didn't. I was selling a short sale back '04/'05 in which the seller owed $90-$95k. We had a buyer at $85k, tried to get the bank to agree to $75k, they wouldn't do it. Bank foreclosed, got property, sold about 6 months later for $45k. The previous homeowner had some "do it yourself" unfinished remodels that caused water damage.



a1propertyclean said:


> When you do BPOs, your obligation is to the bank/client. If I were doing them, investors could hound all day long and not get anywhere at all.
> 
> If you drop the value on that house to accommodate an investor, not only are you a party to [possible] conspiracy to defraud the bank but devaluing one house affects the entire neighborhood.
> 
> Linda


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## APlusPPGroup (Apr 14, 2012)

These are potential investors, right? 

You could have told them that your insurance won't allow anyone on the property but you. I do it to keep nosy neighbors from coming in and looking around while I'm trying to do my job. 

Until the investor owns the property, he's trespassing if he sets one foot on it without agent representation. Now if the investor is also an agent, I'm not sure how you'd handle that. My guess is there would still be some sort of protocol he/she has to take care of to gain access.

Linda


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## SwiftRes (Apr 12, 2012)

He would have homeowners permission. On these particular BPOs we'd have to call the seller to setup a time to come through the home, as they still owned the home, and often times still occupied it.



a1propertyclean said:


> These are potential investors, right?
> 
> You could have told them that your insurance won't allow anyone on the property but you. I do it to keep nosy neighbors from coming in and looking around while I'm trying to do my job.
> 
> ...


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## APlusPPGroup (Apr 14, 2012)

SwiftRes said:


> He would have homeowners permission. On these particular BPOs we'd have to call the seller to setup a time to come through the home, as they still owned the home, and often times still occupied it.


What a drag. So the homeowners must have pre-arranged to contact them when they set up the appointment with you. I was under the presumption you were talking about vacant properties.

Linda


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## SwiftRes (Apr 12, 2012)

Yeah, the investor would typically contact the sellers at some point durign foreclosure and then be the buyer on the purchase agreement. The investor helps the sellers submit the PA to the bank and facilitate the short sale process. The sellers were only concerned about getting rid of the house, they didn't care the price.



a1propertyclean said:


> What a drag. So the homeowners must have pre-arranged to contact them when they set up the appointment with you. I was under the presumption you were talking about vacant properties.
> 
> Linda


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## GTX63 (Apr 12, 2012)

Renting out these properties at below market rates will kill the market.
Rental markets are better these days due to more former homeowners and tighter lending, but it can't hold up if it has to compete with the government on rents and tenants. Section 8 and subsidized housing is another animal altogether.


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## thanohano44 (Aug 5, 2012)

GTX63 said:


> Renting out these properties at below market rates will kill the market.
> Rental markets are better these days due to more former homeowners and tighter lending, but it can't hold up if it has to compete with the government on rents and tenants. Section 8 and subsidized housing is another animal altogether.


This is how socialism takes over. The government has their hand in a lot of these.


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## reoguys (May 25, 2012)

It is my understanding that the lease agreement must pre-date the NOD date, at least in California. It is also my opinion that the REO turned rentals by the banks are going to backfire on the banks. The banks are just looking for ways to get richer by holding onto the real estate in a down market and generate revenue in the meantime by becoming the landlord (what the investors are doing). When the market rebounds, because it always does, they feel they will be in a good position. In their estimation, it is a win-win for them. It's a business decision just like it was a business decision with the lending frenzy with NINJA loans (no job, no income, no assets) and they knew they were going to make their money on bad loans.


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## reoguys (May 25, 2012)

Most BPOs these days are drive by's because of obvious reasons, one being the hostility towards the bank. There's a whole industry of BPO generating companies making tons of $. 

A good number of short sales are pre-arranged. Everyone's being "creative" since there's no help coming from the banks. 1) The bank will not modify the loan so the seller tries to the short sale route. 2) The bank will rejects legitimate short sale offer (many times ALL CASH). 3) The bank will then turn right around and sell the same property as an REO for LESS than the all cash offer! 

The reasons are varied, but one is because it is in the bank's best interest to foreclose, especially if the loan is insured (private mortgage insurance). Other reasons are just complete stupidity as the REO department and the short sale department do not communicate with each other. So, we have "creative" homeowners short selling the property to a friend for market value (which the bank could have agreed to in the first place!) and renting back from the friend and staying in their home with payments they can afford.


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## david (Apr 11, 2012)

*re*

if the original owner of the property could'nt pay the mortgage ,how they think their gonna get rent out of them?


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## APlusPPGroup (Apr 14, 2012)

d+jhomeservices said:


> if the original owner of the property could'nt pay the mortgage ,how they think their gonna get rent out of them?


Think about it. Owner/Mortgagee leases the house to a friend for 1/4 to 1/2 of what his mortgage payments are and stops paying the mortgage.

When the bank forecloses on the property, they are forced to honor the lease agreement. If there is a sublet clause, the person the house is leased to, sublets it to the original owner at the lower rate in the contract.

It's too easy for people who have decided to let their houses go to draft a binding contract like that well ahead of time. Then they live in the house payment-free until the bank takes it back, then end up paying ONLY the amount in the lease.

Linda


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## thanohano44 (Aug 5, 2012)

a1propertyclean said:


> Think about it. Owner/Mortgagee leases the house to a friend for 1/4 to 1/2 of what his mortgage payments are and stops paying the mortgage.
> 
> When the bank forecloses on the property, they are forced to honor the lease agreement. If there is a sublet clause, the person the house is leased to, sublets it to the original owner at the lower rate in the contract.
> 
> ...


This is a huuuuge practice going on in Utah and Arizona the past 3 years.


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## APlusPPGroup (Apr 14, 2012)

The only way out for the banks is to offer a HUGE CFK settlement to break the agreement and move the occupants out.

Problem is, the owner/mortgagee created the lease agreement to keep "rent" low for years and won't agree to CFK unless the bank REALLY makes it worth their while.

It's a shame that people feel the need to cheat. Regardless of how legal it is, it's still morally wrong and they know it.

Some people just feel as if the world owes them something just because they exist.

Linda


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## Gypsos (Apr 30, 2012)

thanohano44 said:


> This is how socialism takes over. The government has their hand in a lot of these.


Perface... Not trying to be political here.

If you want to read a book that will open your eyes it is called "Seduced By Hitler."

It tells exactly how Hitler and the Nazi's were able to take over Germany, Austria, France and other nations with the cooperation and support of the existing government and most of the population. I am about 3/4 through it and am seeing scary similarities between how our government is doing things today and how the Nazi Party did things in the 1930's.


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## thanohano44 (Aug 5, 2012)

a1propertyclean said:


> The only way out for the banks is to offer a HUGE CFK settlement to break the agreement and move the occupants out.
> 
> Problem is, the owner/mortgagee created the lease agreement to keep "rent" low for years and won't agree to CFK unless the bank REALLY makes it worth their while.
> 
> ...


Oh yeah. Cfk takes about 90 days. Evictions takes 120+. Lots of folks in AZ just deny the CFK offer and live for free for 6 months or more.


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## BPWY (Apr 12, 2012)

reoguys said:


> It is my understanding that the lease agreement must pre-date the NOD date, at least in California. It is also my opinion that the REO turned rentals by the banks are going to backfire on the banks. The banks are just looking for ways to get richer by holding onto the real estate in a down market and generate revenue in the meantime by becoming the landlord (what the investors are doing). When the market rebounds, because it always does, they feel they will be in a good position. In their estimation, it is a win-win for them. It's a business decision just like it was a business decision with the lending frenzy with NINJA loans (no job, no income, no assets) and they knew they were going to make their money on bad loans.











That might be a good plan if the market actually comes back.

With the current politicians leading this country over the cliff at break neck speed there may not be a come back for a very long time...... if ever. 


Eventually the country itself will be bankrupt and then what??
I bet property values in Greece aint jack **** right now.


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## BPWY (Apr 12, 2012)

thanohano44 said:


> Oh yeah. Cfk takes about 90 days. Evictions takes 120+. Lots of folks in AZ just deny the CFK offer and live for free for 6 months or more.






I did a few CFKs for Altisource.


Some of the occupants would actually figure up what they could make staying rent free to thru the length of the right of redemption versus the CFK offer. 

They'd counter offer the amount that rent would cost them if they moved early.
Of course they weren't approved.


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## thanohano44 (Aug 5, 2012)

BPWY said:


> I did a few CFKs for Altisource.
> 
> Some of the occupants would actually figure up what they could make staying rent free to thru the length of the right of redemption versus the CFK offer.
> 
> ...


I've never heard of a counter offer ever being approved. Fifth and third bank puts the smack down on the customers if they want to get more that offered. The broker is already taking photos during that process in case the occupants do anything. But I really don't see the point of pursuing someone who has nothing. Usually, someone would have to have $5000 in assets before a bank would proceed with legal action.


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## reoguys (May 25, 2012)

Then we'll all be working for the Chinese ... no offense.


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## REO2Rentals (Sep 18, 2012)

reoguys said:


> Then we'll all be working for the Chinese ... no offense.


Oh! Ahhhhhh! We LOVE to haggling:thumbup:

Haggling (bargaining) is common in some countries, such as China, Turkey and Egypt. If you don't haggle, it is highly likely that you will get ripped off, because vendors expect a bit of haggling and state their prices higher than what they expect to receive - Often it is said that "everything is negotiable" :thumbup:


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## BPWY (Apr 12, 2012)

thanohano44 said:


> I've never heard of a counter offer ever being approved. Fifth and third bank puts the smack down on the customers if they want to get more that offered. The broker is already taking photos during that process in case the occupants do anything. But I really don't see the point of pursuing someone who has nothing. Usually, someone would have to have $5000 in assets before a bank would proceed with legal action.








When I first started with altisource they were the same way. But in '11 they became a kinder gentler version of themselves and would approve like $1500.


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## SwiftRes (Apr 12, 2012)

I did a $2000 one a couple weeks ago. Maybe $90k house.



BPWY said:


> When I first started with altisource they were the same way. But in '11 they became a kinder gentler version of themselves and would approve like $1500.


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