Wednesday, October 26, 2011

Looking to invest in real estate? Do your homework first…

With a vast and seemingly unending amount of knowledge at the simplicity of our fingertips, making an educated decision about nearly anything can be as easy as typing www.  Now a days, almost everyone googles whatever is unknown to them.  I am guilty of internet searching even with friends at dinner when no one seems to have an answer for the trivia being discussed.  When it comes to any type of investing, researching an investment vehicle is everyone’s first step to making an educated decision on what to invest in and how to go about doing so. 

When it comes to investing in real estate, one thing is certain…. What you are purchasing is not going anywhere, literally.  The great aspect of buying real estate is that you have a tangible asset. While values may change increasingly or decreasingly, the asset will always be there.  The key to a solid investment is to know about the variables that will affect the asset you are acquiring.  There are many variables that directly and indirectly influence the marketability of a property.  Some to consider are school districts, access to highways, convenience to shopping, vicinity to recreational accommodations, and proximity to health care facilities.   

To most, the aforementioned variables are elementary to the avid investor.  There are so many other demographics that most fail to research that can greatly impact the success of an investment besides the typical guidelines. 

A great place to begin your research is a website called This website should be stored in your favorites bar if you are a real estate investor.  Everything there is to learn about a state, county, city and subdivision can be examined here.  

Here is an example:

You can type in a search for Euless, TX.  If you are a landlord and are looking for a great are to buy long term income generating property, this would be a great area to consider.  On city-data, it states that “Euless is above the state average for rentals vs. homeowners.”  Also, city-data shows that the main 2 types of occupational industries are transportation and manufacturing (indicating a high index of blue collar workers who are typically renters).  Another indicator that this area would be a great location to consider owning rental property is the fact that every 3 out of 4 home loan is denied.  The population growth rate is 16% over the last 10 years. With this information it is safe to assume that many people want to live here, but few are able to purchase a home.  This makes for a perfect storm if you are a landlord.  Below is a link with more information about the city of Euless.

Another great website to check out is the Texas A&M website at There is a plethora of information with projections of population growth, long term civil engineering plans for highways and high impact zoned projects.  Here you can learn of highway expansions such as 377 and the impact it is going to place on areas such as Granbury and Stephenville.  This type of research can lead to making a sound decision on where to buy land.

There is an unending amount of information available to make a smart decision every time you look for tips on investing.  If what is found seems to be overwhelming, always seek the guidance of professional service.  There are investment real estate specialists in nearly every metropolitan area that are more than willing to assist and educate.   

Wednesday, October 19, 2011

Default Service Departments of Ocwen, GMAC, and CITIMortgage far outperform larger entities

This is a great article below regarding the productivity and performance for the default servicing companies  of non performing loans. It seems to be a direct correlation as to the limitations its competitors possess as a stronghold against who may purchase and how these bad assets may be purchased.
Banks that are under performing to servicers such as Ocwen, GMAC, and CitiMortgage are Bank of America and Fannie Mae.  There is evidence pointing to strict guidelines aimed at preventing fraudulent transactions occurring on the resale of the property from investors as the cause to the decreased production of their REO department.
While intentions may be good, these limitations are deferring investors, the only purchasers capable and willing to buy properties in a distressed state, with cash.
Such limitations from Fannie Mae include a 15 day wait period for investors to present offers and a limitation of a re-sale price of more than 120% after the first 90 days of purchase.  While investors struggle with the adjustment of Fannie Mae, They are presented with more stonewalling from Bank of America.  BofA has completely limited the transfer of deed for all foreclosures for 90 days, period.  This has got to be the exact reason for decreased productivity for BofA's REO re-sale department.  
For now, investors are paying more attention to Banks with less restrictions and will continue to do so.  It would be in the best interest of other banks to follow suit and release such outlandish restrictions before they are left with more shadow inventory creating a larger bubble ultimately causing an out of control downward spiral of bottoming out values of homes.......

Amid a challenging environment for servicers, CitiMortgage, GMAC, and Ocwen have outperformed major competitors – Bank of America and Chase – with regards to loss mitigation and foreclosure timelines, according to a recent report from Moody’s.
Moody’s Investor Service’s Servicer Dashboard for the second quarter of 2011 rates major servicers for their performance over the year from June 2010 to June 2011.
Bank of America’s and Chase’s performances were affected by large servicing acquisitions and foreclosure moratoria resulting from robo-signing investigations, according to Moody’s.
Moody’s Current to Worse Roll Rate measures the percentage of loans that start the year in current status and end the year delinquent, in default, or in foreclosure.
At 4.3 percent, CitiMortgage ranked best for Current to Worse Roll Rate for jumbo loans, a sign of their “working with imminently defaulting borrowers prior to delinquency and their use of short-term loss mitigation programs for borrowers in early stages of delinquency,” according to the report.
GMAC ranked first for both ALT-A and subprime loans, and Wells Fargo ranked second in Current to Worse Roll Rate for jumbo, ALT-A, and subprime loans.
“Wells has strong staffing ratios, allowing them to manage large volumes of loans and reduce the number of current loans that slip into distress,” states the report.
BofA ranked fourth for all three loan types, and Chase fell into last place for all three. The Current to Worse rates were highest for subprime loans – 25.8 percent of Chase’s current subprime loans were delinquent, in default, or in foreclosure, while 21.7 percent of BofA’s subprime loans fell into one of these categories by year-end.
Moody’s attributes these rankings to both bank’s servicing portfolio acquisitions.
In terms of curing default, Citi, GMAC, and Ocwen performed well. Moody’s notes that Citi and Ocwen both have their own default servicing systems with modification programs, which allow them to modify loans for more borrowers.
Moody’s also points to Ocwen’s and GMAC’s low modification re-default rates, which it attributes to the fact that these banks have consistently verified borrowers’ financial information before allowing them to enter trial modification periods.
As with Current to Worse rates, Chase and BofA showed a weak performance in loss mitigation.
Moody’s was not the first to note shortcomings in BofA’s and Chase’s loss mitigation efforts. When the Treasury scored servicers for their HAMP performance, the only two servicers categorized as needing “Substantial Improvement” for both the first and second quarters of this year were Chase and BofA.