Thursday, March 8, 2012

5 best banks to buy REOs from!

Octavio Nuiry has researched and discovered the best banks to buy from in the current foreclosure crisis.  The answer to the number one bank was somewhat surprising.  It's name is a little less familiar than its secondary and tertiary competitors.  
The rankings seem to have one main correlation in regards to why they rank in the places they do.  That factor is price.  Ally bank seems to be more accurate with its BPO (broker price opinion) than the other banks which leads to a lower sales price.  The lower sales price leads to lower days on market.  The lower days on market lead to less inventory, which ultimately leads to a bank with less bad paper, which leads to a recovering national bank, which leads to a recovering economy.
All I can say is "get on board big banks!"

More than 644,000 bank-owned properties nationwide give buyers ample inventory to choose from. But not all bank-owned purchases are created equal; some banks sell more quickly and offer bigger discounts. But which are the best banks to buy from? What lenders offer the best deals? Which servicers sell their REOs fastest?
To help buyers sort through this vast bank-owned REO maze, Foreclosure News Reporthas analyzed RealtyTrac foreclosure sales data from the fourth quarter of 2011, broken down by lender, to provide a list of the best banks to buy a foreclosure from. To come up with this list we started with lenders that sold more than 1,500 REOs during the quarter and then used a combined ranking of the lenders with the highest percentage savings and the shortest times to sell REO properties to come up with the final list.
1: Ally Financial (Formerly GMAC)
 Avg. REO Sales Price: $60,254
 Avg. Percent Savings: 60%
 Avg. Time to Sell: 104 days
2: Wells Fargo
 Avg. REO Sales Price: $83,530
 Avg. Percent Savings: 43 %
 Avg. Time to Sell: 157 days
3: Citigroup
 Avg. REO Sales Price: $68,406
 Avg. Percent Savings: 49%
 Avg. Time to Sell: 167 days
4: U.S. Government
 Avg. REO Sales Price: $93,941
 Avg. Percent Saving: 30%
 Avg. Time to Sell: 187 days
5. JPMorgan Chase (Tie)
 Avg. REO Sales Price: $98,864
 Avg. Percent Savings: 41%
 Avg. Time to Sell: 203 days
5. Bank of America (Tie)
 Avg. Sales Price: $120,801
 Avg. Percent Savings: 27%
 Avg. Time to Sell: 187 days
Relationships matter
“To me, it really doesn’t matter which lender I’m dealing with,” said California REO investor Tony Alvarez, who said he buys one bank-owned REO every week and owns 51 REO rentals. “I’m more interested in the relationships I develop with the REO listing brokers. That’s what important to me. Relationships matter to me.”
Alvarez, who has been buying REOs in the Antelope Valley since 1981, targets pending REO listings because he knows that about 40 percent of those deals fall out of escrow. He writes back-up offers on pending REO sales and waits for them the deals to unravel. When they do, he’s there to pick up the deal.
“When an REO falls out of escrow three times, the rule book goes out the window,” said Alvarez, author of Breaking into the REO Business. “Once you get to the third time a deal falls apart, something magical happens. Then, everybody’s flexible.  The asset manager, the negotiator, the listing agent and the bank suddenly want to make a deal happen.”
REOs rising
Frank DeNovi, an REO broker in Chicago, Ill., said bank-owned inventory is rising in suburban Chicago, and he’s noticed a sizable increase in higher-end REOs in suburban Chicago in the $800,000 and above range.
“We’re seeing an uptick in REO units in the last 60 days,” said DeNovi, a 27-year REO veteran who works with Coldwell Banker in Chicago’s northwestern suburbs. “These new units should be hitting the market in 30 to 60 days. We’re also seeing an increase in higher-end REOs in the $400,000 to $800,000 range.”
Representing Fannie, Freddie and 22 other clients, DeNovi said he expects volume to increase 30 percent in 2012. He said the REO paperwork from lender to lender was very cumbersome, but he said the disposition of REOs was slowly moving online, streamlining the sales process.
“Fannie is in the process of automating their REO field service and putting everything online,” said DeNovi, whose seven-person team sold 300 REO properties last year. “We love to see more of that. The process is getting more sophisticated.”
By Octavio Nuiry

1 comment: