I keep hearing about the second wave of foreclosures. Has it started yet, what volume of properties are we

Asked by Tommy Ambrosio, Ft Myers, FL Tue Jul 21, 2009

talking about and in what price range can we expect these properties to be in? Will this wave bring prices down again? The word is the buyers have been there for the first wave, are those buyers end users? As a builder and small investor I appreciate all the feedback on this site from the professionals in the trenches

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Merilee L Getty’s answer
Merilee L Ge…, , Cape Coral, FL
Thu Jul 30, 2009
There is most definitely going to be another wave. Taking a look at the Court calendar in Lee County let alone all the Lis Pendens there has been, we will be looking to more and more on the market. Coming from a banking background and knowing how many option arm loans that were written, we still have not seen the sleuth of loans that will be coming up for adjustment. Some people have forgotten about all of those deals. The Banks are currently buried with these loans and when looking to do a short sale, for a small investor, the big secret to it all, is make sure the package that your Realtor or lawyer is sending in has everything needed to be processed immediately. I have found that in my business now, that when the banks see a package coming through wit GFS, it will go to the top of the pile because they know that everything will be included to make a proper decision. It is all about paperwork. Honestly. Even when I worked for a very large bank in origination, the underwriters were the same way. If a file is complete, it will be looked at. If not, it goes to the bottom of the pile and you are looking at a time game.

Merilee L. Getty
Gulfcoast Foreclosure Solutions
mgetty.gfs@gmail.com
239-738-2247 or 239-673-7810
0 votes
Keith Sorem, Agent, Glendale, CA
Tue Jul 21, 2009
Tom
I think that it would be very hard to prove that the banks are in fact "holding" listings.

When they have an REO it has a very negative affect on their balance sheets and deprives them of capital that could be used to make new loans. We have asked lenders in our area and the same answer it "they are coming".

Well, they'd better. We are down to only a three month supply of homes.

Truthfully we are at the point where the Realtors think that the lenders are so overwhelmed with these foreclosure/short sale/loan mod problems that the BEST they can do is to trickle the listings on the market. They would put them on the market sooner, freeing up capital to make new loans, which would be a far better use of capital than tying it up in REO inventory.
0 votes
Sarah Garrett, Agent, Fort Myers, FL
Tue Jul 21, 2009
Hi Tom,
There is no such thing as a second wave. It is an on going perpetual motion that has no end in sight. New Foreclosures are coming on just as fast as the banks can process them. The cash buyers are coming in to buy them up just as fast as we can sell them. There is a steady stream of short sales that have not sold or are not selling that is keeping the tide rolling in as well. Because the outgoing inventory is selling faster than the new foreclosures coming in and sustaining this area in record high sales I would doubt very seriously if you see prices dropping except for the fixer uppers and Chinese drywall homes. The same foreclosure house you could buy 3-4 months ago for $50K is now going for $75K and so on. As a matter of fact I checked on two properties last night that were purchased the first quarter for $42K and $53K that just resold for approx. 51% return less realtor fees. Not a bad chunk of change for a few months of a little sweat equity. I am seeing even greater profits than that coming down the road if you are buying now. Let me help you when you are ready. Look for your buying criteria at http://www.swfloridahomebuyer.listingbook.com and you will be excited by what you see on the Florida Gulfcoast MLS.

Sarah Garrett, Realtor
ALLIANCE REALTY GROUP
"Chosen Best in Client Satisfaction 2006-2009"
sarahgarrett@argfl.com
239-464-8620
0 votes
Mark Washburn, Agent, Cape Coral, FL
Tue Jul 21, 2009
No we have not seen an increase in foreclosure volumes or "second wave" of foreclosures yet in Lee County. There still is a significant backlog of foreclosure cases to be worked through by the court system. About 2 weeks ago it was reported by the News-Press that over 24,000 foreclosures were still pending in Lee County: http://www.gulfreturns.com/2009/07/lee-county-foreclosure-ro…

Economists are concerned that stimulus programs programs that encourage lenders to delay foreclosing and work with distressed homeowners will be expiring in the near future. If these programs are not renewed, there is concern that foreclosure filings could increase significantly: http://www.gulfreturns.com/2009/07/experts-predict-foreclosu…

With regards to your question about end-user vs. investors absorbing current inventory of foreclosures, in May 2009, 64% of the single-family home closings in Lee County were cash transactions. This cash dominated market points to an investor class of buyers.
Web Reference:  http://www.gulfreturns.com/
0 votes
Steve Koffm…, Agent, Cape Coral, FL
Tue Jul 21, 2009
Dear Tom,

We have been getting what appears to be the beginning of the second wave over the last 2-3 weeks. We have approximately 15-20 new foreclosures that have started their pre-listing process since the end of June. I do not know how many will come through or how long they will last but there is an uptick right now. My team works with Wachovia, Bank of America, Ocwen, Fannie Mae, National Credit Union Administration and others. If you have any additional questions please feel free to call or email. If you want to search the MLS you can do so at http://www.SKoffman.CapeCoralHomesNow.com. Good luck, there are a lot of people doing what you are trying to do.

Steve Koffman
Century 21 Sunbelt
#1 Century 21 team in Florida, #3 team in US 2008
Steve@Koffman.com
239-443-2463
Web Reference:  http://www.Koffman.com
0 votes
Bill Eckler, Agent, Venice, FL
Tue Jul 21, 2009
Tom,

The "second wave" of much anticipated foreclosures, has indeed not surfaced. We can expect that the banks will continue to employ the "trickle" effect in releasing these properties in an effort to minimize the shock on the real estate market. While the government continues to try to figure out how to stop the bleeding and keep families in their homes....possibly one of the biggest problems this country has faced in modern times.
0 votes
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