Bank REO's

[Real Estate Seller]

We got a call today from a REO manager and he said they are unloading REO's at a unheard of price in Georgia. Have anyone else heard of this?

[Gold River]

Hi,

    Are you complaining that prices might be at investor purchase prices? Congradulations Georgia lenders are finally trying to be proactive about moving REO properties off their books!

California, Arizona, Nevada and Florida have been moving properties for years fairly reasonable if they can't get a retail buyer in 60 to 90 days!

It doesn't surprise me considering lenders are forced to keep 4 times the original defaulted loan amount in reserve against a REO property until it is off there books, and these lenders do not recieve income against this money!

$100k - Defaulted mortgage
$400k - Cash reserve required by the feds
$500k - @10% = $50k per year or $4,166 dollars per month in lost revenue

So if a lender sit's on this property trying to find a retail buyer and has to have it empty for say 6 or 8 or 12 months, they lose this opportunity to loan this money for real estate, credit cards or business lines of credit! (Average 10% return on diversified investment portfolio of real estate, credit cards and business lines of credit.)

So it's cheaper for the lender to take 75%, 60 days later rather than sit on the asset which cost's the lender money!
We have not included cost's of the banks property insurance against the property, upkeep, cash for keys, the foreclosure cost's, trashouts, etc, etc.

No wonder lenders are deciding it's easier and cheaper after 60 to 90 days without offers to take 75%, 65% or 50% to get the property off the books!

Now you know why lenders need you as an investor and don't feel shy about putting a cover letter on your offer pointing out just what needs to be done on the property and why it's best to sell to you for 1 cents!!! lol


                    GR