Boomer’s Blog

The news about rising foreclosure rates is persistent in many markets because even the most credible data released drips more red ink than the slasher flick “Nightmare on Elm Street.”

Nowhere is this scary phenomenon more prevalent than in California, where ForeclosureRadar’s recent report on the state’s July foreclosure data reveal that lenders last month took a record $12.55 billion in loans to foreclosure auction.

As long as California is auctioning more foreclosures than McDonalds is selling burgers, real estate investors with an appetite for wealth will want to keep an eye on the distressed property arena.

While many more seasoned investors may may see few direct opportunities in foreclosure markets, news like this accentuates the fact that pre-foreclosure and short sale investing is a strategy likely to experience continued growth opportunities for investors who know how to “work smart” in these markets.

But before we explore our options to revise and refine our short sale strategies, a closer look at ForeclosureRadar’s data will make a great case to support why short sales are likely to grow in appeal for homeowners, lenders and investors, well beyond the golden state’s borders. Confronted with numbers like these, it’s hard to imagine that more lenders won’t make greater efforts to get more short sale deals under their tightening belts.

ForclosureRadar’s California Data Foreshadow National Trends

• In California, July Foreclosure Auction Sales jumped by more than $2 billion in combined loan value to $12.55 billion. This represents more than 1,300 properties being taken to auction each business day, up from 415 daily over the same period last year.
• Notices of Default declined for the third straight month. The total number of properties that are still actively scheduled for auction increased to 64,598 at the end of July, up from 59,973 at the end of June, and 53,793 at the end of May. (Note: Approximately 91 percent of July’s default notices can be attributed to Countrywide Financial Corp. and its ongoing absorption into Bank of America. ForeclosureRadar analysts attribute July’s decline in default notices to this transition rather than a fundamental market shift.)
• Notices of Trustee Sale typically set the auction date and time and usually are recorded 105 days after the Notice of Default. In July, these notices grew nearly 10 percent to 39,010 filings. Comparing this rate to data for Notices of Default, it is evident that fewer homeowners are escaping foreclosure.
• At 97 percent of defaults, July’s Notices of Trustee Sale filings are nearly double the 50 percent that were reported as recently as February. Sales grew to 28,795 properties with a combined loan balance of $12.55 billion. Among them, 27,817 received no bid higher than the lender’s opening bid and became bank, or real estate owned (REO) properties.
• Sales to Third Parties at auction have soared, and in this instance, were up nearly 29 percent since June. Third parties purchased loans with a combined loan balance of $481 million, at an average discount of 39 percent to the loan balance. Despite third party sales spikes, lenders continue to take back nearly 97 percent of all properties sold at auction. Since January 2007, ForeclosureRadar data also demonstrate that lenders have taken back a total of $100 billion in loans.

California’s Foreclosure Data Support ShortSaleology Business Model for Investors
It’s no secret that California’s markets are struggling, as is the state’s overall economy. But since California often sets the pace for the rest of the nation, I thought this information might be useful in proving my point that this is a Brave New World of Real Estate that we’re all dealing in and though our industry runs in cycles, those cycles are taking on new, more exaggerated characteristics which, in may cases, may require new approaches and streamlined investment strategies.

Institutional Failures Alter Predictable Market Cycles
Part of the reason for this is because the economic mechanisms in place to infuse liquidity in the market, such as the government chartered Fannie Mae and Freddie Mac are failing work effectively towards staving off the spread of the foreclosure epidemic.

Most real estate entrepreneurs can see the opportunity to make money here, and although we can see it and smell it, actually tasting the profits may remain somewhat of an abstract notion.

Changing Short Sale Markets Demand that you to Change your Investment Approach
If you’re still struggling to find your pathway to profits in today’s markets, you may need to update your approach and refine your real estate investment strategies. For many, short sale and pre-foreclosure deals are more viable real estate investment strategies now than they have been for a long time in our industry.

As the foreclosure epidemic continues to spread throughout the mortgage lending industry, pre-foreclosure and short sale deals are likely to grow in appeal for lenders, troubled homeowners and real estate entrepreneurs alike.

If you’re using the same “old reliable” strategies for these markets you’ve used in the past, you may be making the most out of your transactions. These markets are changing and savvy investors will adapt to these changes in order to maximize their profits.

Do you Need a Short Sale Strategy Makeover?
If you want to ensure you’re deploying the latest strategies and tactics in your pre-foreclosure and short sale transactions, or if you’re just now diving into this arena, you need ShortSaleology, Cory Boatright’s community-based solution for quickly and cost-effectively bringing your business practices up to speed so you’re always ready to meet the demands of today’s challenging distressed property marketplace.

ShortSaleology is a master-planned, gated on-line community for investors who want to penetrate hot short sale and pre-foreclosure markets. Cory’s intuitive tools, resources and forums were designed specifically to facilitate the traditionally scattered, complicated, time-intensive processes that are typically associated with tapping these markets’ awesome potential.

ShortSaleology Streamlines your Short Sale Deals
Here are some of my favorite features of Cory’s ShortSaleology community. For more of the details, read my review of ShortSaleology in the Resources section of GaryBoomershine.com.

• VIP access to Cory’s expert in-house Lender Negotiation Team;
• Private short sale funding sources for your deals;
• Closing Coordination Services from trained agents
• Lender-specific Short Sale packets;
• Automated pre-foreclosure marketing;
• Comprehensive database of lenders and private contacts;
• A supportive community network;
• Deep discounts on P-NOD (Pre-Notice of Default) leads;
• Access to regularly scheduled members-only conference calls with lively Q&A sessions;
• Discussions and interviews with industry experts on hot trends and emerging developments;
• Ongoing, private education with easily accessible audio and video downloads you can review at your convenience;
• Access to Cory’s private tool kit of tested resources;
• Reviews that provide play-by-play highlights of the hottest deals;
• Member’s-only discounts on existing and new products, and
• Other great perks such as research reports, trend spotting and educational materials for rapid advancement in the short sale and pre-foreclosure investment learning and development curves.

ShortSaleology: Real World Solutions in Real Time
Because it directly addresses some of the most challenging aspects of the short sale process, ShortSaleology provides a unique and interactive community support structure for investors who want to tap these markets without the hassles posed by excessive competition or abrupt changes in lender policy that could quickly throw a monkey wrench in the deals you so painstakingly constructed on your own.

Generate Mantle-Worthy Spreadsheets
By providing seamlessly integrated automated processes, coaching and community forums with all the other resources you need to get your deals done quickly and effectively, ShortSaleology frees you to focus on the deals you want to make, and helps you to produce numbers that’ll make you want to frame your spreadsheets. It’s a great solution for individuals and companies who want to focus on the deals rather than on the busy work.

This entry was posted on Monday, August 18th, 2008 at 7:23 pm and is filed under Boomer's Picks, REI Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.