WHY THE REO MARKET HASN’T PEAKED YET!

I started specializing in REO (Real Estate Owned, i.e. foreclosed) property sales long before the current foreclosure boom – but all that experience didn’t prepare me for the record-setting REO numbers in 2008. Suddenly, my profitable small real estate niche was dominating the headlines – and the housing market!

The first wave of massive foreclosures was widely blamed on bad subprime loans – mortgages given to buyers with less-than-wonderful credit and, frequently, unverified income – mostly because everyone assumed the housing market would continue to skyrocket and everyone would continue to make money.

When the opposite proved true, these were the first mortgages to go down the drain – because, sadly, the homeowners in question couldn’t afford them in the first place.

If you saw the recent “60 Minutes” report on CBS, however, you found out that there is another giant foreclosure wave on the horizon – because of a different kind of mortgage that also turned out to be a ticking time bomb.

These mortgages were supposed to be of higher quality and nothing like the disaster of the subprimes. Again, however, they were structured with only the thought of higher housing prices continuing in mind. The homeowner paid a lower monthly payment the first few years of the mortgage – but then it jumps up three or four years down the line to such an extent, that, in some cases, the payment almost doubles!

Obviously, in today’s woeful economic times, and with the housing market in freefall, that’s yet another recipe for disaster. We’re just at the beginning of that foreclosure wave – which means 2009 has the potential to be worse than 2008 when it comes to REO’s.

All this means REO sellers, including banks, lenders and asset management companies, will need more REO pros, such as agents, brokers and contractors, than ever before. Which is why I started the American Society of REO Specialists at ASREOS.com.

This is the first trade association of REO vendors founded by REO experts. It’s a great resource for REO sellers who need agents and contractors to handle their properties – and a great opportunity for REO vendors to get exposure, interact with other REO vendors and get exclusive inside information on the latest REO secret strategies from myself and other top REO agents.

It’s unfortunate the housing market has come to this, but it’s also important to take care of REO properties as quickly and efficiently as possible. There’s still a lot of money to be made in real estate because of them, and keeping business going is a vital part of getting our economy back on track. ASREOS.com is dedicated to making that happen.