Bank repossessions – the actual foreclosure on a home and conversion to an REO (Real Estate Owned) property – hit a record high in May 2010 for the second month in a row, according to foreclosure experts RealtyTrac. Lenders repossessed a total of 93,777 homes, a 1 percent jump from April and a 44 percent rise from May of last year.

At the same time, new foreclosure activity dropped slightly month-to-month (but was still up from May of last year). Experts, however, see that small decline as a sign that banks are too busy dealing with old foreclosures to begin new ones.

According to Rick Sharga, senior vice president of RealtyTrac, “…the lenders are focusing on processing the delinquent loans they already have rather than initiating new foreclosures. They’re managing inventory to prevent a free fall in home prices.”

Real estate analysts have long expected REO owners to be forced to finally deal with this “shadow inventory” of REO properties, which some estimate to be in the millions. Over 3 million homes are expected to receive foreclosure notices during 2010, up from 2009. In May, Nevada continued to have the highest foreclosure activity and Vermont the lowest of the 50 states.

How will the banks manage this giant backlog of REO homes? Bank of America is reportedly encouraging short sales and other foreclosure alternatives, but that still will not stave off the sheer volume of foreclosures coming through the pipeline.

“It won’t be enough to offset all the loans coming through foreclosure,” says Bob Caruso of Lender Processing Services. “The volume is still coming through so heavily that short sales will only be a small fraction of the loans coming through.”

In addition, the government’s Home Affordable Modification Program (HAMP), which was supposed to help homeowners avoid foreclosure and subsequent conversion to REO properties, has been shown to only postpone the inevitable. That will drive more foreclosures in the coming months. HAMP has also tightened up its criteria, making it more difficult for homeowners to participate, due to the high failure rate of the program to date.

All of the above data continues to confirm that REO listings will continue to be on the rise through throughout the rest of 2010, as well as 2011 and beyond. Almost half of all potential homebuyers are specifically interested in purchasing an REO home because of the value and REO sales are expected to be double what they were last year.

More and more REO professionals will continue to be in demand to handle these specialized property transactions in the months to come. Training to become an REO agent and learning how to get REO listings will be an excellent career choice as another recession currently threatens America in the coming months.

One valuable resource for both experienced and novice REO agents is ASREOS. ASREOS (the American Society of REO Specialists) is the first professional association for REO Agents created by REO professionals and contains numerous tools to maximize REO opportunities and find REO listings – as well as the ability to interface with other REO Agents across the country in an exclusive forum. Find out more about ASREOS and what it has to offer at http://www.asreos.com.

Robert Reich, former Secretary of Labor under President Clinton, recently suggested that a new double-dip recession may be on the way. The reason? New employment figures are still dismal, the median wage continues to drop and middle class consumers lack the disposal income to spend.

And there’s plenty of evidence that the housing market will be experiencing an increased amount of REO foreclosures, on top of the already massive number that are already on the market.

Although experts were hoping that foreclosures were finally stabilizing, the April, 2010 numbers were not good. For every home loan situation that’s improving, two are getting worse – with a total of over 7 million distressed loans currently held by banks. Delinquency and foreclosure rates are still higher than last year, and the total foreclosure inventory is still up over 20% year-to-year.

Moreover, the value of foreclosed properties held by US banks hit $41½ billion in the first quarter of 2010, a 12.4% increase from the previous quarter, according to SNL Financial, a data analysis firm. Currently, according to financial firm Morgan Stanley, it would take 47 months to clear the REO homes “shadow inventory” being held by banks. And that does not take into account new foreclosures.

Looking more closely into the future, Capital Economics projects that there will be 5.5 million REO properties on the market by the end of 2011. “To put that in perspective, that’s more than the 4m homes currently up for sale,” said the Capital Economics team. “Without a doubling in demand, a doubling of supply would deter homebuilders from constructing new homes and put more downward pressure on prices.”

Finally, in another sign of the times, Freddie Mac is, for the first time in its history, looking for REO listings agents and brokers. Sharon Barlett, the manager of supplier operations, revealed that more than 350 brokers interviewed for positions in 16 states as well as the District of Columbia. In addition, Freddie Mac also conducted interviews with potential vendors. Listing brokers represent Freddie Mac in its REO property disposition, listing properties for sale and maintaining the houses during the process.

More and more REO professionals will continue to be in demand to handle these specialized property transactions in the months to come, as they have been since the housing bubble first burst a few years ago. Already REO properties are in great demand because of the great value they present to the average homebuyer. Training to become an REO agent and learning how to get REO listings will be an excellent career choice as joblessness continues to plague the country.

One valuable resource for both experienced and novice REO agents is ASREOS. ASREOS (the American Society of REO Specialists) is the first professional association for REO Agents created by REO professionals and contains numerous tools to maximize REO opportunities and find REO listings – as well as the ability to interface with other REO Agents across the country in an exclusive forum. Find out more about ASREOS and what it has to offer at http://www.asreos.com.

And here are some of those not-very-encouraging facts:

• “60 Minutes” on their May 10th broadcast did a story on homeowners prepared to walk away from their mortgages because they owe more than the house is worth.

• On May 11th, J.P. MorganChase warned investors that more and more homeowners are likely to walk away from their mortgages.

• Banks and other mortgage holders are increasingly not paying attention to homeowners who are behind on their mortgages, according to RealtyTrac. They’re falling further and further behind with no chance of catching up.

• At the moment, there are over 6 million mortgages in default or in the final stages of foreclosure – a staggering figure.

• Homeowners who have been successful in modifying their home loans are quickly falling back in default – and the failure rate is expected to be around 50%.

• Now that tax credits for homebuyers have expired, many experts expect to see a double dip in home sales in the last half of the 2010 – which will drive down prices and cause more underwater homeowners.

• Mortgage rates are also expected to rise, now that the Federal Reserve is exiting the home loan market

• More than 2/3rds of all home sales in Orlando, Florida were distressed properties (REO homes and short sales) in April of this year. REO property prices actually rose due to the demand for REO listings.

• The so-called “shadow inventory” of REO homes that have yet to hit the market – an inventory that numbers in the millions – is expected to peak later this year.

• Rental rates continue to fall, indicating continued softness in the real estate market.

• The number of foreclosures held by Fannie Mae nearly doubled in the first quarter of 2010 from 2009. They currently hold over 11 billion dollars worth of single-family home foreclosures.

Unfortunately, the facts definitely do not point to a housing recovery any time soon. If anything, the increasing number of REO homes that will reach the market in the coming months will boost demand for REO properties and drive down all other real estate values.
That means REO homes will continue to be available in abundance, will continue to be seen as the best value to potential homebuyers and will continue to dominate home sales for months and years to come.

Training to become an REO agent and learning how to get REO listings will also continue to be a great career choice.

One valuable resource for both experienced and novice REO agents is ASREOS. ASREOS (the American Society of REO Specialists) is the first professional association for REO Agents created by REO professionals and contains numerous tools to maximize REO opportunities and find REO listings – as well as the ability to interface with other REO Agents across the country in an exclusive forum. Find out more about ASREOS and what it has to offer at http://www.asreos.com.

An article in “Financial Planning” magazine entitled “REO de Dinero” makes the case that buying an REO (Real Estate Owned) home is the smart move in today’s housing market. “There are terrific opportunities in REO properties now,” the magazine quotes John Anderson, co-owner of Twin Oaks Realty in Minneapolis and also on the board of the 2010 Federal Housing Policy Chair for the National Association of Realtors.

With another record number of foreclosures occurring in the first quarter of 2010, and another record number expected later this year, due to continuing skyrocketing mortgage delinquencies, the number of REO listings won’t be dwindling any time soon. First American CoreLogic also states that the huge amount of REO shadow inventory will also impact the housing market for years to come. As it is, the known inventory of REO properties broke the record books in March of this year, hitting an all-time peak of 1.1 million.

The above facts will create more and more opportunity for those wanting to know how to become an REO agent and how to get REO listings.

Bob Fornatto, a senior mortgage consultant at Wintrust Mortgage in Downers Grove, Illinois, explained just how big a value an REO home can be. Fornatto discussed a recent REO sale in which a buyer bought a “two-flat” in suburban Chicago. The buyer plans to live in one unit while renting out the other to bring in income. The previous owners paid over $400,000 for the property, but the new owner got it for around $265,000, Fornatto says.

REO buyers can generally expect prices that are up to a third less than the previous purchase price. Another advantage is that REO transactions often close quickly.

“Banks often want to sell their real estate as soon as possible,” according to Mark Rodriquez, an attorney who has handled REO sales. “Buyers should have their loans in place or be ready to make a cash purchase. If you make a bid and then take four to six weeks to get a loan, the bank may have moved on to another buyer by then.”

The attractiveness of an REO listing in a time of tight credit and a depressed housing market can’t be denied. “Financial Planning” cautions would-be REO buyers only about making sure to have the property inspected before making the final deal. In many cases, damage to REO homes that have been sitting vacant may not be immediately apparent.

Still, since the REO price is usually right, and there’s a good chance that, down the line, the REO buyer will end up making a sizeable profit on the property, there’s no question that the REO home market will continue to be a huge component of the real estate industry for the foreseeable future. Training to become an REO agent and learning how to get REO listings will also continue to be a great career choice.

One valuable resource for both experienced and novice REO agents is ASREOS. ASREOS (the American Society of REO Specialists) is the first professional association for REO Agents created by REO professionals and contains numerous tools to maximize REO opportunities and find REO listings – as well as the ability to interface with other REO Agents across the country in an exclusive forum. Find out more about ASREOS and what it has to offer at http://www.asreos.com.

After a minor lull in the REO market at the end of 2009, the distressed homes market came roaring back in 2010, with short sales and REO properties accounting for over 29% of all home sales this past January. That’s the biggest month for REO sales since July of 2009 and came close to breaking the record 32% racked up in January 2009, according to real estate analysts at First American CoreLogic (whose figures were backed up by another report from Clear Capital).

The report lists these U.S. cities at the top of the REO sales charts, with the following distressed sales percentages:

• San Jose, CA (24.6 percent)
• Houston, TX (40.5 percent)
• Las Vegas, NV (49.1 percent)
• Memphis, TN (43.3 percent)
• St. Louis, MO (39.6 percent)

These are amazing numbers. And they indicate that it’s still an incredible time to become an REO agent and learn how to get REO listings – as there is certainly no shortage of bank-owned properties on the market.
More importantly, there won’t be in the future.

Because, according to CNBC reporter Diana Olick, the next huge wave of foreclosures is on the way (you can read her article at http://www.cnbc.com/id/36195838). Despite all the loan modification programs and the Obama administration’s attempt to forestall foreclosures, sources predict a new monthly record for March.

The fact is that tens of thousands of loans are coming to foreclosure. And, because of the government simplifying the process, the actual foreclosures will happen twice as fast as in the past – so more REO properties will become available quicker. There are still about 5 million delinquent home loans out there that will be hitting the foreclosure stage soon.

The big banks are expecting foreclosures to really skyrocket near the end of 2010. One report states that Bank of America expects their current average monthly foreclosure rate increase by 600% in December, while JPMorgan Chase is officially predicting their portfolio of REO properties will be up by 50 to 100% at the end of the year.

A property becomes an REO listing after it forecloses and is repossessed by the bank. According to a March 15th article posted online at HousingWire.com, many in the real estate industry predict recovery can only come if there are enough trained REO agents available who know how to properly handle and sell these properties. These types of listings require knowledge of how to deal with REO sellers, who are generally large financial institutions, and how to process these unique transactions.

Those interested in making real money in the real estate industry should investigate how to become an REO agent and how to get REO listings. Agents with the expertise to do BPO’s (Broker Price Opinions) and handle REO homes will find there is a continuing thriving market with buyers lining up to get a bargain on a home.

One resource that both experienced and novice REO agents routinely turn to is ASREOS. ASREOS (the American Society of REO Specialists) is the first professional association for REO Agents created by REO professionals and contains numerous resources and tools to maximize REO opportunities and find REO listings – as well as the ability to interface with other REO Agents across the country in an exclusive forum. Find out more about ASREOS and what it has to offer at http://www.asreos.com.

The first three months of 2010 featured a record number of foreclosures, even as many economic experts claim the recession is over.

RealtyTrac Inc. reported that the number of homes in the REO pipeline jumped 35 percent from the first quarter of 2009. More homes became REO properties than in any other quarter since at least January of 2005, when RealtyTrac first began reporting foreclosure figures. In all, more than 900,000 homes received foreclosure notices, or one in every 138 homes.

“We’re right now on pace to see more than 1 million bank repossessions this year,” said Rick Sharga, a RealtyTrac senior vice president.

The surge in foreclosures, according to many experts, has to do with banks finally processing the so-called REO homes “shadow inventory” that had yet to be officially foreclosed on and were in limbo.

Although the Obama administration is still trying to prevent foreclosures, many real estate experts believe this policy is actually harmful both to homeowners and the real estate market in general.

Ivy Zelman, who runs her own real estate consulting firm, says, “Public policy is delaying the pig in the python – the pig has lipstick.” The “pig,” to Zelman, represents the huge REO inventory that is just now being dealt with by the nation’s financial system – but still is not represented by official figures.

In Washington D.C., for instance, Zelman says official estimates say there is about a 5 month supply of homes for sale. But if the hidden REO properties were actually represented, it would be an over 13-month supply.

Another reason for people to try training on how to become an REO agent? It’s not just past foreclosures that are the problem – many future ones are still to come. Households facing foreclosure grew 16 percent in the first quarter of 2010 year-to-year and 7 percent from the last quarter of 2009.

Homeowners continue to struggle with mortgage payments because they’ve either lost their jobs or an interest-rate reset on their home loan has made it impossible to afford payments. In addition, most can’t refinance because they’re “underwater” – they now owe more on their loan than their home is worth, a problem that’s not going to go away soon with home prices still dropping in most areas. And the Obama Administration’s programs to help homeowners modify their loans has only had very limited success – about 215,000 have completed the program, but another 158,000 were unable to follow through with the lowered payments they negotiated with their banks.

Training to become an REO agent and learning how to get REO listings is still a hot career choice in a real estate market that will continue to be dominated by REO sales. One valuable resource for both experienced and novice REO agents is ASREOS.

ASREOS (the American Society of REO Specialists) is the first professional association for REO Agents created by REO professionals and contains numerous tools to maximize REO opportunities and find REO listings – as well as the ability to interface with other REO Agents across the country in an exclusive forum. Find out more about ASREOS and what it has to offer at http://www.asreos.com.

If you’re already an REO agent or want to become one, there’s one important thing you have to do to receive a continuous stream of REO listing assignments and BPO orders. And that’s to strive to submit on time, every time, a 100% accurate and complete BPO (Broker Price Opinion).

For those of you unaware of what a BPO is, it’s a tool used by lenders and mortgage companies to value properties in situations where they believe the expense and delay of an appraisal is not necessary – BPO’s are used extensively on foreclosures. REO agents and brokers are assigned to do them by the lender or asset management company, and it’s also a common entryway to actually being awarded REO properties to sell.

Doing an accurate BPO can be tricky and difficult, however, when you adjust the price of the foreclosed property against active and sold comparable properties in the gross living area. This is one of the first things the asset manager or the quality control manager is going to review when they’re auditing your BPO.

If your adjustments aren’t consistent and on the money, then you’ll be asked to do it all over again – and your quality control score will suffer. There’s a way to avoid that unfortunate situation – by using the formula below to accurately calculate the adjustment.

Step # 1: Add the sales price of all three of your sold comparables:
For example, $900,000 + $870,000 + $800,000 = $2,570,000

Step #2: Add up the square feet (above ground – do not include the basement, if there is one) of all three sold comps.

Example: 4,000 sq. ft. + 4,500 sq. ft. + 4000 sq. ft. = 12,500 sq. ft.

Step #3: Now, divide the total combined sales price of all three by the total square footage of all three.

Example: 2,570,000 from Step #1 divided by 12,500 from Step #2 = 206.
This determines your average price per square foot in the area: $206.

Step # 4: Determine your adjustment value by multiplying that average price by .25.
Example: $206 x .25 = $51.

So $51 is the amount you would use to adjust for the variance in square feet between the subject property you’re doing the BPO on and your comps.
Here’s how you use that number. Let’s say the difference in square feet between the subject property and the comp is 500 sq. feet in this particular scenario. That means you multiply that 500 by $51 – which equals $25,500. That is your adjustment figure.

So if the comp is bigger, you would make a negative adjustment by subtracting the $25,500. If it’s smaller, then you make a positive adjustment and add $25,500.
Keep in mind that you are trying to “equalize” the indicated value. Let’s continue working with the $51 per square foot adjustment figure we calculated above. Let’s say your comp is 3,800 sq. ft. and, again, your subject property is 4000 sq. ft. The difference is 200 sq. ft. We multiply that by the $51 and raise the indicated value of it by $10,200.

By making this adjustment, we are saying that if the comp were 200 sq. ft. larger (equal in size to our subject), that it would have sold for $10,200 more than it actually did sell for.

You can get more tips like these from the national trade association ASREOS, the American Society of REO Specialists, which is an important resource for those wanting to work in the incredibly lucrative REO industry. Find out more by visiting www.ASREOS.com.

The foreclosure crisis is incredible enough – already offering amazing opportunities for REO agents and brokers. But now there is finally some sunshine lighting up the so-called “shadow inventory” of foreclosure properties that have yet to be officially recorded or to become part of the massive amount of REO listings currently for sale all across America.

Real estate data and records company First American CoreLogic estimates this shadow inventory at 1.7 million homes as of the end of September 2009 – that’s 1.7 million more homes that should eventually find their way to become REO homes for sale (this report can be accessed at http://www.facorelogic.com/uploadedFiles/Newsroom/RES_in_the_News/FACL_Shadow_Inventory_121809.pdf ).

With 3 million official foreclosures already estimated to hit the REO listings in 2009, that means an incredible amount of potential profit for anyone interested in how to become an REO agent. The other astounding aspect of these numbers? Most experts think they’re too low.

In a blog posted at “The Wall Street Journal” online site on December 18th, 2009, analyst James R. Hagerty makes the point that First American expects that 68% of mortgages that are over 90 days late in payments won’t go into foreclosure. With today’s economy, that’s a huge assumption to make. Especially when another company, Lender Processing Services, estimates that 30% of the properties that have been in foreclosure for 12 months haven’t even hit the market yet. 30%!

Basically, that means there could be as many as 7 million potential REO homes that are still in this “shadow inventory.” Those are 7 million REO homes that will need agents and brokers who possess the proper training in dealing with REO properties.

Most people have heard of homeowners just walking away from their properties rather than go through the foreclosure process. Just to underscore the magnitude of the REO explosion, some banks are doing the exact same thing to their lenders, believe it or not. In San Francisco, the financial institution Morgan Stanley is giving back five office buildings it purchased a few years earlier from The Blackstone Group. It’s estimated the five buildings are now worth approximately half the value Morgan Stanley bought them for at the time.

2010 is going to be another huge year for REO sales, no matter how you look at the picture – and probably another record-breaker. REO homes also continue to be the hot real estate category that buyers are interested in, due to the value they provide.
The national trade association ASREOS, the American Society of REO Specialists, is an important resource for those wanting to enter this lucrative field – or for those already working in the REO industry.

In addition to providing invaluable REO training advice and essential tips on how to get REO listings, ASREOS, run by nationally-known REO expert Frank Patrick, offers its members the ability to post their online profile, searchable by zip code, which can be accessed by REO Sellers. ASREOS also features an exclusive database of financial institutions that control REO listings.

One of ASREOS’ most useful features is a members-only forum that allows REO professionals to trade inside secrets and tips to each other. Find out more by visiting www.ASREOS.com.

REO (Real Estate Owned) properties are currently the biggest-selling home category in America. And that’s a situation that’s not about to change soon.

For those of you who don’t know what REOs are all about, when a property goes through a foreclosure process, usually the financial institution that backed the mortgage ends up owning the home. That REO Seller then has the property cleaned-up, secured, repaired and put back on the market as an REO listing.

Most REO Sellers don’t really want to be in the home-selling business. They rely on professional REO agents and brokers to take care of all the groundwork. REO homes, of course, are very attractive to buyers because they are traditionally priced much lower than comparable homes being sold by the actual owners. Banks and asset managers are anxious to get REO homes off their books and close out the unpaid mortgage.

That’s why there’s an amazing opportunity for those interested in making money in the REO industry. While job losses continue to mount in America and traditional occupations suffer, the REO business is still booming and is likely to be for some time.

At the moment, delinquencies on mortgages still outnumber the amount of home loans being approved. It’s estimated that one out of four Americans are behind on their mortgages. And it’s also a fact that most first-time home buyers are buying REO homes.

The key to how to become an REO agent is to understand how to work with these REO Sellers. It’s a very different dynamic than working with “normal” real estate transactions, as you’re not dealing with the actual home owners. Rather, you’re working with large companies, many of them not even located in the same state as the REO property in question.

The main challenge is building up a professional and reputable image with these companies. Generally, the best way to build that relationship is to perform what are called BPO’s (Broker Price Opinion) on REO homes – it’s basically deciding on a sales value for an REO property. It’s not an official appraisal, and the REO Seller will usually gather a few on the same property to get a consensus.

A great resource for getting inside the REO arena is ASREOS, the National Association of REO Specialists, which offers all kinds of benefits to its membership, consisting of both REO veterans and beginners to the business. In addition to providing invaluable REO training advice and essential tips on how to get REO listings, ASREOS, run by nationally-known REO expert Frank Patrick, offers its members the ability to post their online profile, searchable by zip code, which can be accessed by REO Sellers. ASREOS also features an exclusive database of financial institutions that control REO listings.

One of ASREOS’ most useful features is a members-only forum that allows REO professionals to trade inside secrets and tips to each other. Find out more by visiting www.ASREOS.com.

One in four mortgages in Florida is either past due or somewhere in the foreclosure process. California foreclosures grew 22% this past October from the previous month – and are up 21% from the previous year.

And the biggest danger sign that the REO boom is very far from over? A new survey from the Mortgage Banker’s Association shows that the mortgage delinquency rate across the country is just about 10% – a record high since they began tracking this figure in 1972.

One final alarming figure – if you put together all loans either in delinquency or foreclosure, it breaks the 14% mark – also a record for the MBA survey.
This demonstrates that the surging unemployment is fueling yet a third giant wave of foreclosures that might end up being the biggest one of them all. For the most part, the homeowners that are now in trouble are homeowners with good credit and solid mortgages who are unable to meet their house payments because of sudden unemployment or under-employment.

The smart way to move in this kind of economy is with it, not against it – and to join the ranks of other REO agents and brokers who are cashing in on the enormous amount of REO properties that REO banks are selling with great success. Another statistic points that out – over 25% of all Americans who are in the market to buy a home want an REO deal. They know the price will be lower and they’ll be able to afford a larger home or one in a more expensively-priced area.

That means REO Sellers need more REO pros than ever before to help service and market their homes for them. To help meet that need, ASREOS, the American Society for REO Specialists, was created by nationally-recognized REO expert Frank Patrick in 2008. Patrick saw that the huge amount of REO listings was going to dominate the real estate landscape and that REO sellers would need a whole new army of REO agents with the proper training to handle the incredible amount of properties.

“There’s never been a resource like this for both beginning REO vendors and experienced ones that’s been run by REO professionals,” Patrick says. “Fortunately, I began specializing in the foreclosure niche years ago, before it was such a substantial portion of the housing market – so I saw the challenges that were coming before most people in the general real estate profession. I specifically created a trade association that was designed to hopefully meet everyone’s needs in every conceivable way.”

ASREOS’ array of exclusive member benefits include a members-only forum at Patrick’s website, Asreos.com, where ASREOS members can swap tips on how to get REO listings and deal with REO banks, post an online profile searchable by zip code so REO Sellers can find qualified agents instantly and easily, access to free interviews with top national REO agents, and other comprehensive resources. ASREOS also features an exclusive database of financial institutions that control REO listings.

Find out more about this thriving trade association devoted to REO training and education by visiting their website at www.ASREOS.com.