How banks handle REO's

[Miss Critter]

Do you think it will be "business as usual" for banks' REO departments? It seems that many of them are building up quite the portfolio, and with lending more restricted, that certainly makes it more difficult to move real estate. Any ideas on whether and how the way banks deal with REO properties might change in the coming months?

 

[SHELLY]

Do you think it will be "business as usual" for banks' REO departments? It seems that many of them are building up quite the portfolio, and with lending more restricted, that certainly makes it more difficult to move real estate. Any ideas on whether and how the way banks deal with REO properties might change in the coming months?

Some banks need time to build up their reserves....their books look "OK" as long as they hang on to the properties at bubble value--but once they dump them at market value, take the writedown and adjust their balance sheets, the FDIC may have to make a Friday night raid.
.

 

[30ashopper]

Off topic, but I was clicking around in Walton County recently on "big blue blocks" and was amazed at how many were owned by banks. They have one heck of a portfolio right now in our area.

 

[Matt J]

Who wants to bet that the next financial scandal is bank officers "dumping" foreclosed properties on their friends for rediculously good deals?

 

[AAbsolute]

Who wants to bet that the next financial scandal is bank officers "dumping" foreclosed properties on their friends for rediculously good deals?

Some come with built in financing that's hard to beat.

 

[Miss Critter]

Some come with built in financing that's hard to beat.

Please elaborate. . .

 

[AAbsolute]

I've talked to loan officers

Please elaborate. . .

There are local banks who lent money to real estate investors. Many times the investor loans were not Conventional approvable loans, instead they were portfolio loans for the bank. When the bank took those back they took them as part of the portfolio. Those loans can then be released to a party as the bank sees fit without regard for Conventional guidelines. That said, banks can offer special financing on their properties. This will make it hard to beat.

 

[Miss Critter]

Gotcha. Thanks.

 

[Little Fish]

Not sure how Banks handle REO's, but I read an interesting article regarding Wachovia's selling bad land loans to investors. I assume once the investor purchases the land loans, they have the right to take back the underlying properties.

I've posted the link below:

http://www.thestreet.com/_yahoo/new...34003.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

Little Fish