Some banks I have seen are either moving slow or not foreclosing at all. They seem to have a wait and see approach to homes that are under water. I have seen most of these loans from Chase, Bank of Amer, Wells, etc being sold to Nation Star and other lower less known Mortgage companies. These FC are taking about 12 to 18 months to complete, at least in the Maryland area. This has some pros and cons as to the time frame. Its good for you can campaign to a prospect for a year or more, but bad because these attorneys are just running up hugh bills in legal fees (sorry no offense). Im currently working on a sub2 and the legal bill is @8k (not even a court appearance), and PD payments are 12k.
Also a friend told Chase bank you can have a property hes not paying anymore, and they said NO they arent foreclosing on it due to they dont see any value in it. If he offers them 8k for a 65k mortgage they will give him the deed ( yes im working that one also).
So I was wondering if others were seeing these such large legal fees in there sub2 deals, as well with the slow moving and no foreclosure actions by banks.
Most of the big banks got hammered with lawsuits and fines...billions of $'s...over unfair, rubber stamped foreclosures. As you would expect, the natural reaction to that was, "We're afraid to foreclose on anyone for any reason."
Add to the banking situation the fact that some states, particularly judicial foreclosure states, make it very difficult to execute a foreclosure, and you have a perfect storm for foreclosures taking forever. Texas is a non-judicial state and foreclosures move pretty quickly, even with the big banks.
As for the bank selling off the mortgages, if the mortgage is in default already, they probably wouldn't sell it to a mortgage company. The mortgages they are selling to these other mortgage companies are probably sub-prime loans they are trying to get off their books. Those mortgage companies are buying those notes at steep discounts that account for the risk they are assuming. The big banks have spent the last 8 years trying to get those loans off their books, while giving themselves the V-8 treatment...stupid, stupid, stupid!
I agree totally with that...thanks for the input. But I also see the larger banks are selling these notes yes probably at a deep discount while they are in the foreclosure process. Non performing paper SMH...yes they are stupid but I guess smart if you have a buyer of bad mortgage paper.
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!