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I guess the best thing for me to do is just collect on the second and not worry about it, or sell it.

So if I use appraisers, is it ok to ask them for a courtest comp valuation without paying them? My intention would be of course that they get the appraisals on the properties that we would actually choose to purchase.

So what do you think when I get a comp back from a realtor that is less than the assessed value?

Here is what I am doing now.

I poll from three locations electronically and take the blended #
I use my local realtor to pull comps within 300 Sq Feet of the property I am looking at
I look at the assessed value.

Then I take those three numbers and blend them for an average.

If the number is still under 70%, I will look into it further.

Does anyone have a better formula?

Thanks a bunch Wesley.

I have a line for a $2.2B LOC and I am considering using this model internally with my lenders to streamline our ability to focus on becoming an asset management company instead of a wholesale outlet for our lenders.

Thanks again.

You are absolutely correct in theory. I have often wondered why the banks don't just al;ways overbid the amount at the auction to ensure they have to opportunity to maximize their profit potential because it is just paper money to them.

But, the fact of the matter is this. Most big lenders, Like Wells F. or Cwide have an abundance of assets that arent performing on their books. Lets just say conservatively that a Weels F has 3% of their paper not performing. If they have, lets say $50B in paper and 3% isnt performing, then $1.5B isnt performing, that is why they let it go at auction for what they can get on it and then have options:

Write off the loss (if there is any)
Keep the profit (if there is any)
dispose of monthly costs associated with managing the asset.

It is better for them to just get rid of it for whaqt they can get out of it, because 3% is a huge number (by the way those #'s are pretty close to what they have.)

Does this information help you?

hello all,

Trying to get some basic information here. I deal with REO's and am very familiar with BPO's. I am having some serious issues determining electronic values though. This topic may very well be in here somewhere, but for a recap, can we please get it updated.

On the front page of the forum we have access to zillow.com valuations. I can use zillow to baseline properties but I am finding that it doeswnt have the ability to give me real values.

For example, we have a very exclusive gated community where I live. properties are 80 - 100 per square foot more than outside the gates. When I "Zillow" a property that is next to but outside the gated community, it pulls comps from inside the gated community. Additionally, I notice there is a huge difference in teh values when I have my realtor pull comps even when there isnt any "gated area".

This brings me to this question...

Does anyone have any other electronic AMV sites that they use that dont sapm the crap out of you when you use them?

I know of www.zillow.com for not spaming you. I have used one from Bank of America before, but they try to contact you through their mortgage department once you submit.

It would be nice to have a complete list of sites to use to get a blemded average to determine electronic AMV.

Thanks,

:beer:

Very interesting discussion going here, and I am not saying that I lean one way or the other.

BUT

If there is a lender willing to take a first position for 80% of the value of the home and the buyer doens't want to come out of pocket with any cash down...why would it be considered loan fraud for him to secure a 1st at 80%?

It doesn't make any logical sense, and how are you figuring 90%.

What I am really asking here is this:

Investor goes in and purchases for lets say 50% LTV, say 55% after fees.

Sells off to seller with some troubled credit at 80% LTV and agrees to carry the 2nd knowing or intending full well on writing off the 2nd as a loss or liquidating it at a fraction of face value if the buyer doesn't follow through.

The way I am viewing it, it wouold seem that the bank with the 1st is in the primary position to benefit from there not being a 2nd position note as it provides additional revenue to the 1st position holder for thier payments, but it doesn't constitute fraud. The law appears to read that the buyer can't receive a gift from the seller. They aren't getting a gift, they are signing a note on a 2nd. That is a tangible item that has value. If the investor decides to not collect, intends from the beginning to not collect, or forgives it at a later date, that isnt the business of the banking regulators, it is the business of the investor or institution that holds the note for the note.

If the current owner intends on selling off the 2nd position note or relieving it / forgiving it, how does that "artificially inflate the value" of the home? The cost is the cost...right?

I am really just trying to get a handle on this and I may be completely wrong, but I don't think it would be loan fraud, because nobody benefits from the transaction financially.

Suggestions?

So I have read through the entire grouping of everything you linked me to, and I am still of the understanding that it sin't mortgage fraud if they choose to not collect the debt, so long as they have the intention of doing so when the loan is originated.

Thanks a ton for the infromation though.