Foreclosures Are Not Benefiting Foreclosure Companies
It will be erroneous to think that foreclosures are benefiting foreclosure companies – this is not happening. Many of the reo houses in the market after the banks have taken them over are in such a state of disrepair that they need extensive repairs. In many cases running the bulldozer seems to be the only answer.
Foreclosure numbers are on the rise in Las Vegas valley and with it the alternatives before the borrowers occupying the houses are vanishing. Interest rates are spiking in the adjustable rate category of mortgages. Buyers are backing away from the auctions at the last minute.
The loud posters hanging around with signs that read ‘Cash for your house in 48 hours” or “We buy houses fast cash any condition” and “Avoid foreclosure” do not give the true picture. The market for buying foreclosed properties is at its dullest, bemoaned some of those whose business it is to buy reo homes.
Doug Kupertman of Condor Equities commented that they receive many phone calls but none of them materialize into good prospects. Most of the houses have no equity. In some cases the equity is negative with the worth of the house being less the amount of the loan. Condor Equities deals with units that are under the shadow of foreclosures. The number of inquires have increased but few have been profitable leads.
The company offers to buy units under danger of foreclosure in such a way so as not to endanger the credit ratings of the borrower. The buyers usually pay less than the market value and then invest in renovation for reselling it. In some cases assistance is given to the borrowers to help them stay in their houses. This means negotiating with the lender for payment alternatives, seeing to new equity-only loans or giving the property back to the occupants under certain conditions after the sale. These are some of the many options.
The situation is in such a mess with ballooning payments that some of the deals just cannot be worked out. There is no gain for companies like Condo Equities. It is unrealistic to read a book about flipping houses and raking profits quips Kupertman.
Mike Fratantoni of Mortgage Bankers Association says that investors are facing the greatest risk in today’s foreclosure crisis. Miring the situation are other factors like unemployment and health reasons. Job loss is forcing many in southern Nevada to succumb to foreclosures.
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August 15th, 2008 at 3:50 pm
[...] position and steer forward, one step at a time, through the process that will help them to avoid foreclosure. The house owners also get to know vital information about the common forms of foreclosure scams [...]