SHORT SALES ARE BETTER THAN REOS

It is a simple fact that short sales realize more money for a lending institution than can be realized by the sale of the property after foreclosure. When a lender sells a property after foreclosure the property is described as a REO. Lenders have been slow to dedicate sufficient resources to staff short sale departments and thus response times are woefully slow. John McGeough and Anthony Lamacchia, founders of McGeough Lamacchia Realty Inc. traveled to Washington, D.C., last week to educate policy makers on the benefits of short sales. 

McGeough Lamacchia Realty is a full-service real estate firm in Waltham, Massachusetts, specializing in short sales. The company’s two principals conducted meetings with officials at Capitol Hill, the FDIC, the U.S. Treasury, and the National Association of Realtors.

Their testimony demonstrated the  increase in revenue experienced by banks who approve short sales as compared to REO proceeds.  According to the analysis, if one-third of the 94,428 lender-owned properties in the sample area — or 31,161 properties — sold as short sales, lenders could gain an additional $1,547,305,687 in revenue.

“Considering all of the political attention in our country over the debt and the budget, promoting short sales should be a high priority for all of our lawmakers in Washington,” said Lamacchia.

Clearly, the lenders should focus more of their effort on short sales in order to reduce the inventory of defaulting properties and resurrect the stalled real estate market.

WE LIVE IN DIFFICULT TIMES

I thought I would pause for a moment from the everyday ordinary occupation of making money through real estate and take notice of the difficult predicaments all around us. One of the principal reasons that the real estate market is in such a state of disarray is our own behavior. Everyday we read about the immoral conduct of our captains of industry, political leaders and ordinary citizens. It forces me to stop and think about the big picture.

I am a child come of age during the Vietnam War. I had a draft number, marched against Washington and the military industrial complex. Listened to the Beatles. Went to Syracuse University; followed the Dead. Got married. Had three children. Divorced. Got married again and had two more.  Lawyer in my middle years, donating to George Bush. Obsessed with success and money.  Than tragedy struck. My wife had a brain injury, one of my sons is autistic. I have been forced to really look at my priorities and what is important.

So here we are in the midst of one of the greatest economic dislocations of all times. Opportunities are everywhere. Our economy is resetting and with it many of the old ideas and institutions are either no longer relevant or dysfunctional. Many are suffering.

It is time for each one of us to elevate ourselves and change the world. In order for America and the world to lift itself up out of this monetary nightmare, we must all adopt a better set of ethics and values. Lying must be the exception, and the truth must be the rule of law. I believe many of our problems come from our loss of personal morality. Our leaders feel they can say anything to get elected. Do as they please once in power. That is not a democratic problem, or a republican problem, it is a societal problem. Our captains of industry believe that making money is all that is important, and do not care what happens to their fellow man.

Against the backdrop of the chart I published above is the salaries and benefits being drawn by corporate leaders even of institutions that  are failing or performing poorly. Or receiving Government assistance.

It is time for each one of us to adopt a better set of ethics. Each of us must act with integrity and honesty. We must care about our fellow man, and the future of our country, and the world. I am by no means a bleeding heart socialist, liberal. In fact I am a conservative, religious fundamentalist. The Bible,Torah, as well as almost every other holy scripture demands that we act ethically, morally and care for our fellow man.

I can make money by buying and negotiating short sale properties; Arranging private equity loans; Funding for commercial ventures, while at the same time, acting justly, and compassionately. Do I want to acquire more and more capital? You bet I do. But not at the expense of my fellow man, or my country or the world. Together we can pull ourselves out of this mess. Divided, and unwilling to contribute to the goodwill of our society, we are doomed to the dust bin of history!

 That's the way I see it. A hippie from the sixties, a conservative in the eighties, and a fundamentalist in the twenty first century.

SHORT SALE STRATEGIES FOR INVESTORS AND OWNERS

As we rapidly approach the middle of the year lenders are still maintaining huge inventories of pre-foreclosure properties.  Many investors, real estate professionals and analysts wonder when will this inventory be reduced? We submit short sales for investors, and agents,  to major lenders on a daily basis. Despite the record inventory and the shadow inventory, short sales are still being parsed out.

In order to obtain a short sale approval you must run a gauntlet of lender red tape and hurdles. The system is still woefully inefficient, lacks uniformity and herculean  requires diligence and perseverance to obtain an approval. Whether you are trying to navigate Bank of America's Equator or any other lenders system the lack of coordination, uniformity and coherency is obvious.

I do not recommend that a agent or investor negotiate his or her own short sale. Short sale negotiation is an art form. A well negotiated short sale will result in the investor or owner achieving a substantial discount from the
projected fair market value of the property. Selling or buying a property is a completely different animal from obtaining a short sale approval.   Here is a article with links that illustrates the complexity of obtaining a short sale approval. If you need competent, efficient short sale support call me at 267-205-6101.

Pennsylvania/Philadelphia Short Sales

Some people think that short sales are a virus. Especially real estate agents. In the greater Philadelphia area and in Pennsylvania there are many short sale opportunities for the savvy investor or bird dog. In Philadelphia you can find short sales opportunities by checking the Philadelphia and surrounding counties civil docket filings. When you find a house that has a foreclosure filing, you can locate it on Zillow or some other real estate website and determine its estimated value. If the mortgages exceed the value, and they usually due, you have a short sale candidate.

After you find a candidate you can call me to discuss its viability for resale at a profit. The viability of a property to resell for a profit depends on its location,condition, and the lender who holds the mortgage.Some lenders are more realistic about the value of their collateral than others. If the property is a good target we will make an offer to purchase the property and protect a handsome fee, for your participation in the transaction.
If you want to buy your own properties we will negotiate the short sale for you.

All it takes to prosper in the Philadelphia real estate market is, energy, tenacity and a network of real estate investors. If you have an interest in learning the short sale business call me at 267-205-6101.Win your own financial independence.