Tag Archives: Real Estate Investment

For 2011, investment purchases increased significantly, according to data from the National Association of Realtors, and with more individual investors absorbing REO properties, the organization thinks it is time to limit bulk REO sales to large institutions. Investment-home sales increased 64.5 percent last year to 1.23 million, NAR reports. In a letter to federal regulators, NAR urged policymakers and lenders to focus on expanding the availability of financing for qualified homebuyers and investors to reduce the number of REOs on the market.

Fannie Mae has put a block of 2,490 REOs up for sale. It's the first pilot transaction of the federal government's Real-Estate Owned (REO) Initiative announced in August 2011, which aims to sell homes repossessed by government agencies to private investors for the purpose of turning the properties into rental units. The homes up for grabs are concentrated in the hard-hit metropolitan areas of Atlanta, Chicago, Las Vegas, Los Angeles, Phoenix, and parts of Florida, and 85 percent of them are already occupied by tenants.

The National Association of Real Estate Brokers, Inc. (NAREB) announced the launch of a 25-city, $1.2 billion REO and foreclosure mitigation initiative called the Homeowner's Assurance Program (HAP). NAREB, through is network of industry professionals, will provide the agent infrastructure to manage, market, and dispose of nonperforming loans and REO assets acquired under the program. Targeted buyers include first-time homebuyers and others who are caught in the credit crunch and having trouble purchasing a home.

Foreclosure sales on the West Coast started strong for the year 2012, with Washington as the exception, according to ForeclosureRadar. Arizona, California, Nevada, and Oregon are the other states included in the report - all of which saw increases in foreclosure sales to investors. Nevada experienced the largest month-over-month increase in foreclosure sales, up nearly 60 percent. California also saw a substantial increase at nearly 15 percent and underwent the most activity, with investors purchasing 3,964 properties for $766.2 million, according to ForeclosureRadar.

The analysts at Capital Economics are holding fast to their forecast that the downturn in the housing market is drawing to a close. As a result, they say housing should soon start to boost economic growth, but as it now makes up only a small share of the economy, the sector is unlikely to add much more than 0.2 percentage points to annual gross domestic product (GDP) growth this year. In the fourth quarter of 2011, residential investment accounted for just 2.5 percent of overall GDP. That's down from the 2005 peak of 6.3 percent and the 1946 to 2008 average of 4.8 percent.

Field Asset Services (FAS), a provider of pre-foreclosure, REO, and renovation field services, has released its top 10 property preservation predictions for 2012, which focus on providing superior customer service, the need to take initiative to pre-empt future problems, and a demand for knowledge that will open communication and deliver results. Among the company's forecasts, institutional investors will begin to emerge as their interest in purchasing single-family residence REO properties increases, and innovation in the area of mobile technology will be necessary for vendors and contractors to work more efficiently from the field.

Homebuyers with enough cash in hand to cover their offer price in full are able to bid significantly lower on properties and according to a new industry report released Monday, because they offer a shorter and more reliable closing timeline without the impediments of a mortgage, they often win out with that lower bid. The study found that this low-bid-winning dynamic is particularly true for distressed properties because mortgage servicers selling foreclosed or REO homes generally prefer transactions that can settle within 30 days.

The Federal Reserve is throwing its support behind a large-scale REO-to-rental program to address the oversupply of vacant homes and prevent property values from falling further. The Fed notes that in contrast to the market for owner-occupied homes, rental housing is strengthening. Officials say a government-facilitated program has the potential to help the housing market and improve loss recoveries. They've identified specific markets with large concentrations of vacant REOs, where bulk sales to investors make sense.

The Federal Housing Administration (FHA) is extending the temporary waiver of its property anti-flipping rule. FHA rules typically prohibit insuring a mortgage on a home owned by the seller for less than 90 days. In 2010, however, the agency waived this regulation, and later extended the waiver through 2011. This latest extension permits the use of FHA-insured financing for HUD-owned and bank-owned properties, no matter how long the homeowner has held the title, through December 31, 2012.

Despite record low mortgage rates, 2011 has seen a surprisingly high level of cash home purchases, according to the real estate research firm Hanley Wood Market Intelligence. Analysts with the company say between tight lending standards and a desperate search for yield by investors, cash purchases of homes - particularly for distressed properties - are becoming more common. The company's study found 38 percent of homes purchased in 2011 were bought with all cash.