REO Failures Nationwide

    When I started writing about the housing bubble in 2005, I was ridiculed as being a scare monger.  The "expert" on Wall Street and in the media argued that the problems were unique to Florida.  
    So when I started writing about the failure of many banks, financial institutions and asset managers to deal with REO properties, once again I was ridiculed.  C'est la vie.  
    I like to tell my clients that Florida is the crystal ball you always wished you had when it came to predicting the future.  Look at Florida, and as I have said a hundred times . . . "What you see here, is coming to a town near you . . . soon."  
    A perfect example is the article below out of Colorado.  I have been writing about these very same issues for months.  The worst offender when it comes to problems like this in the REO market is Fannie Mae.  If you have not read my page about Fannie Mae, you need to read it to believe it.  And if you think it is fiction, I actually name names at Fannie Mae.  In fact, the Director of Property Disposition, Rick Gebhart.  Gebhart totally blew me away in his attitude of "who the hell cares."  And "Mike, it's none of your business."  Well it is my business because I am in the industry and it does effect me and the government is still their to bail-out Fannie Mae when guys like Rick Gebhart run it into the ground.  Uncle Sam might say he's not guaranteeing Fannie Mae, but we all know Uncle Sam talks out of more than orifice.  
    I know, I'm off track again.  So here's an example of what we have been seeing in Florida for a few years now . . . but this time it's Colorado.

Trying to buy a foreclosed home in a flooded housing market

KUSA-TV in Denver - 5/19/2008 - With so many foreclosures available in the housing market, it should be easy to pick up a good deal. But a lot of frustrated buyers are walking away from their dream homes because time is not on their side.

The house is there. You have the cash. But home sweet home is not yours.

"It was so frustrating."

Susie Morton spent two years looking for a house. She found a Tudor house on South University Avenue.

"I made a full price offer, plus $1,000 cash. The bank just never got back to us. It was very, very frustrating," Morton said.

Morton is one of many people trying to buy a foreclosed home in a flooded housing market.

Real estate expert Petur Workman says it's easier said than done because lenders are overwhelmed and the paperwork is piling up.

"There is a wait time that has been a few months up to a year on the seller's side. People are getting frustrated. They are facing foreclosure or bankruptcy and on the buyer's side, they are just putting up their hands and saying, 'I will go onto the next one,'" Workman said.

Morton offered $340,000 in cash for the foreclosed home. She waited nine weeks with no response. While she was waiting, a house directly across the street was put on the market. For $32,000 more and only six hours of negotiation, it was hers.

"It's almost like the IRS, I hate to say that, where you are just put into a pile and file number 14 is taken and they process it and they take a long time whether it's cash or financing," Workman said.

Through the arch window of her new home, Morton can see the house that was a pain in her American dream.

"I really wanted that one, but after nine weeks of frustration - you get (to the point) where (you say), 'I don't want this house,' you know," said Morton.

Experts say you should expect to wait anywhere between six weeks to six months to get a response from lending institutions right now. If you have time and are patient, they say you could land a good deal.