B of A Bank Owned Properties

Last week I attend a great meeting sponsored by the organization Certified Residential Specialist (CRS) to which I belong. Their speaker was Ivan Choi who is the manager for the bank's REO (real estate owned) properties. He was very entertaining and had a lot to say. There is a great deal of frustration when dealing with banks who own the foreclosed properties. Each bank can handle them as they prescribe. It is just as frustrating for them as it is for realtors trying to put transactions together.

He stated the NODs (Notice of Default) are at the highest level ever. At present the REO inventory is at the lowest. This will change. He assured us that the bank wanted to sell these properties as quickly as possible and do not hold them back as some have speculated.

I thought it was interesting but not surprising that 68% of those already having new loan modifications have gone back into default. Are you surprised?

He was suggesting there is still a tsunami in the future coming. He said the moratorium ended in March on foreclosures and the flood gates have been opened. Courts are being over run and the system has slowed due to cutbacks even courts are dealing with.

In the beginning there were about 70,000 REOs across the country. Now there is less than 40,000 but he suggested in the next 9-12 months it will be back up to 70,000. I asked about what this means for California, specifically Southern California. He said we had about 7,000 and are now around 3,500 but another 7,000 will be coming our way. There needed to be some clarification as some areas, like the Inland Empire, is being hit hard. In Orange County we are still seeing a large number coming on the list from Anaheim, Garden Grove and Santa Ana. Fortunately, North Orange County should not have a large number.

He had so much to say and we got a lot out of it. He gave a the nuts and bolts type of how things happen. I thought it was interesting in that some of their staff have had calls from Congressmen requesting certain real estate agents be assigned these listings. These politicians seem to have their hands in everything--that's me saying that, not Dr. Choi, but it's true.

He gave his own opinion, not the bank's, that he thought we were not at bottom yet (and I've heard that from other lenders) but he felt it may take another 5 years to turn around. I certainly hope not. Remember, that is his opinion and these experts have been wrong before but he does have access to things we don't. He felt values would continue to come down. (I wanted to talk to him more about appraisals making that happen but didn't have the opportunity).