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We buy foreclosures, maybe three a year, just for extra money. We have a young couple who are buying our last foreclosure and they are getting a government loan. The bank had someone do an appraisal and everything was going fine and they told this couple to tell us that we need to come down on our price because with a foreclosure you can't double your money. In reality we were not doubling our money with the money invested in the property and time we had in the house but O.K. we came down on our asking price by approximately $3,000. Well, the bank comes back and tells us they are doing another appraisal because the price changed and its the same guy who appraised it before. This young couple now has paid for two appraisals which are $400 a piece where we live. This seems like this can't be legal. We came down on the price and even if we had gone up on the price, as long as the first appraisal was good. I think the banks are taking advantage of people, who for one do not have a lot of money in the first place. How can this be legal?
Due to all the reasons we are in this mortgage crisis - there has been many changes the way things are done, especially Mortgages (many changes still coming). These changes are important to restoring the confidence in the mortgage market. That is what the public is being told......lol!
Honestly these changes that are coming are going to benefit the wealthy, and the last on the list will be the homeowner. This country is not run of laws and protecting the consumer, it is ran for the gains of the wealthy.
People in this country are not stupid, they just lack knowledge and the wealthy extort to poor. An easy example - most lenders are all about profit, people go to for home loans. Through closing costs, fees, interest rates pay an exorbitant amount for there loan. Looking at Credit Unions which are owned by members, operate not for profit. The troubles today started with the deregulation of home loans back into early eighty's. Problem after problem has developed because of this.
It seems your your method of investing in not your full time job. Like many other people you are looking for a quick return on the money. Gone are the days of getting rich with real estate. In the big picture in my opinion. - investing in foreclosures is risking. too risking because value is not returning fast enough. We are going to be in this mortgage mess through 2018.
Your issue - understand after a closing the servicing bank pools the new loan with similar loans into Pass Through Secretaries. That are sold to Investors through Fanny and Freddy (and Ginnie). Under the new rules, lenders who want to sell loans to Fannie Mae or Freddie Mac will not be allowed to use in-house appraisers on a home.
They will also be forbidden from using appraisals by a subsidiary or an affiliated company. Mortgage brokers and real estate agents involved will also be prevented from picking appraisers. Banks now have their own appraisers examine property's.
A little of topic - but dealing with with investing. Right now a better investment would be short term Municipal Bonds (great way of avoiding being taxed on the profits). Long term conservatively Mutual Funds - buying class A (fee up front). Also mention no load Mutual Funds (not as aggressive, but cheap and safe). If you are a numbers type person with a lot of time. Check out ETF Mutual Funds.
If you want more aggressive growth, look into construction and transportation stocks - these are the best stocks whose value goes up the quickest coming out of a recession. Right now prices are low.
Yesterday I took a little gamble with $500 - with a company that was de-listed, the stock went down to $00.01. Researched and saw they filed for Chapter 11 protection. Bought 50,209 shares. Come in this morning nice surprise - value went up to 0.04, sold making a quick $1488 profit over night.
A rule of thumb determining what to invest in, take 100 and divide by your age (example 100/52 = 52% of your assets should be in fixed secure investments. Then 48% in aggressive investments, which decreases due to your age.
I am not a counselor, stock broker or banker - I have just spoken to 1000's of people 1-on-1 in the last 10 years been working in mortgages. My name says what I do.
Good Luck making money!!!!!
(sorry for me venting - have a vendetta against Lenders screwing people)
Here is the FHA memo on property flipping. You want to make sure your borrower isn't with a lender that has a ton of overlays (additional requirements) in addition to HUD's guidelines.
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