Well, let’s get this white elephant out of the living room. Bank of America agrees to buy Countrywide Financial for $4 Billion in stock. Wasn’t is just a few months ago B of A infused $2 billion into Countrywide as a "line of Credit’ Loan?  huh- seems like we, the public, were led astray to avoid the panic from setting in. So, essentially, they just paid $6 billion to take down the company. As one of the Nation’s top tier lenders, you would think they could get the beast under control. Yet, I’m still seeing most of their foreclosures get taken back as REO at the foreclosure auctions here in Phoenix. I’m seeing most of their short sales go unapproved when they have solid, ready to close buyers at nearly full price. They’re taking back the majority of their foreclosures without addressing the internal problems of loss mitigation. You would think they saw this coming, and would’ve made corrections long ago. I’m not too surprised at all. They needed to completely revamp their lending standards, as well as their loss mitigation standards. Loosen up their regulations, and start dealing more freely with buyers/sellers before they take back the REOs.

My prediction is that there’s going to be a large surge of REO inventory within the next 6-12 months, banks finally realizing they need to dump their properties and get them off the books. REOs will be picked up for pennies on the dollar (more so than they are now). It’ll be interesting to see how B of A handles their inventory of non-performing notes and REOs as well. Maybe they have figured out how to deal with the current problem, and start pushing deals out for the investors to enjoy. At the same time the Fed is cutting rates and pushing money back into the economy. So if B of A loosens up their lending standards somewhat, we’ll have a stronger buyer’s demand, as well as strong supply. Watch this to get an idea of how the Federal Reserve works.

I’d really like to see the numbers of outstanding liens/debts they have on the books now- see how much of a bargain Bank of America walked into for their $6 Bill. If they know how to deal with loss mit and REO’s properly, they can easily turn this nightmare around and take in some very large profits. My guess is that is exactly what they’re thinking, and changes are hitting the cubicles of loss mit reps’ desks already. The next few months will be very interesting. Are you ready to pick up more REOs?  Contact me ASAP to find the best deals!