In recent years, many banks have seen the loans they have made to homeowners go unpaid, sometimes for several months, even years. Banks are in the business of lending money. That is how they make their profits and stay afloat. Homeowners who fail to make payments on their mortgages stand in the way of allowing these banks to accomplish their mission and do their jobs well. That’s why dozens of these banks have collapsed recently. Those who fail have assets that need to be disposed of. Sometimes, because banks are in need of immediate cash, they are compelled or prefer to sell in bulk the properties they have foreclosed on. They are willing to discount these properties by as much as 30-50%, sometimes even as deep as 75%, in some states. Investors who can afford to buy in bulk stand the chance of making HUGE profits when they flip these homes to either other investors or end-buyers.
June 26th, 2009
Bulk REO
Do you know how you can start a bank? Most people do not have a clue. Well, I am not about to tell you how, although I could write a lengthy article on the subject. What you should know here is that banks are required to have $7 in reserves for every $1 they have in non-performing asset. No wonder over 30 banks have been shut down thus far between 2008 and 2009.
Most of these banks had loaned out mortgages. So what happens to their assets when they go down under? Uncle Sam seizes them. That’s right. Is the government in the business of holding onto homes? No way. They’d rather get rid of them fast. What’s the quickest and smartest way to do so? Bulk Sale. That’s right.
