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After an unsuccessful auction, the bank will go through the process of trying to sell the property on its own. It will remove some of the liens and other expenses on the home and try to resell it to the public, either through future auctions or direct marketing through a Realtor. Generally speaking, bank REO properties are in poor shape in terms of repairs and maintenance; however, real estate investors will often go after these properties as banks are not in the business of owning homes and so, in some cases, the low price can more than compensate for the condition of the property.

Once a property is REO, the bank or lender will try to get rid of the property by either selling it directly themselves or thru an established broker. At one time, many larger banks such as Bank of America and Wells Fargo had REO/asset management departments that will field bids and offers, oversee upkeep and handle sales.

Now with the huge amount of inventory we are finding that bank owned homes are now being listed with Realtors and advertised in the MLS. 

More good news for buyers of REO properties.  

Here is the information that I have received so far regarding Prospect mortgage being a servicer of Fannie Mae REO Properties

Prospect has been one of the three lenders selected nationally for the FNMA REO program, to roll on 11/15/08.  It is a 3% down, no Mortgage Insurance, no appraisal program at a discounted rate.

Also we are the preferred lender on all Indymac owned properties: If your buyer uses Prospect for their loan, Indymac will pay 6% towards buyers closing costs and pre-paids. 

We are still waiting for final details regarding this program and will post another article as soon as the information is released.

If you are considering investing in bank owned properties and would like to search homes for sale in the Tampa Bay Area you can do so by visiting our Real Estate Website at www.tampabaydwellings.com  Save properties, search by map area and look up what homes have sold for.  

For homes for sale by Indymac please feel free to email us at: info@thetamparealestateinsider.com or call 813 784 7744

TAMPA — Jim Spatz had never strayed far from Nova Scotia. But with a simple wave of the hand, he made his development company international when he became the new owner of The Place at Channelside.

Spatz, CEO of Southwest Properties in Halifax, joined forces with Armco Capital Corp.to buy the 243-unit condominium complex in Tampa’s Channel District for $21.9 million in a bankruptcy auction last week. He won’t close on the property until the end of the month, but Spatz already knows The Place will have to settle as a rental destination for some time to come.

“We’d like to sell units, but there’s just no market for that right now,” Spatz said. “We’re looking at a long-term horizon, maybe three or four or five years. But when the market recovers, and we believe it will, we’ll be ready to sell.”

A growing influence

As the American economy faltered, Spatz decided last summer that it was time to invest in Florida. He visited a number of properties for sale or facing foreclosure, but he didn’t get excited until he found The Place at Channelside, a victim of the nation’s crashed housing market.

A further enticement: the possibility of snagging it for less than $100 a square foot.

KeyBank N.A., trying to collect on $47.8 million it loaned to Key Developers GroupLLC, convinced a bankruptcy judge to auction the property. The minimum bid was $17.25 million, or 24 cents on the dollar.

Spatz flew to Tampa for the Oct. 15 auction.

Unknown locally, Spatz sat among about 75 people in The Place’s recreation room on the sixth floor with a view of Tampa’s port area holding a placard identifying him simply as “574.”

Within minutes of Fisher Auction Co. Inc.’s Lamar Fisher smacking his gavel, Spatz was high bidder for The Place at roughly $128,000 for each of its unsold 171 units.

“It’s a great location, and I think it’s going to get stronger over time,” Spatz said. “You have that proximity to downtown where all those jobs are, and people will want to be close to the food and entertainment there, too.”

Canada calling

In recent months, the U.S. dollar has strengthened against its Canadian counterpart after spending the summer almost even, but that hasn’t slowed the Canadian influence in the American housing market. Rod Anderson, an insolvency attorney with Holland & Knight, represented one of the losing bidders for The Place, who he would only identify as a Canadian firm.

“Florida is on a lot of people’s maps because a lot has happened here in terms of growth and development,” Anderson said. “We’re seeing opportunities here for some different players who are looking for a value price and have the deep pockets to be able to fund it and hold out long enough for the market to turnaround so they can have an exit strategy when the time’s right.”

Waiting it out

Rental demand remains strong in the Channel District where rates remain well over the submarket’s average of $1.19 a square foot.

A competing project, Grand Central at Kennedy, converted to rental in February and that 392-unit complex is now 95 percent occupied.

“There’s not a shortage of people who want to live downtown and have that lifestyle,” said Ken Stoltenberg, director of Grand Central developer Mercury Advisors. “Once you get over $2,000 a month, the pool of renters thins out pretty quickly. But if you keep it under $2,000, the market is pretty deep.”

Stoltenberg considers himself lucky he was able to hold on to Grand Central and wait out the market, but others with finished projects haven’t been so fortunate.

The Towers of Channelside LLC started January off filing for Chapter 11 bankruptcy protection after Wachovia Bank threatened to default on a $105.8 million loan used for construction. Key Developers soon followed with its own Chapter 11 for The Place.

Ventana TampaLLC gave its 84-unit complex on Kennedy Boulevard and Channelside Drive back to Mercantile Bank after it failed to repay $16.8 million.

But the hundreds of new windows lining Channelside Drive, once vastly dark at night, are brighter these days. Southwest plans to continue that trend once it is handed the keys to The Place.

“It had some rough times, but we’re glad there’s no stigma attached to it,” Spatz said. “It was caught in the same downward draft that many other projects were caught in, and I think when all of that clears up, we’ll be a part of the area where everyone wants to live.”

If you are interested in being on the list to receive information when the condos go up for sale and  pricing becomes available, send us an email  info@thetamparealestateinsder.com  Please reference “The Place” in the subject line.  Or call Rae at 813-784-7744