Coastal Reo Solutions is a Myrtle Beach Reo property preservation and REO management firm, and today our thoughts turn to the Myrtle Beach foreclosure market and a startling new trend in foreclosures that is creating a high number of the bank owned properties here in the Grand Strand area.
A recent article in The Sun News stated the number of Myrtle Beach foreclosures filed by Home Owners Associations (HOA’s) have more than doubled (more…)
Good news for banks and commercial mortgage lenders was delivered recently by U.S. government banking regulators. They are recommending lenders work more closely with commercial borrowers to modify their commercial real estate (CRE) mortgages. They have become more aware of the negative burden that a high degree of defaults may cause on bank balance sheets. The Federal Financial Institutions Examination Council, which is comprised of the Federal Reserve, Federal Deposit Insurance Corp. and several other entities, said that responsible modifications to commercial real estate loans are often “in the best interest” of both borrowers and lenders.
More significantly, regulators announced that they will not penalize banks for performing loans (more…)
Q + A with Jason Ellis, who manages Troubled Assets for Coastal Reo Solutions of Myrtle Beach, South Carolina.
I recently had a chance to sit down and discuss the current climate of Myrtle Beach real estate with one of the most successful and knowledgeable foreclosed property specialists in South Carolina, Jason Ellis of Coastal Reo Solutions.
Q – Jason, what are you seeing in the Myrtle Beach home market right now?
A – We are experiencing a rise in foreclosure properties and short sales, (more…)
Coastal REO Solutions is a lenders best weapon in the fight to effectively evaluate, secure, maintain, list and commodify their foreclosure properties. A recent transaction with Horry County State Bank (HCSB) involving the foreclosed Calypso Motel in Myrtle Beach, South Carolina provides an excellent example of the complex nature of commercial REO properties and our ability to manage these complexities on your behalf. Our agent’s keen understanding of the Grand Strand marketplace, combined with their ability to manage a property to its fullest potential, provides a stress free experience and a strong return on investment for our clients.
In this particular situation, we were able to negotiate a much higher than anticipated selling price for the property, and in fact, the foreclosed motel was sold for more than the original listing price. Our marketing effort included a targeted mailing strategy, extensive buyer databases, online media programs uniquely designed to reach prospective buyers via email, MLS listings, blogs, newsletters, and carefully selected website placements.
With our goal to provide a single point of contact and accountability for clients of distressed properties, we implemented a series of measures to secure, operate and maintain the property. An immediate visual inspection with an eye toward any situation that might be a potential safety hazard or local ordinance violation was completed, as well as an inventory of personal property and motel equipment. Next, we began the task of limiting liability for the customer by ensuring all assets were secure from intrusion, theft and damage. Within 48 hours CRS had all locks replaced with new ones and every existing tenant’s lease was converted to a lease that we structured to remove liability from HCSB. We coordinated all third-party billing of necessary repairs, maintenance services, staff and the motel’s utilities into the Coastal REO Solutions name to provide a solitary accounting payout for HCSB. We also established property rental management procedures and handled new rental customers to maximize the cash flow stream of the motel during the foreclosure process.
In essence, we became the new management of the site to ensure continued proper, legal and uninterrupted operation until a new buyer was located and ownership was transferred from our client to the new owner.
Here is Debbie Guyette’s (HCSB) take on it, “Today’s Market is perhaps the most challenging financial market many of us have ever faced. As a Commercial Banker and Manager for HCSB I whole heartedly welcomed the efforts of Coastal REO Solutions. Their thorough needs assessment analysis reassured me that I had made the right decision. Jason’s attention to detail, informative reports, responsiveness and marketing strategies for the Calypso gave me the piece of mind that I needed in order to focus my attention on developing new business for HCSB. Jason succeeded in increasing revenues by 33% With the increase in revenues Coastal REO Solutions was able to negotiate a higher sales price for the Bank.”
These examples are really only a portion of the all the services needed to facilitate the process of keeping a foreclosed commercial property in a viable position to operate, thrive and begin a new life as a healthy functioning entity. We realize that most lenders are simply not equipped to deal with these situations, and that’s why our single contact system is designed in this manner. Don’t let another day go by with a perfectly functional foreclosed commercial operation languishing on your balance sheet, when Coastal REO Solutions can have it adding to your bottom line with minimum effort from your institution.
Contact us today to find out more about our programs.
Reports from The National Association of Realtors show that approximately one-third of home sales over the last few months have been either a foreclosed property or a short sale. The sale of a property for less than the mortgage owed to a financial institution is known as a “short sale”. In some cases, the remaining debt is written off by the lender, and in others, the borrower must make provisions with the lender to settle the outstanding debt. Theoretically, delinquent homeowners get out from under a mortgage they cannot afford, and the institution avoids the costly procedure of a foreclosure, even though they generally lose money in the process. The money lost on the short sale is usually less than the cost of the foreclosure option, so it has a decided advantage for the institution. The Treasury department is expected to announce a new policy that will encourage mortgage lenders to increase short sale attempts through a financial subsidy and provide standardized guidelines and procedures for lenders and REO professionals. The Treasury plan, which is anticipated to be instituted later this month, would give loan servicers a $1,000 “success fee” when a short sale is finished, according to short sale specialists that have seen a preliminary outline of the policy. The home owner would be given up to $1,500 to aid in relocation expenses, like the “cash for keys” program that various servicers are offering.
A short sale has been considered a stopgap measure to prevent a surplus of foreclosures for an institution, but recent trends have shown that fewer and fewer short sales are actually being approved or completed, resulting in the continued climb in foreclose properties in the marketplace. Some buyers have become frustrated with the process and choose to pursue other options because short sale transactions have been delayed for many months. This has been attributed to the lack of standardized procedures within the mortgage industry to manage these arrangements. Each individual institution may have its own set of policies, which presents a difficult avenue for realtors and their clients to pursue. Many lenders simply do not have the requisite staffing, knowledge and systems in place to process short sales in a suitable time frame for a buyer to take advantage of the bargain. Another problem is lack of experience and education among real estate professionals in working with these new marketplace options.
Here at Coastal REO, we are ahead of the learning curve dealing with short sales and foreclosed properties and recently completed a million dollar deal on a property in Myrtle Beach, SC. You can be assured that working with our team can prevent the time loss and potential revenue loss that comes with attempting to complete these complex transactions with an inexperienced agent. Contact us today to see how we can move forward with your particular circumstance.
Many news outlets are reporting officials from Deutsche Bank AG have recently released the results of a study that estimates the number of “underwater” mortgages will rise to nearly 50% of all U.S. mortgages by the year 2011. A mortgage is considered “underwater” when the borrower owes more on a property than the actual value of the property. Borrowers with loan-to-value ratios of 125 percent or more will increase from 14 percent to 28 percent the study concluded. A 14% decrease in home values across the board is predicted as well.
The analysts noted that lack of consumer confidence and cautionary spending would create even more loan defaults, as unemployment rates continue to rise and the housing market correction carries into 2010. They also foresee a potential rise in the number of borrowers who “strategically default” or “walk-away” from these negative equity loans to escape the underwater mortgage situation and improve their immediate financial situation, at the risk of being able to obtain mortgage financing in the future.
As foreclosure rates increase, once highly evaluated properties in a neighborhood begin to decrease in value, and some estimates put the loss of value as high as 9%. This depression of property values causes the remaining mortgages to go underwater, and creates a spillover effect on foreclosed properties and the generation of additional REO assets. An REO asset is one owned by a bank because it has not sold at auction, usually because the amount owed to the lender on the home is greater than the properties market value. This increase in “underwater” mortgages will inevitably lead to an increase in bank owned real estate. Coastal REO Solutions has many options and services available to lenders and banks to deal with these foreclosures, defaults and walk-aways. Contact us today to learn about all the options available to your institution.
Coastal Reo Solutions is at the forefront of receivership management for local and national lenders in Myrtle Beach and along the Grand Strand. Our experienced, reliable team is prepared to take control of your toxic assets. CRS’s primary goal in receivership is to protect the integrity of the asset and income stream by securing the physical property, accounts, and records. Our secondary objective is to establish management procedures that protect and preserve the asset during the transition period.
Coastal’s asset management group is properly acquainted with the court proceedings involved in the foreclosure process and the appointment of a receiver. Our experience gives us the capacity to participate in the legal process alongside our clients and their attorneys, ensuring the orders appointing the receiver are adequate in scope and authority. We provide the essential tools for a smooth conversion and the financial stability to maintain and generate worth in the REO asset. This service comes at a time when foreclosures can be expected to rise. Loan modifications are not going as quickly and smoothly as hoped for, according to a recent article from the Associated Press, and may lead to even more bank owned real estate in the near future. Through receivership, Coastal REO will transfer the risks and hassles of the foreclosure process from your institution, thus releasing your organization from potential insurance, maintenance, legal and local ordinance issues. This service can also be useful to banks by avoiding taking title of new properties that have been foreclosed and the associated problems of construction defect lawsuits or liability issues that can arise from a deserted and unsecured property or building site.
To find out if the receivership process is right for your institution’s situation, contact our knowledgeable team of professionals by email or give us a call at 843.839.8046. We look forward to working with you and for you during these difficult times.
608 16th Avenue N. Suite E
Myrtle Beach, SC 29577
Phone: 843.839.8046
Fax: 843.839.9406
info@CoastalREOsolutions.com
