The mainstream news media has only been promoting one story about the nation’s real estate market: It’s on fire! But just like all fires, eventually the fire runs out of fuel.
Today, Joe Varnadore and Eddie Speed will take you through some very eye-opening news stories that you won’t be seeing on the nightly news. Joe has scoured important industry news sources to bring you the most current and most significant stories and statistics that affect the world of real estate and note investing.
Eddie and Joe will interpret these news stories through the lens of their decades in the note business. Eddie has been saying that a wave of foreclosures was on the horizon and these news stories will show that the wave has arrived. They’ll reveal to you the names of big investment companies and hedge funds who are buying huge numbers of non-performing notes from Fannie Mae and Freddy Mac. Many of these loans could very well be showing up on NotesDirect very soon.
Eddie says the “point-of-no-return” for most delinquent homeowners is when they fall 90 days behind. That’s when they’re simply unable to catch up on their payments and have to sell their home or face foreclosure and lose their equity. In August, 750,000 homeowners hit the 90-day mark, so thousands of properties will be hitting the market soon. Record numbers of landlords are also not getting their rent checks.
The opportunities are huge for entrepreneurs who can structure deals to scoop up these properties. So click the link and be on the leading edge of the news.
1:40 | Joe Varnadore introduces Eddie Speed. First story is that Fannie Mae is selling off non-performing notes. They sold 11,100 non-performing notes totaling $1.68 billion in unpaid principal balance, and there are 2 million delinquent notes! Surprisingly the top winner of the sale (Barclay’s) paid 103% of the UPB (unpaid principal balance), but the legal balance which includes fees could be 20 to 30% higher, so they did buy at a discount.
5:40 | Freddie Mac also has sold $1.3 billion in non-performing loans. The Average Months Delinquent (AMD) was 23 to 36, which was before the pandemic started. Eddie says, “This is the first glass of water coming over the waterfall.”
7:48 | Single-family investor activity surges in 2nd quarter. This is the first summer surge in 10 years. They’re buying at the height of the market. Eddie says these buyers aren’t measuring all the variables, especially the shadow inventory that is about to hit the market.
9:30 | Zillow bought 3,800 houses in 2nd quarter, but will stop pursuing new purchases for the rest of the year. Contractor availability and material shortages are slowing down their ability to flip their inventory.
11:25 | Sundae launches platform for purchasing distressed properties. It’s a new company that buys and sells damaged/distressed properties with list of repairs needed.
12:48 | How landlords have been affected by the pandemic. Shortfall in rent has gone from 11% to 37%. 72% of all rental properties are owned by small time landlords who own 1 to 5 properties.
16:20 | Mortgage Monitor from Black Knight reveals delinquencies (not forbearances) have fallen to 4% in August, but are still 3X higher than pre-pandemic. In next 6 months they will have to sell or bring current. 2.5 million went from current to 30 days delinquent in first 8 months of 2021. 750,000 borrowers became 90-days past due in August alone. Eddie says the 90-day mark is often the “point-of-no-return” for catching up.
19:45 | Eddie leads into message about NoteExpo where we will talk about burned out landlords, delinquent notes, and who can qualify for a mortgage. This will be the only major, live note convention of the year, with an amazing lineup of speakers.
21:40 | Forbearance plans fell below 1.6 million for first time since pandemic started. 450,000 forbearance plans expired in September, 500,000 will expire in October, with another 137,000 in November. Some will qualify for an extension, but not everyone. They’ll have to sell or face foreclosure. New forbearance plans are up over 25% since mid-August, mostly driven by FHA and VA loans. All in, more than 850,000 forbearance plans will expire in 2021.
26:00 | Eddie says this shows opportunities, and where the market is going.
26:40 | Austin up 45% Phoenix up 33%!
27:00 | Wrapping up, about 3.5 million loans delinquent, but only about 500,000 before the virus (about 1% of all loans). Back in April, we were saying the wave was coming. But now it’s here. Eddie has never seen such a unique opportunity in non-performing notes. Plus, these are easier to work with than back in the Great Recession of 2008 when values were declining sharply.
30:15 | Since America is not producing as much oil and we’re having to import more, West Texas Intermediate crude oil is now at $82.65 per barrel. Oil price is a big driver for interest rates and inflation.
31:45 | China tests hypersonic missile test (5,000 mph). This is concerning because we’re not prepared for this. China home sales are down 19.7% YoY in August. There are entire cities that are vacant.
33:44 | Joe closes with a message about NoteSchool.com/TV for our popular 1-day classes