Posted by Rolfe Kurtyka on May 05, 2000 at 23:28:23:
Steve;
Thanks for your input.
The REO’s are listed, but the listing is simply a formality. The purchase is arranged well beforehand. I just closed on foreclosure purchased from a wholesaler, who, along with an exclusive handful of other investors, had toured and arranged purchase on dozens of forclosures well before the property was ever made available to the public. The properties are “listed” after the deals are made. The fake listing allows the REO agent to claim the property had been listed.
Rolfe
Is this legal? Banks exclude bidders on REOs - Posted by Rolfe Kurtyka
Posted by Rolfe Kurtyka on May 05, 2000 at 22:37:42:
Hello CRE;
In central Minneapolis, it is almost impossible to buy a foreclosure directly from a bank or mortgage company. For several years, most REOs have been sold to a small, exclusive group, then resold to the likes of me, at a 30% to 100% mark-up.
I spoke to some REO people about this. They said it’s easy for them this way–reliable buyers, and all cash deals. But I smell a rat. When does this cozy little club become a little too organized? Certainly, the mortgage companies could do better on the open market.
Rolfe
Re: Is this legal? Banks exclude bidders on REOs - Posted by SCook85
Posted by SCook85 on May 05, 2000 at 23:06:14:
Rolfe,
A bank, just like a private seller can sell a property to whoever they want. They can sell for less to others if they choose. However, if you are dealing with a large bank, most of them have it written in their corporate charter that all REO’s must be listed. This is done to prevent their employees from becoming rats. Most of the smaller banks that I deal with do not have such a provision in their charter, thus they can deal with whoever they choose.
Steve