Sarasota foreclosures force mortgage lenders to explore different liquidation methods. Make no mistake, rising house foreclosures can't be handled through typical liquidation routes or by standard Realtors. Further, property investors cannot absorb the number of affected properties currently (and others about to be) taken back. How terrible is it in true figures? In Sarasota County, 263 new home foreclosures happened August 2010 and 491 new property foreclosure filings (Lis Pendens). Definitely, the Sarasota market may keep getting even worse.

Federal government HAMP, HAFA and tax credits to buyers have not slowed down house foreclosures and substantially reduced inventory of affected houses. Industry specialists concur that banks/debt holders must apply liquidation strategies outside what they've been doing for four years:

1. Loan modifications are failing to slow foreclosures.

2. Tax credits have ended, generating more distressed houses and few prospective buyers.

3. Mortgage lenders cannot push such houses off their books fast enough, without giving them away to real estate investors who only purchase at 30-40% of fair market value.

Mortgage lenders are on the hot seat. Either they significantly decrease real-estate-owned (REOs) or they face the Feds coming in & closing down the financial institution. To save their banks, a lot more mortgage bankers are reviewing 2 alternative liquidation techniques:

Option #1- Banks provide assignments on affected packaged REO properties to corporate and business real estate investor for 50-60% of FMV, not the typical 20-30% for volume REOs. Lender quickly switches a non-performing into a performing asset without having bulk REO buyers demanding extreme reductions.

Option #2- Bankers allow costly real-estate-owned (REOs) to be presented as LEASE OPTIONS, quickly tapping into the 43.4 MILLION individuals whose fico scores at 599 or lower prevent them from shopping for or leasing (in most cases today). This is a managed lease option plan - the offer finds, screens & manages the home and renters throughout term, cash-flowing the house and switching non-performing into performing assets...with no large special discounts.

Benefits:

1. Bankers don't (have to) " give away" houses at sharp discounts, shedding more book value.

2. Lenders do not bear ongoing (and downright costly) routine maintenance expenses.

3. Neighborhood property prices aren't further smashed when troubled properties get liquidated at steeply reduced selling prices.

4. Foreclosed (previous) house owners come to be "homeowners-in-training" via the lease option, thereby serving to stabilize communities.

5. Mortgage lenders need not inventory houses (with extreme maintenance/tax/insurance costs) while falling list price simply to sell to the the few bargain seekers with cash or financing.

For four years, bankers have tried to manipulate the number of troubled houses hitting the real estate market. They had to. Bankers know they weren't able to then or now deluge the housing market with more affected inventory. Market (especially once the tax credits ended) is extremely soft in Florida. Therefore, lenders have put the skids on taking back properties, for better or worse. On one hand, it is great that bankers have not repossessed properties at the speed they legally could take them back. We are able to attempt to burn through a little of the supply. The flip side, however, is the "shadow inventory" considered to be MILLIONS of houses. These properties are empty (largely), filled with mold (generally) and without air conditioning, burning up in Florida's heat and humidity. Yes, these are properties sitting empty, neither listed on the market nor maintained. Shadow properties degrade and kill the comps if/when they eventually offer for sale. Taken back real estate going back to banks after several months of judicial foreclosure course of action (i.e. through the courts) also destroy comps if/when they sell...eventually. Real estate information provider RealtyTrac states roughly 250,000 houses in some stage of foreclosure promoted through the second quarter. Great news...on one hand. The other side of the story is that these REOs sold for about 26% less than non-foreclosed homes. Make no mistake, REO sales harm town house values, triggering banks/mortgage debt owners to eliminate more money.

Sarasota real estate agent Mike Payne would like to introduce you to former Delaware banker turned entrepeneur, whose remedy can help mortgage lenders prevent deep-discounting troubled real estate; help 43.4 Americans who suffer from a bad credit score & help the local market strengthen. If you are a bank decision maker interested in seeking 2 inventive liquidation techniques for dispossessing houses, please call Mike Payne @ 941-914-9980. In hard hit areas (not just Sarasota foreclosures), bank-owned properties are sitting, forcing banks to slash prices, especially luxury properties. These two options provide a formidable alternative.