And the Circus Begins

I was wondering how long it would take for me to run into my first "broker joker" of 2010. Well I've now dealt with two and it's only Jan 6th.

I have a question (real question feel free to respond). How can one agree with my Bulk REO Fact vs. Fiction posts, tell me they agree with my data and experiences, and then ask me to jump through the VERY SAME HOOPS to get access to their "source" that they just finished agreeing with me is broker-joker BS?

I just don't understand.

On a positive note this year has gotten off to a fast start. Several offers are in to banks and several more are in the pipeline.

I wish you all a great 2010. Flourish and Prosper!

Happy New Year! Have any good Intel?

Happy New Year!

I'm glad 2009 is over. Hopefully we are one step closer to a true "marketplace" for distressed assets.

As 2010 begins, I am looking to gather as much ACCURATE information as I can to help one and all navigate the "landmines" of last year.

I am open to "anyone’s" data.

All that I ask is to PLEASE make sure you vet the data.

Meaning: is it firsthand (from the source) or down a chain of people. And if the latter, were you able to pull it back to the "source".

Feel free to email me at ronmeyerson@gmail.com

Bulk REO, Fact vs. Fiction Part VIII: "What's the REAL Story on Shadow Inventory"

I just came across this report and it validates everything I've been saying for the past year.

Amherst Securities just published a white paper entitled "Housing Overhang/Shadow Inventory = Enormous Problem", and per their numbers, the housing market is FAR from "recovery".

Rather than recap the blog post or the white paper (which I HIGHLY recommend you read) I simply have this to say:

The next time you are speaking with an REO asset manager at a bank, any bank, ask them about this report. Send them this report. Get them to CONFRONT the numbers in this report.

Maybe then we can shake these banks into reality, and they will start releasing their inventory in the volume and pricing that the private markets (and my clients) will pay.

Bulk REO, Fact vs. Fiction Part VII: "Fraud, Misrepresentation, and the Handling Thereof"

I don't know how I got this hat, but I guess someone HAS TO DO IT.

Two days ago my client and I were put on a call with what was supposed to be an asset manager for Freddie Mac. That person never made it to the call. Instead another "broker" got on the call and started dictating the way my client was to proceed including sending POF to this "asset manager". We said "fine", and simply wanted a confirmation that this "asset manager" in fact works for Freddie and has the authorization to sell SFR REO on their behalf and thus has a fiduciary mandate to vet potential buyers (and thus ask my client for POF). My client told this "broker" they will gladly POF to Freddie, but not to a "broker" or "title company" unless either are charged with that duty (and can be verified) by Freddie.

The pool of assets was an all AZ deal (a healthy 8 figures) that was allegedly for sale for around 50 cents of current BPO.

As the call proceeded we come to find out that this person DOES NOT work for Freddie Mac at all and is not an asset manager, but instead some "third party" that Freddie uses to sell bulk SFR REO. We said "great" let's do a quick verification of that fact and we move forward. The "broker" (which I have now learned is an attorney) hemmed and hawed and wouldn't let us do any verification and then wanted to terminate the call because we wouldn't follow "his" protocol stating "this isn't going to work out". ARE YOU KIDDING ME!

I then called Freddie Mac to inquire as to who this person was (as we now had the name of this "asset manager"). I spoke to the Director of Bulk REO sales at Freddie Mac (a very nice woman). She informed me that Freddie is just starting to entertain bulk sales, and there is an involved registration/vetting process for any buyer. They sell at 75-80 cents off current BPO, and most importantly the "asset manager" I was dealing with was in fact nothing more than an investor currently going through the approval process to buy in Bulk from Freddie himself.

Once again not a single piece of data that was represented to me or my client was true. A COMPLETE MISREPRESENTATION.

I don’t know about you but I am no longer willing to tolerate the fraud and misrepresentations I encounter on a weekly basis. The other day someone told me that many "brokers" don't like me. That I'm too abrasive, that I'm too direct. Well that may be true. But I ask you: what would you do when your livelihood is at stake and you've lost nearly a YEARS worth of income due to the lies, fraud and misrepresentations of others. Ethics is severely lacking in this industry and I am willing to be "the bad guy" if that means I can help curb (or get rid of) the liars, cheaters, scammers and fraudsters that we are all tired of dealing with.

I am confident the real players will welcome my stance, my “aggressive” due diligence, and continue to work with me. And those that protest, get upset, or otherwise deride me for this post, well those are the ones we ALL NEED TO STAY AWAY FROM ANYWAY.

The FDIC is BROKE! Now what?

This past Tuesday the FDIC announced not only was it broke, but in the RED for over 8 BILLION dollars. Now what?

As discussed in my previous posts the FDIC has taken back over 100 banks this year alone, with another 1000+ on their "watch list". And while the FDIC is currently working diligently through their 5 distressed debt third party sellers, as well as their defaulted 1st Resi PPIP program, to my knowledge they have not yet announced any plans for the sale of the thousands of SFR REO they currently "own".

And now with the FDIC in the RED, distressed banks should be HIGHLY MOTIVATED to sell their distressed assets and SFR REO inventory.

January should be a VERY interesting month!

Another One Bites the Dust

Working in distressed assets is kind of like playing pin the tail on the donkey on the edge of a cliff. Not only can't you see, but one wrong move and you're SPLAT!

My optimism and “beingness” to succeed is being tried at this moment. Another one of my deals just all but died (and the carrot being dangled seems just as unreal).

This was a note sale on a large retail center. The property is almost done with the foreclosure process and REO is just around the corner. Our buyer (and when I say "our" I mean I was an intermediary/referral party and didn't control the buyer or the bank) repeatedly stated they wanted to buy the note before foreclosure, issued an LOI, and when the bank finally said "bring us a PSA" it was all but a done deal. At least that is what we were told.

Then at the 11th hour we get an email listing a litany of objections as to why they won't be consummating the trade. Most of the email was BS and simply "fear" and "lack of understanding" of the deal. The carrot was "we'll wait till it goes REO and revisit the trade". I won't hold my breath.

And like that another 6 figure commission is all but a memory.

I have a stomach ache. I should be used to this by now. I'm not.

I'll get over this loss soon and continue to "warrior" on.

But right now I feel like screaming on the TOP OF MY LUNGS until I can NO LONGER SPEAK.

In fact, I think I'll do just that.

The First Barrier to Learning (or doing business); Thinking You Already Know

We are all guilty of it. Colloquially it's called "knowing enough to be dangerous" or "having enough rope to hang yourself" or some such other expression. But in business, such a barrier can mean the difference between doing a deal, and going home.

I used to think I knew it all. Then, as I matured, I realized I didn't even know what I didn't know.

This is acutely true in business. I can't tell you the number of times I was on a deal, thought I had it under control, only to realize (sometimes begrudgingly) that I had no clue what was going on, what the seller or my buyer were talking about, and I had to go research just to keep up.

If you’re lucky, no-one will find out until after the deal is done, and you've been paid. If you are unlucky, no-one will do business with you from that point forward.

It's hard sometimes to "eat crow" or "swallow one's pride" or "admit one was wrong" or "didn't know". But I think the most offensive and disingenuous action a person can take, is to continue to assert their "rightness" or "knowledge" even in the face of overwhelming proof to the contrary.

It takes "a big man", courage, to admit you are "wrong" or "really don't know what you are talking about".

I run into this scenario often in my practice. It happened again just yesterday (and continued today). A perhaps well meaning "broker" (an unlicensed "investor" and "entrepreneur" I might add) spouting off his "knowledge" when it was obvious that he had KNOW IDEA what he was talking about. At best he was erroneously forwarding someone else’s false "knowledge" or false data as true, at worst he was just unintelligent, and arrogant.

I know I've certainly made the same mistake. Perhaps still do. But I have learned to be humble in the face of contrary data that clearly demonstrates that I was "wrong" or at best "was missing data".

In fact, I have as a standing rule, that if anyone can prove in writing my data to be false, I will humbly "eat crow" and admit I was wrong. I would rather KNOW than be "RIGHT"!

So a lesson to us all (and lest one think I think I have all the answers, I KNOW I do not). Have the courage to confront the truth. And even more, know when you are "in over your head" and seek to learn, not assert your "knowledge".