Michael Nierenberg has spent some time dealing with global mortgages, and as Managing Director for Fortress, has has some opinions and insights about foreclosures and how they affect everyone involved.
Investors and borrowers have plenty of decisions to make when entering foreclosure. Micheal Nierenberg notes that the housing crisis in 2007 caused a spike in foreclosures, affecting about 4% of all properties. This means investors lose between 40% and 50% of their initial investment. This makes loan modification an attractive option, hopefully to recoup an investment. Where this takes place can complicate that strategy.
Micheal Nierenberg says that some states can be so judicious that they drag out foreclosures in the courts, increasing the rates of foreclosures. Investors may the face challenges when selling off these properties. This is the reason for many auctions, where investors try to get the amount of the outstanding debt and cover legal costs from the foreclosure process. If properties don’t sell, and if courts allow foreclosures to pile up, an area can see changes to rent and property values.
Noting this, Micheal Nierenberg points out that banks often want to move through foreclousres as fast as possible. While mortgage service companies try to work with borrowers to try and get the account back in good standing.
Micheal Nierenberg sees foreclosure as a no-win situation for all involved. Companies like New Residential Investment Corp. has chosen a different route by getting loans to re-perform. For them, its lifted their return on equity to 20%.
Learn more about Michael : https://www.dailyforexreport.com/trusted-hands-new-residential-investment-corp-executive-leadership-team/