Foreclosure numbers are booming

By Christine Dunn

Journal Staff Writer

After a foreclosure, vacant houses in Providence are sometimes targeted by thieves who break in, remove copper piping and sell it to scrap dealers. The payment for a pound or two of copper “is enough for a meal,” said Edward E. Manfredi, a real estate agent who specializes in selling REO — real-estate owned — properties for banks.

Keeping foreclosed properties secure before they are sold is part of Manfredi’s job. Locks are changed. “For sale” signs are placed out of the reach of vandals. Most REO properties are sold “as is,” but if there is a problem that may lead to serious deterioration of the property, Manfredi will recommend that the owner — the bank — pay for repairs, and he will round up bids for the job.

On a recent Friday afternoon, Manfredi stopped at a two-family house in the Hartford Avenue area of Providence. He was there to meet the son of the former owner, who had been living in one of the apartments. Manfredi had to ensure that all of his possessions were out of the house, and he had to deliver the $2,000 the bank had promised him, to avoid the inconvenience and expense of a lengthy eviction process.

Several cabinets in the kitchen had missing or broken doors. The heating elements in the electric stove were gone. The bathroom and floors needed a good cleaning. But Manfredi decided that the apartment was sufficiently “broom clean” — empty of trash and personal possessions. He gave the young man a check. “Most people opt for the money,” Manfredi said. “I tell them, ‘Look, this is not the Alamo.’ ”

Manfredi didn’t know the whereabouts of the former owner, a woman from the Dominican Republic, but he had already paid the tenant of the other apartment, a mother with several children, to leave.

Manfredi said he heard the tenant had been paying $950 a month for the small apartment with worn floors and dirty walls. He shook his head. “And it’s a dump,” he said.

Manfredi stood on the concrete front steps of the two-family house, surveying the street. When he was young, he said, he didn’t live far from here. “This used to be all Italian [families]…,” Manfredi said. “This used to be a pretty nice neighborhood.”

Within minutes, Manfredi’s locksmith had installed a new lock on the front door of the newly empty apartment. Within a few weeks, the bank will tell Manfredi what the asking price will be. Then the house will be listed for sale.

The marketing effort will be no-frills, Manfredi said. No one will be painting the interior, washing the floors or planting flowers outside to make the house look more attractive. Manfredi said he guesses banks are already losing an average of $30,000 on each REO property in Rhode Island, because in so many cases, the outstanding mortgages are higher than the property’s market value. So the banks are by and large unwilling to spend more than absolutely necessary to sell their REO inventory.

The Rhode Island Association of Realtors said it does not track how many houses, condos and multifamily residential properties in the statewide Multiple Listing Service are REO, or bank-owned, properties. And Walter Molony of the National Association of Realtors said that number is not tracked by his organization, either. Bank-owned properties are sold in a number of ways, through auctions and private sales, in addition to the usual MLS route, Molony said. But he added that the growing number of foreclosures is expected to have an impact on the real estate market.

For real estate agents like Manfredi, the subprime mortgage foreclosure crisis means that business is booming. Manfredi works for Abbott Properties, a Warwick real estate firm that specializes in REO properties. Before he went into real estate, Manfredi owned his own packaging materials manufacturing business in Smithfield. He sold his business and thought he would try his luck in commercial real estate. But he found he had a knack for the REO market. “It’s a little bit more black and white [than the traditional real estate business],” he said. “It’s a little bit more cut and dried.”

He said being a business owner gave him the edge, and the appreciation for the bottom line that is so necessary in his current line of work. As a boss, he said, he became skeptical when employees would report “the death of the same grandmother seven times, always on a Sunday,” as an excuse for not reporting to work on Monday. As an REO agent, “believe me, I’ve heard every story,” Manfredi said.

Mark Reo, owner of Reo Properties and Creative Foreclosure Solutions, is a builder, property manager, landlord, and foreclosure consultant. His office is on Reservoir Road in Cranston. He said he thinks this is a good time to buy property, including REOs — but only if he can get the right price.

Reo said he has purchased six REO properties recently, but would like to start buying them “in groups of 10 or 15” directly from banks. “I’ve been banging away at it. At the banks … it’s hard to get to the right person ... before they give them to the realtors they have relationships with .”

“A lot of these banks now … they have 300 REOs instead of 30. … I’m here to help them,” Reo said. Because the banks want to reduce their REO inventory, Reo believes they are willing to negotiate on price.

“I can suggest almost anything and I have their ear,” he said. “Because it’s a big, big problem.”

“[REO is] a little bit more black and white

[than the traditional real estate business]. It’s a

little bit more cut and dried.”

Edward E. Manfredi
real estate agent

Article Source http://www.projo.com/business/content/HO_afterforeclosure0401_04-01-07_4L4V3TH.27b808d.html