Servicers Expect REO to Flood Market in 2008.(Conference notes)

Hollywood, FL -- Lots of new real estate-owned inventory will be coming into the market during the remainder of 2007 and into 2008, and it will be tough to unload, economist Christopher Thornburg told attendees at the REOMAC Fall Conference here.

Cut the prices on these homes and sell them now, because it will be hard to get them off your books, said Mr. Thornburg, who is a founding partner of Beacon Economics. Around 1,100 attendees comprised of real estate agents, brokers, outsourcers, property managers, title companies, attorneys and lenders attended the show.

Mr. Thornburg said the peak of adjustable-rate mortgage resets will occur in mid-2008 and there will be a first-quarter recession. He said the credit crisis is not over and real estate prices will fall 20% before the worst is over.

The commercial sector will be hit next, as the retail and office sector are not looking well. Mr. Thornburg said that Congress is looking into three bills to change the bankruptcy law and get rid of foreclosures. If these bills are approved, a bankruptcy judge would take control of the borrowers house and other assets and rewrite the borrowers mortgage. Borrowers who took out loans during the last three years would qualify under these laws, he said.

REOMAC president Mary Best Brill emphasized time is of the essence in the REO industry. Time has become the most precious thing we have. In this market, it is more evident than ever before, she said. This is a tough market. Its the most unusual weve seen.

The 2007 fall conference was unlike any other previous show. This year REOMAC brought in a sheriff and housing judge to discuss blighted areas as part of its education program.

For the second year in a row, conference attendees got motivated before attending sessions on the current market and the high volume of defaults. They listened to Jay Rifenbary, president of the Rifenbary Training and Development Center and author of the best seller, No Excuse! Key Principles for Balancing Life and Achieving Success. He stressed how important it is for people to be accountable for their actions and encouraged listeners to think about relationships with other people, including families and co-workers.