Williams & Williams To Acquire Mortgage Investors' Collateral Risk
A major stumbling block with real estate-owned properties is that real estate is not liquid. The longer a property stays vacant, the faster the property deteriorates and therefore the faster its value depreciates. These types of losses don't just affect homeowners and communities but also investors, as they can negatively affect their cash flow and net returns.
As a means of increasing the liquidity of REO properties, W&W Assets, a division of the Tulsa, Okla.-based real estate auction firm W&W, launched a new initiative: the direct acquisition of mortgage investors' collateral real estate risk.
The newly created division is actively pursuing bulk portfolios and contractual flow purchase agreements of foreclosed real estate assets from Wall Street investors and other financial institutions. The business development group, led by vice president Toby DeWeese, is spearheading the purchases and structured agreements in light of the increasing abundance of traditionally illiquid real estate.
"There is not a single financial institution I am aware of that likes having REO properties on their books," said Dean Williams, president and CEO of W&W. "From the traditional 'asking price' marketing perspective, real estate is illiquid. It immediately starts deteriorating when vacant and held for sale, while also costing the owner/seller real money to carry, market and close. These losses affect everyone, not just homeowners and their communities and can severely restrict investor cash flow as well as net returns."
Mr. Williams added that with this new initiative, Williams & Williams is now able to structure direct and ongoing purchases of these assets in the hundreds or thousands of properties per month.
W&W will work directly with trustees for bond holders, as well as investors and lenders on the opportunities available to completely change how they manage the REO risk that accompanies foreclosures. The company generally requests only two seller warranties, property vacancy and marketable title.
W&W also auctions thousands of properties monthly for direct sellers. It was time to leverage wealth management services directly to those who own the bulk of mortgage related real estate risk, said Mr. Williams. "Getting these non-speculative seller's assets out of the speculative mix of traditional real estate sales just seems to makes sense for everyone involved.
"Too many cities in the U.S. are already suffering from the blight caused by vacant housing inventory sitting endlessly for sale at speculative 'asking' prices. Our services help avoid these systemic risks and costs for real estate sellers, as well as buyers."
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