01-15-2012, 07:36 AM
The advertising of foreclosures alone makes their business model profitable, with no other prior newspaper or journalism experience. According to the story we're only about 40% through the foreclosure cycle so far, maybe less, so they expect business to boom for years. They say adverting of foreclosures is one of the most lucrative parts of the process: http://www.oregonlive.com/business/index...s_mor.html
Northwest Trustee Services squeezes more profits from home foreclosures with one-stop model
Excerpt: "Rim Publications LLC is bullish about the newspaper industry.
The Bellevue, Wash.-based company and its affiliates have in the past two years bought or started up six weekly newspapers in the Northwest. It could buy as many as 50 more in the Western states, said Rim co-founder Stephen Routh.
Strangely, the moves have more to do with the booming and controversial business of home foreclosures than with journalism.
Routh is also CEO of Bellevue-based Northwest Trustee Services Inc., whose one-stop shopping business model has made it the largest foreclosure trustee in the region. Owning newspapers will reduce costs for Northwest Trustee's lender clients and could make foreclosures more profitable for Routh's firm.
Oregon and most other states require that lenders or their trustees run a series of legal notices in the local newspaper before they auction off a foreclosed home. These legal ads, which generally cost $500-$2,000, are one of the largest expenses of the foreclosure process.
Rim's ambitions provide an intriguing look at the U.S. economy four years since the great crash of 2008. Routh and his partners are basing their investment on the expectation home foreclosures will continue at their unprecedented rate for years to come.
Meanwhile, the beleaguered state of the newspaper industry is making Rim's initiative surprisingly affordable. And though some newspaper publishers decry Rim's entry into the industry, others can't afford to make waves. For many small-town papers, foreclosure notices have become one of their largest revenue sources.
Routh, who has no journalism experience, vows to be a good steward of his company's newspapers. But he makes clear the acquisitions are all about his business of foreclosures. "I don't claim to be a journalist; I'm a businessman providing a service," he said. "We have to publish. It makes sense to control the process."
MORE FORECLOSURES AHEAD
Four years into a painful economic downturn, the tsunami of home delinquencies, defaults and repossessions shows no sign of slowing.
Routh expects foreclosures to actually pick up steam in 2012. "There's misery coming," he said.
An estimated 2.7 million Americans -- more than 40,000 in Oregon -- have already lost their homes, and experts figure millions more will hand over their house keys in coming years. Estimates of future foreclosures vary wildly, from fewer than 3 million to as many as 10 million.
The glut of repossessed homes has contributed to a 30 to 35 percent decline in home values and a staggering $7 trillion loss in home equity, according to the Federal Reserve.
Today, experts say, 12 million homeowners, about one in five, owe more on their mortgage than their house is worth. Homeowners who are underwater on their mortgage are much more likely to walk away from their mortgage, reasoning that it makes no sense to continue to pay into a bad investment.
Given that enormous pool of potential defaults, experts estimate it will be 2015 or 2016 before the crisis eases. "We're about 40 percent through the snake's belly," said Nancy Koerber, executive director and founder of Good Grief America, an anti-foreclosure activist group based in Medford. "We won't begin to hit bottom until 2015."
Routh agrees with the dismal outlook: "I'm pessimistic about housing getting better anytime soon..."
Northwest Trustee Services squeezes more profits from home foreclosures with one-stop model
Excerpt: "Rim Publications LLC is bullish about the newspaper industry.
The Bellevue, Wash.-based company and its affiliates have in the past two years bought or started up six weekly newspapers in the Northwest. It could buy as many as 50 more in the Western states, said Rim co-founder Stephen Routh.
Strangely, the moves have more to do with the booming and controversial business of home foreclosures than with journalism.
Routh is also CEO of Bellevue-based Northwest Trustee Services Inc., whose one-stop shopping business model has made it the largest foreclosure trustee in the region. Owning newspapers will reduce costs for Northwest Trustee's lender clients and could make foreclosures more profitable for Routh's firm.
Oregon and most other states require that lenders or their trustees run a series of legal notices in the local newspaper before they auction off a foreclosed home. These legal ads, which generally cost $500-$2,000, are one of the largest expenses of the foreclosure process.
Rim's ambitions provide an intriguing look at the U.S. economy four years since the great crash of 2008. Routh and his partners are basing their investment on the expectation home foreclosures will continue at their unprecedented rate for years to come.
Meanwhile, the beleaguered state of the newspaper industry is making Rim's initiative surprisingly affordable. And though some newspaper publishers decry Rim's entry into the industry, others can't afford to make waves. For many small-town papers, foreclosure notices have become one of their largest revenue sources.
Routh, who has no journalism experience, vows to be a good steward of his company's newspapers. But he makes clear the acquisitions are all about his business of foreclosures. "I don't claim to be a journalist; I'm a businessman providing a service," he said. "We have to publish. It makes sense to control the process."
MORE FORECLOSURES AHEAD
Four years into a painful economic downturn, the tsunami of home delinquencies, defaults and repossessions shows no sign of slowing.
Routh expects foreclosures to actually pick up steam in 2012. "There's misery coming," he said.
An estimated 2.7 million Americans -- more than 40,000 in Oregon -- have already lost their homes, and experts figure millions more will hand over their house keys in coming years. Estimates of future foreclosures vary wildly, from fewer than 3 million to as many as 10 million.
The glut of repossessed homes has contributed to a 30 to 35 percent decline in home values and a staggering $7 trillion loss in home equity, according to the Federal Reserve.
Today, experts say, 12 million homeowners, about one in five, owe more on their mortgage than their house is worth. Homeowners who are underwater on their mortgage are much more likely to walk away from their mortgage, reasoning that it makes no sense to continue to pay into a bad investment.
Given that enormous pool of potential defaults, experts estimate it will be 2015 or 2016 before the crisis eases. "We're about 40 percent through the snake's belly," said Nancy Koerber, executive director and founder of Good Grief America, an anti-foreclosure activist group based in Medford. "We won't begin to hit bottom until 2015."
Routh agrees with the dismal outlook: "I'm pessimistic about housing getting better anytime soon..."