Are you a Shadow Agent?

After a recent discussion with a REOPro member, I was enlightened by a phenomenon that may soon be taking over much of our industry. I will refer to it as the “Shadow Agent” and let me explain why. A Shadow Agent is one that works with a 3rd party Loss Mitigation outsourcer to dispose of assets and the bank they are working on behalf of has no idea who they are. All the bank knows is this 3rd party outsourcer assigns the assets, manages the asset and closes the sale. The outsourcer does all this with a Limited Power of Attorney and therefore, the bank doesn’t keep any statistics on me and really could care less about who I am or how effective I am as an agent. Don’t think for an instance that this isn’t possible. I can guarantee you it is because, I myself am a Shadow Agent and have been one for about 9 weeks now. I won’t tell you who I work with because, I really don’t know how that would settle with my outsourcer but, I can tell you that when I called the bank for assistance on a particular file, they were completely lost….had no clue who I was or that my account was being handled by the outsourcer I was working with. In fact, this lender’s in house collections is still calling my clients and trying to bring the account current even though we are already at the BPO stage in their Short Sale. Now, make no mistake, nothing illegal is happening…….it’s just a complete lack of communication within the many departments of this servicer however, what makes me a “Shadow” is that the agent who would have had this REO….now…..isn’t going to get it because I will have already had it sold and closed before they ever realize their inventory is dropping and why. It appears that most of these Shadow Agents are working for Home Retention companies. They make contact with the homeowner and attempt to save the home from foreclosure however, with 73%-76% loan mod default rates as well as the White House HAFA mandate coupled with these Home Retention companies obtaining the Short Sale or REO business you can see how a traditional REO agent working direct with lenders and servicers are going to be put out of business. Shadow Agents, are you one, I am.

If you haven’t started moving your business plan towards working with Short Sales, what are you waiting on? If you don’t do it now, you may be missin…

Great article Jesse and this may be the way of the future, of which I'm on board. However, there are thousands of vacant homes in my market that will have no other way to go but REO. Reason being, is many of those previous owners are gone. HRT, and SS may slow and delay which is what the big banks want. But until the law changes, legally FC has to occur when assets are not performing and the timeline for sort sale has run out. Don't get me wrong, many banks are starting to offer D I L's. What do you think will happen to these properties. Eventually they are going to have to be sold. If you haven't seen what TA (Tenate Access is Doing) you would want to take a look. I made one vow years ago when I missed the first wave of REO's and was told it was too late for met to get in the business. That was to never get behind the train again, but to be on the forefront. Tenate Access , Home Telos, and a few others are where this market is heading. There will however always be a need for REO, it just may not be as popular and abundant. Great POST it makes one think....

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Comments

Beth Ross January 16, 2010 at 3:42pm

I am one, and glad to be one. It's great to help where I can!!
AJ Heidmann January 16, 2010 at 7:05am

Very interesting Jesse, I was totally unaware of this, so you've educated me once again.
Jesus (Jesse) Gonzalez January 16, 2010 at 5:47am

Hi Jonathan,

Make no mistake, REO will always have it's place......that I know beyond a "shadow" of a doubt however, as I expressed in my Blog on October 8, 2008 REO's hay day is dwindleing. Now, let's be clear, the market is a living, changing beast so, the political and local market could change so drastically that by tomorrow my opinion will have changed....but, that's unlikely.

Hi Jose,

Absolutely correct, a legitimate Shadow Agent works for a legitimate company...not some short sale investor flipper. Most importantly, it starts with Home Retention....not Short Sale Flipping.

REO's become extinct

If you haven’t started moving your business plan towards working with Short Sales, what are you waiting on? If you don’t do it now, you may be missin…
Jose Rivas (DGRA) CDPE, SFR January 16, 2010 at 2:47am

Great article Jesse, I think short sales will have a great impact in our industry in the next 2 to 4 years, and we need to be in the front of it, Jonathan is right, while most of the jonhy comelatelies are still trying to get REO listings competing with everybody and the good ole boys, we need to get in the short sale and DIL train.
What we need to be careful is that there are companies out there pretending to be outsourcers and promising the "approved" short sale listings, but first they want the realtors to give them all their short sales so they can negotiate them with the banks for 50% of the agents commission. To me that is a scam, I know the legit one charge a sign up fee, request some certifications, and they only want a 25% ro 30% referral fee on the listing side.
Debora Coelho Gordon January 15, 2010 at 7:01pm

Thanks Jesse, Here's to the Shadow Agent's!
Jonathan January 15, 2010 at 6:53pm

Great article Jesse and this may be the way of the future, of which I'm on board. However, there are thousands of vacant homes in my market that will have no other way to go but REO. Reason being, is many of those previous owners are gone. HRT, and SS may slow and delay which is what the big banks want. But until the law changes, legally FC has to occur when assets are not performing and the timeline for sort sale has run out. Don't get me wrong, many banks are starting to offer D I L's. What do you think will happen to these properties. Eventually they are going to have to be sold. If you haven't seen what TA (Tenate Access is Doing) you would want to take a look. I made one vow years ago when I missed the first wave of REO's and was told it was too late for met to get in the business. That was to never get behind the train again, but to be on the forefront. Tenate Access , Home Telos, and a few others are where this market is heading. There will however always be a need for REO, it just may not be as popular and abundant. Great POST it makes one think....
Katelyne Nguyen January 15, 2010 at 5:50pm

Great artile Jesse.
Jan Baron, RDCPro, CSP, BPOR January 15, 2010 at 5:31pm

I wouldn't mind the traditional REO agent being put out of business. A large number of them abused their position in a market that was already hammered. I hope 2010 is the year we finally get this REO inventory organized, and handled in a fair manner.
Namneet Dhaliwal January 15, 2010 at 4:59pm

Wow! this is an awsome article!
Cynthia McKenna January 15, 2010 at 3:57pm

Oh my, I am one too! I never thought of it that way....You certainly know how to place things in perspective.

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