BAD Fannie Mae Listing Agents

We have an agent in this area who lists with Fannie.  Frequently the utilities are not on when I go to show these properties.  The showing agent cards are piled on the counters, the places are freezing cold, so on and so forth.  Yet, they keep getting the listings.  I showed one today in which a disconnect noticed was hung on the front door for all to see...Yes, you got that right.  The power had been shut off due to nonpayment.  WHY????  Why do these agents keep getting the listings?
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  • Terrance,

    Some times you don't get reimbursed. It depends. The procedures are strict and demanding for reimbursements. If you are one day outside of their guidelines for billing, you do not get reimbursed on many. This happens a lot with utility bills. The utility companies cut the bills once a month. The reimbursements require 21-day submissions. So many of them do not get in time.

    Yes, many, many of my REO listings pay only 1000.00 to the Listing agent. Some pay only 300 or 400. I have a regular account that wants to pay 1500.00 tops for any listing they send. That is 1500 to be split between the list and selling agents. I always tell this asset manager, I can not possibly work for this nor will a selling agent even want to show their properties for this fee. I always make a minimum of 1000.00 to the selling agent or I will not list the property.

    Banks wonder why their properties sit on the market for extended times and suffer so much damage. They get what they are willing to pay for IMO. Agents who can not afford or do not want to do what it takes to do the job well. The other answer is, no selling agent is going to waste a buyer on a very low commission property if they can help it.

    The only way this will change is when we all start valuing our work and profession more than we evidently do.

    For all the REO agents who are in the field already, it is time for changes and some respect of all the agents who are good REO agents. It is time to get the lazy agents who do not do their job and make us all look like we do nothing, out of the REO industry. It is time for us to stand up and request to be paid at least minimum wage for all the "extras" we now are expected to do for free just to be assigned the listing. Evictions cost around 5 to 7 K if done through the Sheriff and the attorney. We do CFKs for nothing! Why? We used to get 1500 to 3000 K for every successful CFK we did and we saved the banks millions on these. Now we do them for free? You can bet your life the foreclosing attorney does not lower his fee to get the file. We used to be paid 3.5 % for a listing and there was no referral fee. There was a 2500.00 to 3000.00 minimum commission, now there are some with no minimum Again, why? We used to be paid a 50/ 50 split and now many REO companies demand we pay the selling agent 3 to 3.5 while paying the agents who maintain and care for the asset only 2 % . The asset companies are completely against even splits to their "VALUED" listing agent who do all the work for them.

    HUD tried giving their listing agents no commission for listings. HUD stated "the sign in the yard of a HUD owned property afforded the agent many buyer contacts". This went on for at least a year. HUD soon discovered agents did not want their listings with no commission for all the work and a few possible buyer leads. HUD began paying 2 %.

    Which the agents seem grateful to get now.

    Now Altisource (Ocwen) is doing in house listings with one or two in house agents per state and using the Real Estate agents for $ 40 BPOs only. Altisource's properties are suffering and loosing value drastically. They are now learning the true value of good local REO agents.

    We are not valuing ourselves and the banks are not either. This business has changed, so we as REO agents must begin to protect and value our selves. We are working Real Estate agents, lending money, being subcontractors, eviction people, negotiators for vacancy, general contractors and more, all for 1 to 2.5 percent and we are loosing money on many of these properties. I believe we all need to contact NAR and let them know with, calls and letters, what is happening and where it is leading to in the near future. Some of the largest banks are now expecting the listing agent to pay up front repairs up to 4500. With no interest, no service charges or even with a time limit for reimbursements. We need to become proactive before it gets worse. To the "newbees" or agents who want to enter this REO field, don't give away service and agree to these ridicules demands.

    We do have the power to make changes in the industry.

  • Barbara, do you enventually get reimbursed for out of pocket expenses, such as utilities, landscape maint., keys etc.?

    I have been doing BPO's and home retention consulting for a couple of years hoping to stumble on to some REO listings on the 25-30 sites where I have applied.  Maybe I should  not hope to hard??

    So you are saying on say a $50K REO, you may net only $500-$1000?  That's like doing say 12-25 BPO's and induring much less stress?

  • Well John it is that type of thinking that has the REAL REO agents now working for nothing or at least very little compensation on each property. There is a lot more to an REO than a normal seller listing. REO agents have the same problems with the seller's over valuing the properties at listing time as the conventional listing agents have with sellers. On top of this there are written Status reports due every 2 to 4 weeks (not just a Friendly phone call on showings and progress) These reports include current market data statistics and suggestions on marketing. Then every 30 to 90 days a full BPO more complicated than an appraisal is due. In between are occupancy or property checks weekly, paying for all of the utilities to be on and kept on, all paid for out of the agent’s pocket. Arranging bids for properties with repair issues, lawn maintenance, snow removal, Over seeing all of the same and often paying for them from the agent’s own pocket. There is also advertising as well. There are evictions and Cash for Keys (some lenders require the CFKs amount to be paid by the agent for reimbursement later. (Which can take many months) All of the work done is expected and not paid for in anyway other than the listing commission. Listing commissions are now as low as 1% to the listing agents.




    As far as being fed listings, The REO industry requires a yearly update on E&O (often carried by the agent not the Brokerage) of 1 to 2 million dollars per incident. There is a grading system for REO agents. Everything is timed. BPOs, work orders, status reports, contract submissions everything. If you miss the often 24-hour requirement your grade suffers. If your BPO and the final selling price is more that 10% difference, your grade suffers. If you do not respond in a timely manner (normally with in 24 hours) on each asset, your grade suffers. If your grade falls below the acceptable grading system, you do not get more assignments. It is very easy to have "faulty" grading so you have to watch it at least monthly but preferably weekly and be ready to defend your real score with e mails, letters and phone calls to several people. Often the grade is counted by time on the market, selling to listing price and a lot of other time sensitive tasks.

    I have done evictions, which required me to be with the Sheriff for the lock out (lock smith paid for by me) arrange the mover, the storage unit (also paid for by me for 2 to 3 months of storage), the trash out and clean up (all paid by me) and then all the other things to required to list. I did this with a property recently. The property was on the market for 120 days listed 50 K more than it was worth (all in the area were selling at least 50 K less some even less). After all of the work I was assigned and completed the asset manger moved the listing to another agent. She dropped the price from 184K to 129K and I was not paid a nickel for all I did in that 6-month period. It also took 6 months for any of the reimbursements for everything I paid out of my pocket. Why is the occurring? Because agents and asset managers and banks that think like you do, and feel I am lucky to have the REO business. Also because a lot of agents wanted in the REO field so badly that they agreed to do all of the above mentioned just to get in. They ruined it for all REO agents. On top of that these same agents do not do the work required. They simply do not do anything or very little and miss report and wait for a commission check to fall in their laps. They under value for quick painless sales and even lie as to the property condition. That is what all of our discussion in this Blog is concerning. The over grown lawns and neglected assets being seen for FNAM and other properties by agents who believed REO were simply easy, no effort listings. For these agents 1 percent is too much to be paid.

    Sorry John it is just not what you think. I happen to do both Seller and REO listings. Banks have no loyalty to their agents and could care less if you loose money. They are a numbers entity. They expect more for less than any seller. While a seller will sign for the Listing Agent to receive a 3 to 3.5 percent commission with no out of pocket expense other than advertising, The banks expect you to be theirs 24 -7 for 1 to 2 % while they pay a selling agent 3 to 4 %. Banks expect you to pay out of pocket and to finance them interest fee on top of that. They also charge referral fees and can change the listing agreement at their will anytime and you can do nothing about it. Seller signs the listing agreement and the Listing agreement stands. This is not the case with REO listings.

    Now on top of all of this, the Escrow agent, foreclosing attorneys and others are almost always located in another state. It is a very normal occurrence for closings to be delayed due to a file sitting on someone's desk that does not care if it closes on time or if at all, as contracted. I have had to go to the local Courthouse and pay for Sheriff deed filing for an Escrow agent who gave a 6 to 8 week time estimate for something that took 1 hour for me to do just because they were "too busy" to mail a check. So there is a whole other set of problems and issues to deal with those seller sales never even see let alone require the agent to deal with. No John, maybe you should stick to the 3 to 3.5 % commissions, a few open houses and some advertising for the conventional seller. I think you may just hate yourself for even thinking about an REO listing if you really knew what was expected and how little you will make and sometimes how much you will loose in this field.

  • First why does REO have to be so hard?  It seems simple enough...LIST PROPERTY, MARKET PROPERTY,( If only agents actually did this!) OBTAIN OFFERS FOR PROPERTY AND FINALLY CLOSE ESCROW.  This is what happens with the listing process anyway. There is nothing hocus pocus about it. It is just an easy way to get listings, without door knocking, post carding,etc.  and you have ONE SELLER to market to that feeds you his inventory.I wish I was allowed to run circles around a few REO agents!  Oh yes...keep good records and have a line of credit available!
  • Barbara, I agree 100% of your last comment!! There needs to be more of a level playing field with experienced agents that can and will do there job correctly. It's a wonder why Fannie, Freddie, and HUD have lost billions of dollars over the last few years. Take care of your listings or get out!! Banks do put to much responsibity on the shoulders of agents,in my opinion, when it comes to expenses. That's it for now!! I'm not even going to touch the other agents comments on superior agents!! They are superior in not doing there jobs and lying to there clients!!

  • Marqueze,

    While I do agree with your last statement about the bigger picture, I do not think that can be accomplished by allowing FNMA, HUD of FREDDIE REO properties to deteriorate due to lack of care or concern by overwhelmed listing agents. In fact, this current situation has the opposite affect. Driving down prices and neighborhoods, increasing crime and vandalism in vacant homes, and causing greater loss in value for the very lenders who required the bail out. No, 50 listing per agent, some 2.5 hours from the listing agent’s office is not an" Elite business". It is a very big dereliction of duty in my opinion. I have been one of those "Elite" REO agents for over 15 years. Long ago when the REO business was considered a "dirty business" by most Brokerages and Realtors I was accepting assignments and doing the "dirty work". The reason it takes so much capitol to run and REO business is because the uneducated agents wanting to" jump into REOs" did not follow what were then, the industry standards for REOs. They took listings for less commission and more responsibility just to "break into" the REO business. Agents used to be paid for CFK, YES, no less than 1500.00 for facilitating the service was paid directly to the agent. Then agents offered to do it for free just to be assigned the listing. Now we all get nothing for assisting in CFKs. Agents were never expected to be responsible for utilities, the bills went directly to the REO billing Depts from the utility companies. No Agent was expected to pay for even a re key out of their own pocket. Now agents have to front massive repair bills for Banks who can much better afford it than the listing agents. There are plenty of REOs to go around. The main thing is, experience in this field should be mandatory. No "REO certification" or "Foreclosure class" can educate anyone on how to correctly do REO properties. This takes at least 2 years of slow and steady experience in all of the requirements to successfully sell at the top of the value and preserve the property while doing so. FNMA and all the others required experience as part of the requirements for becoming and REO agent. There was and is a good reason for that. Yet I know that the current agents for these major REO sellers, had no REO experience when they first became REO listing agents. Reality is some were brand new licensees with not experience at all. This is breaking the very rules put in place to prevent what we are all discussing right here right now. There is a lot to doing the REO job right and taking listings more then 30 minutes from your office is not one of them. Neither is accepting 50 listings in one month while already failing at servicing 30 you have had on the market for 30 plus days.. This is not only a breech of your fiduciary to the seller it is a disservice to the people who live in the areas of these run down, neglected, homes with over grown lawns and flooded basements with no utilities on and no lock boxes. So yes let’s look at the bigger picture, this current system will in no way help to "restore our housing market" or "help our clients". It is also not considered "working together". Let’s do the right thing here and demand our fellow Realtors do so as well. Do it right or don’t do it. It is not about how much you can make while doing less. It is not about "riding a wave." It is about our housing market and what is best for everyone. all the neighbors, neighborhoods, buyers other agents and yes, our struggling economy.

  • So I wasn't going to say anything but after reading I just have to. I feel your pain about all of what you are going through, but as a Fannie Mae listing agent a lot of times complaints come from agents who want to take our place. This happens far to much...Then the agent gets the opportunity and guess what? They can't keep up! This REO business is only for the elite. It takes a lot of money to operate an REO business. Along with finances it takes sanity. Agents are a lot of times far to rude. We endure a lot listing and selling distress homes. There is a lot expected from us when the agent on the other side only has 5 homes for sale vs. 50+homes. Take that in consideration before blasting the broker. I respect everyone's opinion but definitely keep in mind that we should all be on the same side. The side of working together and pleasing our clients; Playing our part in restoring the housing market in America....That's the bigger picture.
  • Dear Suzanne, this quest is not directed at any certain agents. . .rather the management companies who control the asset listings.  I am sure you are an excellent agent, and quite frankly, I am an REO agent too.  But, for instance, HUD listings just turned over to BLB Resources in our area.  We have 5 agents with over 700 listings since October 1, 2010.  One agent alone now has 205 listings.  There must be some reasoning to "market" the properties, or we just become data entry people, and put up the sign.  Sales are nearing 60% repos, and the market value of property is sliding.     PS: not sure who Maxine is. . .  

  • Thank you for responding to me. No the Broker is not farming them out. The listing agents are getting their assignments directly form the asset manager. I was able to speak to her directly about a full price cash offer clos in 10 days I sent him on a property. At the time he told me he was so busy he could not keep up. He did not present my offer for 3 weeks, then he took the property off the market. He then re listied it and lowered the list price by 12000.00 less than my buyers cash offer. He then sold it to his own client with in an hour of the relist. Yes we know it DOES happen. This is what is happening in the REO industry.  I spoke to his asset manager with FNMA and she told me he assured her all of his listings were within 30 miles. (while knowing full well this was not the truth.) This Agent has gotten as many as 9 new assignments in one day and in one week received over 35 listings. Some are 2.50 hours from his office. FNMA is well aware of this and does nothing.

  • Barbara,

    I'd take a guess that the Broker is registered and farming out the listings to the agents.  From what I understand this is not allowed but happens all the time in  my area. I agree with FNMA not governing thier own rulings about distnace.  I have never gotten more than 5 assets at any given time to market. The agent I complained about is still getting a huge amount of assets to market despite a few written complaints and not just from me. A fwe other REO agents in my area also turned him in and he is still working 50 miles away from his office. Luckily FNMA is not my only source.  I'd be sunk if so and pretty broke waiting on reimbursements.

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