Read this story an more on the industry at www.preservationmonthly.comTAVMA Publishes Standards of Good Practice in Appraisal ManagementThe Title/Appraisal Vendor Management Association (TAVMA) announced today that its membership has developed "Standards of Good Practices in Appraisal Management," a set of guidelines for the industry. The Standards outline best practices to help ensure that appraisal management companies (AMCs) and appraisers deliver quality, objective valuations to their common customers – financial intuitions.The Standards take into consideration the needs of all stakeholders as well as federal interagency guidance, the new Home Valuation Code of Conduct (HVCC) and other federal and state statutes. The Standards attempt to codify long-time industry practices on a variety of issues, including local market knowledge and competency, distance appraisers travel, appraiser selection and communications, and dispute resolution."There has been a great deal of distortion in the press and on the Internet about the role of AMCs, the qualifications of the appraisers they work with, appraiser travel policies and the value that AMCs bring to the lending process," said Jeff Schurman, Executive Director of TAVMA. "Many of these stories are based on anecdotal complaints by third parties who don't regularly work with AMCs. In fact, AMCs are currently involved in over 60 percent of all residential transactions; over two-thirds of all licensed and certified residential appraisers work with AMCs; and preliminary results of a member survey suggest that the average AMC appraiser has 13-16 years experience.""The Standards were drawn from the best practices of reputable AMCs and reinforce the benefits AMCs bring to the market: appraiser independence; quality control and transparency that increase lender and consumer confidence; and efficiency and logistics that support national lending," Schurman explained. "Our new standards provide a roadmap that reputable AMCs can follow to deliver quality appraisals and to attract highly qualified appraisers. As the real estate and mortgage industries emerge from its current downturn it is vital that AMCs continue to focus on processes, systems and controls to ensure that they continue to deliver high quality, objective valuations."Developed over the past year with input from TAVMA members, lending institutions and appraisers, the standards address nine key areas including:· Supplier Recruitment and Coordination· Appraisal Order Assignment· Order Tracking and Workflow Management· Pre- and Post-Delivery Quality Control· Appraisal Delivery· Customer Service, Dispute Resolution, Client Pressure· Product and Technology Development and Utilization· Sales, Marketing and Administration· Training and DevelopmentOther highlights of the standards focus on issues such as recruitment and qualifying appraisers; negotiating and setting service levels; quality reviews of completed appraisals reports and, expectations and developing a technology that permits auto assigning, tracking, reviewing and electronic delivery of reports.Schurman said, "Like any industry, AMCs must continually update their standards to be responsive to the needs of customers and suppliers. These standards allow the industry to put some parameters around what it means to be a professional, objective, and successful AMC."
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READ this story and many more on the industry at www.preservationmonthly.com1,750 Bank Owned Properties Represent increase in NYC REO InventoryA study by the Furman Center for Real Estate & Urban Policy found a rise in bank-owned inventory over the last three years, 290 properties in December 2006 to 1,750 in September 2009.“If we can identify what kinds of properties are likely to end up as [bank-owned], where they are located, and what their effects are on the surrounding neighborhoods, foreclosure response efforts can be better targeted at the neighborhoods that need them most,” said Vicki Been, faculty director of the Furman Center.15 Years of Data Reveals That Most NYC Properties That Enter Foreclosure Never Complete the Foreclosure Process Because the Homeowner Either Sells or Becomes Current on Their Loan. Of Those That Do Complete the Foreclosure Process and End.Yet little is known about what happens to these properties after they receive a filing. How many homeowners manage to stay in the same home? How many sell? How many properties complete the foreclosure process and go to auction? How many end up bank-owned (termed Real Estate Owned or “REO” by lenders)?The number of REOs in the city remains small when compared to harder-hit areas of the country, but the report finds bank-owned properties are highly concentrated in the eastern Queens, central Brooklyn and north shore of Staten Island neighborhoods that have been hurt most by the mortgage crisis.The highest number by far is in Queens, which is home to 1,072 REOs. Brooklyn has 245 and Staten Island has 226. Nearly 20% of all 2007 foreclosure filings in Queens wound up as REOs, the highest rate in the city.“Understanding the life cycle of foreclosed properties in the city is crucial to developing effective public policies to stabilize neighborhoods and families, and this analysis is an important first step” said Vicki Been, faculty director of the Furman Center.Among the approximately 12,000 one-to-four family homes that were hit with foreclosure notices in 2007, 54% were never sold and had not completed the process by September 2009. Almost 14% had not been sold, but had received another foreclosure filing. Some 14% were sold and another 4% transferred through divorce or estate sales. Another 12% went to auction, but were not sold, ending up as REOs.The report also reveals a long history of “flipping” REO properties, whereby homes bought out of REO are resold within a year. Between 1995 and 2007, 44% of properties that sold out of REO were resold within one year. Flipping activity peaked in 1998, when 55% of REO sales resold within a year. This decreased to 37% in 2006, and 32% by 2007. Between 1995 and 2007, properties flipped within a year resold at an average price increase of 45% more than their purchase price less than a year before.“These figures on rapid re-sales are significant, but without more information on what kind of renovations are taking place in these properties, it’s hard to know what to take away here.” commented Ingrid Gould Ellen, co-faculty director of the Furman Center. “On the one hand, if irresponsible investors are doing minimal renovations to distressed properties before reselling them, this will likely create problems for future owners and neighbors. On the other hand, if investors are acquiring otherwise undesirable properties, rehabilitating them and returning them to stable occupancy, then this may have a positive effect on the neighborhood.”See REPORT in Full go to http://www.preservationmonthly.com/story_2010_31.htmRead more…
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.
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I completely understand you wanting to “get a little extra,” especially now that some of these AMC’s are taking such a big cut, but when it comes at the expense of my time and energy it really pisses me off.I am working with a company right now (which will remain nameless) that has completely revamped their property preservation guidelines.Here is a small example of what I’m talking about. This is direct from the preservation team:*ALL BIDS MUST BE SUBMITTED IN THE FOLLOWING FORMAT OR THEY WILL BE REJECTED IMMEDIATELY:*NO HANDWRITTEN BIDS WILL BE ACCEPTED.*ALL BIDS MUST BE TYPED ON THE CONTRACTOR’S OFFICIAL LETTERHEAD WITH THE CONTRACTOR’S CONTACT INFORMATION (NAME, ADDRESS, CITY, STATE, AND PHONE NUMBER), LICENSE NUMBER AND SIGNATURE.Seems simple enough, right? Keep reading…….**Vendors must send me proof of Workman's Comp or Liability Insurance and their Business License & ALL bids must be signed by Vendor****There can be no conflict of interest with vendors supplying bids for the listing broker/agent. Vendors who are owned by, or related in any way to broker/agent or cannot be used****PLEASE NOTE: All bids must be itemized by job description and price.Copy of workman’s comp? Copy of a business license? Must be signed? I don’t know about you guys but this is new to me........or was new. But honestly can you blame them? There is so much fraud, strong arming, agent kickbacking and good ‘ol boy crap going on out there that these banks had to do something!So now I have to find contractors that are willing to send in all their personal information, go do a free bid and send it in perfectly every time……and after all that, still only have a 1 in 3 shot of getting the work! All because a select few agents out there wanted to make a few extra bucks.Yes I’m complaining! Isn’t that what blogging is for???? But it’s a damn good complaint when what once took me a few hours is now taking me a day or two. And that costs me money!!!
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In a transcript released by the FDIC of Sheila Bairs testimony before congress, she cites two main legislative causes for the banking crisis, and a third ancillary cause arising due to the other two causes, the Shadow Banking System.The two legislative causes are FIRREA and FDICIA. Ms. Bair:"The last major financial crisis—the thrift and banking crisis of the 1980s—resulted in enactment of two laws designed to improve the financial regulatory system: The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) and the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA). Combined, FIRREA and FDICIA significantly strengthened bank regulation, and provided banks strong incentives to operate at higher capital levels with less risk, but these regulations have also created incentives for financial services to grow outside of the regulated sector."She continues by naming this growth outside of the traditional regulated banking sector as the 'Shadow Banking System.' I am sure we have all heard that term before, but what is it really? Ms. Bair continues:"In the 20 years following FIRREA and FDICIA, the shadow banking system grew much more quickly than the traditional banking system, and at the onset of the crisis, it's been estimated that half of all financial services were conducted in institutions that were not subject to prudential regulation and supervision. Products and practices that originated within the shadow banking system have proven particularly troublesome in this crisis. In particular, the crisis has shown that many of the institutions in this sector grew to be too large and complex to resolve under existing bankruptcy law and currently they cannot be wound down under the FDIC's receivership authorities."Well, she doesn't really say! But it sounds really bad. Its like, if 20 years ago, the shadow banking system was the size of this Twinkie, then today, it would be a Twinkie 35 feet long weighing approximately 600 pounds. Thats a big Twinkie!See all of Ms. Bairs remarks here: http://www.fdic.gov/news/news/speeches/chairman/spjan1410.htmlOpen call to legislators: dismantle the Shadow Banking System!Chris ButterfieldRE/MAX Preferredwww.SLREO.com801-440-8800
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Posted by Vaughn Parry on January 14, 2010 at 5:00am
Okay kid’s here’s the skinny. 2010 What will it bring? If you are looking to make a move in Real Estate in the Portland Metro Market you are probably in what I would consider your perfect window. Price’s are going to continue to creep down as Seller’s compete against REO and Short Sales for Buyer’s.Interest Rates today are amazing. Under 5%, with good credit! Rates are probably as low as they are going to get because it wouldn’t be profitable to the lender’s to go any cheaper. Looking around I see the price of gas going up and we should be at $3 a gallon shortly. To me, that says inflation. Inflation says to the FED that they need to raise the Prime Rate in order to control it. It’s not their only tool but at some point lending at 1/4 % will end. Now, this is something that they do not want to do, but at some point in 2010 they will have to. Once this occurs and your rates go up, the buying power that is available today will decrease. There’s really only one reaction that can occur; prices will get pushed down again.I know that no one wants to hear that housing values are going to continue to fall, but unless people get pay raises in conjunction with the upcoming interest rate increases, the Buyer’s buying power will decrease. For example; if you can afford a $1,500 mortgage PITI, and the rates go up, you can’t afford more you just have to buy a cheaper house. For example at 5% interest $10,000 borrowed will cost you approximately 5.02. If interest rates are at 6% and now that $10,000 cost you $6.27. You still make what you make so your buying power is weakened. If you’re a Seller and the Buyer’s have been pushed out of your price range what are you going to do? Lower the price down to where the Buyer’s can again afford your home. So, I think that prices will continue to get pushed down some more. I just don’t see a different solution, but nothing would please me more than to be wrong.I’ve said a mouthful let's get some feedback and help us all have a better 2010. How hard could that be? ;0P
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All REO Brokers, for that matter all Real Estate Professionals should watch the panel questions to learn about the financial crisis. It is available for viewing at www.c-span.org In the on-going blame game that has been in effect since the beginning of the crisis, this is the most fair and balanced of each parties viewpoint, without media bias one would find on politically motivated networks. Most people have an opinion on the root cause of the meltdown. Some think it rests on a residential real estate housing bubble. I have never been in agreement with that viewpoint. Real Estate is unlike a dot com, it cannot truly be a complete bubble. By definition when a bubble bursts, nothing is left, in real estate, the underlying asset remains, although at a reduced value, it still retains some value.Others believe that the cause is Wall Street greed. Many others believe it was the push for increased homeownership rates.These thoughts are over-simplication, although there is plenty of blame to go around, it is a combination of many factors that created the perfect storm. The purpose of learning where the system went wrong is to prevent repeating the behaviors that brought us here.It's my opinion that there was a whole circle of responsibilty. An environment of appreciating real estate values, and low interest rates had Main St wanting to invest in stocks & real estate rather than put their cash in safe low return savings accounts, or T bills & the like. Wall St under pressure to out perform year over year, as the bar is set higher and compensation tied to investment returns to the firm looked for new investment vehicles to sell. Mortgage loan brokers. some of which didn't even need a license depending on which state they did business in were looking for new loans. Institutional investors looked to maximize returns on their portfolios and pension funds. Enter new products; mortgage backed securities and credit default swaps. CDS were basically a bet that a package of loans would fail, sort of like shorting a stock. In order to sell these new products they needed to be rated, so Credit Rating Agencies such as Moody's & Standard & Poors evaluated these new products. They developed sophisticated models based on extrapolating real estate appreciation. Real estate purchasers counted on rising values and incomes to sustain their mortgages. Relaxed qualifying opened the market to more borrowers, it was now possible to purchase with no money down, lower credit scores and low documentation of income.There were some mortgage fraud where borrowers or originators lied on applications. Some borrowers decided to cash in on their equity to purchase home improvements, vacations, toys or anything else they wanted now. Homeownership rates went up and helped to fuel the economy, So the circle went- until it broke down.Here's why I think it broke-1. Real Estate values are not constant, they fluctuate up and down.2. New sub-prime loans were more profitable than conforming loans, so too many were written.3. MBS & Credit Default Swaps needed an increased amount of loans to package, Wall St wanted more.4. Mortgage applications were taken by inexperienced unlicensed people, including some real estate agents.5. The riskier the loan, the higher the profit to the mortgage broker, and demand for the loans increased.6. Mortgage Companies solicited home owners to refinance, and spend their equity now, rather than build it up.7. Credit Rating Agencies formulas of taking B & C paper, repackaging and rating AAA, (which I liken to taking B & C student and puting them on the Honor Roll) led to global institutional investors purchasing the MBS & CDO's, thinking they were safe.8. Government watch dogs that started to raise red flags were squashed.9. Banking regulations did not apply to Investment Companies.10. The Fed kept long term interest rates low.11. The new finacial products were complex, and some buyers did not understand them, and relied on their ratings.12. No transparency in capital reserves and product mix at major lenders.13. Consumers take loans which they don't understand have pre-payment penalties, balloon payments, negative amortization etc. This one gets alot of bad press, as in "they should have know better" but I know that I have signed documents to purchase a car without reading it, and have many times checked the box on a website that states I have read & understand the terms & conditions without reading them.- and I deal with legally binding contracts everyday.14. Economic conditions weaken, Real Estate values decline,Foreclosure rates increase placing downward pressure on values, Market liquidity tightens, Panic starts. I am not sure which fueled which, but the combination led us here.
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Posted by Dawn Barrier on January 13, 2010 at 6:57am
Those of that know this company have all been waiting for this news and now it official!Titanium Launches New REO company Excellen REOFor another company to launch into the REO market indicates to me that the "shadow inventory" we have all been hearing about, is real and it is just a matter of time as to when it will hit the market and if it will be in drips or not. How and when this release of inventory comes to market is a heated topic I'm sure.I know here in Las Vegas we could use a some more under $300,000 homes to come on the market as I am working with several buyers now and the competition to win a bid can be difficult for some right now.Titanium Solutions- Titanium Holdings Enters the REO market with its Launch of Excellen REOIt is all over the news here is one place at the DSNEWS to read about itIt is on Housingwire.com too and/or just Google Excellen REO.Titanium Holdings, Inc., the parent company of loss mitigation specialist Titanium Solutions, Inc., is jumping into the property disposition arena with the official launch of a new business unit, Excellen REO.Excellen REO is headquartered in Fort Mills, South Carolina, along with its sister company Titanium Solutions and parent Titanium Holdings.Cary Sternberg is the president of Excellen REO a few of his former titles were, he was formerly with American Home Loan Servicing, VP of Loan services for Indy Mac and REO manager for Ocwen.
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Loss Mitigation Solutions Provider Expands Presence in to REO SpaceTitanium Holdings, Inc., the parent company of Titanium Solutions, Inc., a provider of loss mitigation solutions, recently announced the launch of a new business unit, Excellen REO. Excellen REO is a full service REO asset management company that offers a complete suite of services designed to create a customized property liquidation process for each client.“As the mortgage industry faces various challenges during this economic downturn, the success we have experienced with Titanium Solutions for more than a decade has uniquely positioned us to understand and respond to the changing needs of our clients,” Patrick Carey, CEO of Titanium Holdings, explained. “We have made a number of strategic decisions during the past year and the launch of Excellen REO is the latest result of that effort. Excellen REO will help us expand the client relationships that we have built over the years and establish new partnerships as we offer a comprehensive solution to all of their property liquidation needs.”Cary Sternberg, president of the new company, leads Excellen REO. With almost 40 years of experience in asset preservation, management and liquidation, Sternberg is the former senior vice president of the REO department for American Home Loan Servicing, Inc. In this position Sternberg managed more than 200 employees and 33,000 assets. His previous titles also include first vice president of home loan servicing and REO of Indymac Bank FSB, national REO manager of Ocwen Federal Bank FSB, president of Virginia Commonwealth Realty and senior vice president of American Family Homes.“We have assembled a staff that leverages decades of experience in REO management and key business partners across the country,” Sternberg said. “Titanium Holdings has created a formidable reputation in the industry and I look forward to garnering that same level of trust for Excellen REO.”Excellen REO services include pre-marketing, valuations, marketing and sales negotiation, closing and funding and alternative sales methods. The company will leverage a nationwide network of real estate brokers and local eviction attorneys, as well as property preservation companies.
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I have written an extensive proposal on "how to end the foreclosure crisis". I have presented it to several political leaders, but none seem to take me serious because I am not represented by a powerful lobby or industry group. I honestly believe the proposal is a win for the banks, win for the government and certainly a win for homeowers. The thought has occurred to me that REOPRO may be the industry muscle I need to get some attention. The idea behind the proposal is that it does NOT have cost implications rather mostly procedural, but the long term results are outstanding for all parties involved. Sounds too good to be true, maybe but once you see it, I think you will agree with me. The proposal has national implications and would be something that could involve REOPRO members in their own areas across the country. I am an old school guy who never blogged, so can anyone help me to get this idea off the ground?
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Well last week I received a very interesting assignment from Titanium, I was asked to offer the home owner a "VOLUNTARY" Short Sale and cash for keys. In the past I have received assignments where I have to deliver the home owner bad news that their modification was not approved and encourage them to do a short sale, but never cash for keys. Also the other type of assignment that I have received in the past is the deed in lieu with the lease contract, and the lease contract or cash for keys for tenants.It is interesting to be in the middle of this evolution in the default mortgage industry. I was reading today that most lenders are embracing short sales, according to NAR 10% of all transactinos last year were short sales, and the number might increase this year. Also the number of home owners in default status keep on raising, and since most of the lenders are trying to stay away from the toxic inventory, we might see an increase on short sales, some of the new laws and regulations are pushing the lenders to approve the short sales quicker, the only problem is that the buyer's lender has to charge less or find a way to roll in the closing cost, or the buyer will need to cover the closing cost, the way it should be. Since most lender only allow a max of 3% for seller's contribution, and most seller's don't have money to offer any type of contribution.I just wonder how many new combinations of REO/ShortSale/Rent Options type of assignments will come up in the future. It seems that at this point mostly is trial and error, and because some of these assignments are like a mix of the "traditional" REO and loss mitigation and new ingredients throw in the mix, I like to call them HYBRID assignments, because technically they are one thing, but the procedures are similar to something else.About my assignment the home owner is an investors that has moved out of the state, and the house is a vacant boarded up shell, so I didn't get to list that property.Please share some of your experience with this type of hybrid assignments and what work and didn't in your situation.
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Posted by Chris Treece on January 12, 2010 at 2:21pm
Please Join The Chris Treece Show on January 13, 2010 at 11 am CST as my guest will be “The Social Media Scientist” Dan Zarrella. He will be discussing his new book, “The Social Media Marketing Book”. Call in number is 347-633-9495. www.blogtalkradio.com/Chris-TreeceDan Zarrella is an award winning social, search, and viral marketing scientist and author of the upcoming O’Reilly media book “The Social Media Marketing Book”. He has a background in web development and combines his programming capabilities with a passion for social marketing to create applications like the social URL shortener Votrs.com, Link Attraction Factors keyword tools, as well as TweetPsych, TwitterBrandSponsors, TweetBacks and TweetSuite.His Link Attraction Factors report helped readers determine which topics, days, times, and keywords attract links in social media stories for semantic content optimization, while his Viral Content report details the motivations, preferences and habits involved in online content sharing.Dan has written extensively about the science of viral marketing, memetics and social communications on his own blog and for a variety of popular industry blogs, including Mashable, CopyBlogger, ReadWriteWeb, Plagiarism Today, ProBlogger, Social Desire, CenterNetworks, Nowsourcing, and SEOScoop.He has been featured in The Twitter Book, Fast Company, The Financial Times, NYPost, The Boston Globe, Forbes, Wired, The Wall Street Journal, Mashable and TechCrunch. He was recently awarded Shorty and Semmy awards for social media & viral marketing.He has spoken at PubCon, Search Engine Strategies, Iowatasmic, Convergence ’09, 140 The Twitter Conference, The Cool Twitter Conference, WordCamp Mid Atlantic, Social Media Camp, Inbound Marketing Bootcamp, and The Texas Domains and Developers Conference, and he currently works as an inbound marketing manager at HubSpot.
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Posted by Steve Adkins on January 12, 2010 at 12:00pm
That troublesome contract!I want to spend a minutes to talk about that “troublesome contract” that you know is going to be problems from the very beginning. You just get that feeling from the very beginning. Everyone in this business gets one every so often, right? Or am I just lucky with more than my fair share?It all started the day before Christmas Eve. I get a call about 3 PM from an agent wanting to show the house to a potential buyer, he’s in the driveway. I tell him about the house and that he is welcome to show the house any time….so he asks me how does he get in? What? I tell him it’s on a Supra lock box, which he could use his Supra key to get in. Then he tells me he didn’t have his key with him. How can you show houses to a buyer without your Supra Key?This agent was expecting me to drop what I was doing and drive 15 miles to open the house because he was not prepared. More on this shortly. Mind you I was elbow deep in auto repairs with the dash of my truck disassembled as I replace the heater core. Needless to say it would take me 2 hours at best to get there. I told him I was leaving town for Christmas the next day and would be back late Sunday, he could call me Monday to set an appointment….which he did. Surprisingly!He calls me Monday morning and we set a time for the afternoon, 2 pm. Good, I rearrange my schedule for the day, no problems. I ask him if he was a real estate agent and if he had a Supra key, he said he was and that his key is broken. Yea OK and that bad feeling starts to grow. At 12:30 he calls me again to ask if he can more up the time, that he was already on the way with his buyer. No problems, it’s a light day and I stop what I was doing and leave the office to meet them.I start thinking this is going well when the buyer walks into the house and starts gasping for breath! She just keeps saying “I love it, I love it”. Good signs from the buyer! I start smiling as I know this trip worked out, the first one like this to ever go my way. The buyer loves the house and they both said that they were going back to his office to write the offer and send it to me that afternoon. As I’m driving back to the office I’m wondering if this was a dream? These “give-me’s” never happen to me! But I’ll take it if it really comes thru.Well, late afternoon the next day I hear from the agent again. He has a few questions so he can fill out the contracts, no problems as I have gotten use to that. Just before leaving the office around 4:30 pm I get the contract. Cool! Full price, no closing cost, 10-day closing….I’m thinking cash deal! Sweet! The asset manager is going to love this as it’s our last REO property in this subdivision. This is a new construction REO and we started with 11 houses in the late spring. This one had some minor issues and no Certificate of Occupancy issued, of course the bank was not going to finish that one small issue. So it has taken longer to sell then the others, and the bank understands why.Ok, back to the contract. I keep reading and there are some minor special stipulations that will need to be removed, no problems. Then there’s a check mark in the contract about an FHA Exhibit (but no exhibit) and then the last page is an un-dated letter of ptr-approval from a lender/broker I have never heard of. I start thinking that a 10 day closing and FHA do not play well together! Again, no problems, I’ll call the agent and get this straightened out before sending the package to the asset manager. I called to ask him is this a cash deal or FHA. If it’s FHA he needed a lot longer for a closing date. He says that 30 days will be fine and that it was FHA and that he left the closing cost blank because he wants the seller to pay ALL closing cost. Then he tells me that this is a Neighborhood Stabilization Program loan. Ok, the last one I did took almost 60 days to close, so I told him that the bank will only agree one closing extension. If he under estimates how long it will close because he has not talked to the lender, the bank can and will find the buyer in default and keep all earnest money. So we agree on a 45 day closing.An hour later he calls back to say that he wants to raise the offer price in hopes the bank will pay more closing cost. We go round and round about this for a few minutes and I tell him to call the loan officer and work out the details and send me a new (and complete) offer. He agrees and sends me a new offer the next day. It’s still not complete, but I can work with it. So I start trying to contact the loan officer to verify the pre-approval letter.After 3 days and 5 voice messages later of trying to reach the loan officer, the agent happens to call me. I tell him that everything is on hold until I talk to the loan officer. I finally reach her the next day (after 3 more attempts). She’s familiar with the buyer but says that the letter was issued more than 2 months ago and she would have to re-verify everything again with the buyer. She did call me back on New Year’s eve to say that she was waiting on the agent to bring her some documents, he was already a day late in doing so.I have not heard from the L/O or the agent yet this week, needless to say I have ZERO faith this deal will ever get to the closing table. I don’t want to say that the agent is unprofessional, but he is under trained and has no supervision.So what’s your “troublesome contract” story? I would like to know I’m not the only one who gets these!Steve Adkins - RealtorThe Adkins GroupBetter Homes and Gardens Real Estate Metro Brokerswww.The-Adkins-Group.comRead more…
The article below, by Carrie Bay, DS News tells us, if we read between the lines, that there are HUGE opportunities available. Not only in REO listings, but also with modifications and short sales. Don't miss out.One in every 7.5 homeowners with a mortgage in the United States is either behind on their payments or in foreclosure, according to new data released by Lender Processing Services (LPS) Monday. That equates to a record high 13.2 percent of the nation’s home loans.LPS’ December Mortgage Monitor report, which analyzes 40 million residential mortgages across the spectrum of credit products, paints a dismal picture of loan performance. Total delinquencies, excluding foreclosures, increased to a record high 9.97 percent as of November 30, 2009. That represents a month-over-month increase of 5.46 percent and a year-over-year increase of 21.29 percent.Loans rolling to a more delinquent status totaled 5.01 percent, compared to just 1.52 percent of loans that improved. Of loans that were current in December 2008, 4.37 percent were either 60 or more days delinquent or in foreclosure by the end of November 2009, a rate higher than any other year for the same period, LPS said.Foreclosure inventories also continued to climb to new highs, with November’s foreclosure rate at 3.19 percent – a month-over-month increase of 1.46 percent and a year-over-year increase of a staggering 81.41 percent.Compared to 2005 levels, LPS says foreclosure inventories across all loans are now nearly seven times higher. High-end jumbo loan foreclosure inventories are nearly 100 times more than levels four years ago.LPS reported that foreclosure starts continue to decline as a result of loss mitigation efforts like the federal government’s Home Affordable Modification Program (HAMP), but as more and more homeowners extend their time at the brink awaiting evaluations or running the course of the trial phase, servicers’ delinquent loan volumes have become elevated.The company says the reduction in foreclosure starts is not necessarily a positive side effect. Combined with the steady increase in the number of seriously delinquent loans, it means there is an ever-growing “shadow” inventory of troubled properties that will eventually hit the market, LPS explained.Topping LPS’ list of states with the most non-current loans is Florida. Also finding their way to the top 10 are Nevada, Mississippi, Arizona, Georgia, California, Michigan, Indiana, Ohio, and Illinois.States with a coveted spot on the list of those with the fewest non-current loans include North Dakota, South Dakota, Alaska, Wyoming, Montana, Nebraska, Vermont, Colorado, Oregon, and Iowa.
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Posted by Johnny Huang on January 11, 2010 at 4:20pm
How does one get into the REO business?Yes, Jesse, our REOPro CEO, has addressed this many times and this question is still asked by many newcomers. I'd like to make my input on how I obtained my REO listings....by doing lots of BPO's!I posted several blogs on another site and will post them here for sharing purposes.Title: BPO Stir Crazy blog dated 2/15/08 (yes 2 years ago!!)" 2 days worth of applying to companies for BPO's!! I now have a Big Pounding Oversized headache!What a chore.At the moment I have access to 3 so far, yet no orders are available. I'm waiting on a bunch for approval and I'm keep my fingers crossed to get them.Wish me luck :-)"You see here, applying to companies that assigns BPO's and being on the sites that require to capture BPO's are crucial to get started. REOPro has a list here. Use it to your advantage, it's a free list and to get started you need to apply! I've literally applied to almost all of them. Some you get, some are closed, but it's a start.Title: BPO Learning Curve dated 3/8/08Now I've done a some BPO's (Averaging 2 per week) and here's what I've learned.1. READ the email and get instructions on what the asset company wants. This is important because not all of them want the same thing.2. Have your camera ready. I made the mistake for not checking the batteries on my camera. If you don't have your camera ready, the trip is fruitless.3. Have your lockbox key ready. See above for that mistakes. Extra trips to the subject property is wasted gas money.4. Do your tax record search and MLS Comps in advance. Looking these up should be at the snap of your fingers. I like to print them out to review them, instead of browsing on my screen. It makes comparing and jotting notes easier.5. Have an idea of the price before you go. Sometimes you can "see and feel" the neighborhood with comps, so get a sense of the area before you head out.6. Bring a flashlight, jacket full of pockets, and a notepad or folder to write notes. Keep a tab on your photos and note anything you see that will impact your values.7. Call in to a collegue or friend letting them know you are at the property. For security reasons, of course. You never know what you can expect in a property that's vacant and trashed.8. Plan out an exit strategy. If you don't feel good, possibly get out. Some homes can be scary because it's trashed, vandalized, even burned. If you don't feel safe, don't do it.9. Compile all information before you start inputting in the company's website. This saves alot of time alt-tabbing screens or paper shuffling.10. Be patient for your check. :-) nuff said...This is my learning curve, hope you all enjoy. Please don't comment on how BPO's are a waste of time for the money you get. This is not part of the discussion. Thanks in advance.Took me less than 2 months to capture BPO's, granted most of them were sitting in front of the computer waiting for orders. After doing my best on the BPO's, also doing some online training, as well as taking classes, I finally landed my first listing, 5 months after initially started doing BPO's. Hard work, yes...but very well worth the learning curve.That's how I got my REO listings...blog post here (this will take you to my blogsite on activerain.com)
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Mortgage Fraud - Mortgage Broker sentenced to a five-year termViktor Kobzar, a Federal Way mortgage broker, and six others were arrested in March on allegations of mortgage fraud. On Friday the leader Viktor Kobzar was sentenced to a five-year term in federal prison for his part in the $47 million mortgage fraud scheme.According to court documents, those involved used businesses as fronts to take out exorbitant loans on behalf of "straw buyers." They augmented the good credit of those buyers with falsified income documents to obtain the loans, from which they then siphoned money before attempting to resell the homes.The homes were resold to others within the conspiracy at inflated prices, with the conspirators taking the profits.At least 68 loans were secured through "straw buyers" and otherwise unqualified purchasers, representing at least $46 million in loan proceeds, based on false and fraudulent representationsKobzar obtained a $1.2 million loan for a house cleaner earning less than $20,000 annually to buy a tiny Medina home. On paper, the cleaner purchased the home from another straw buyer who'd bought the home six months earlier for $775,000.Another purchaser, a janitor who earned about $16,600 in 2006, saw his income falsely inflated to $385,000 for that year.While those behind the scheme are alleged to have provided false information to lenders, former U.S. Attorney for Seattle Jeffrey Sullivan said previously that the banks extending the loans -- chiefly Washington Mutual and ING Bank -- could have prevented the fraud by conducting "a little more due diligence."Defendants in the case are forfeiting to the government a 2004 Lamborghini Gallardo, a 2006 BMW 750, a 2007 BMW X5, a 31 foot Bayliner yacht, and several bank and investment accounts totaling approximately $2.4 million.The sentence was handed down in U.S. District Court in Seattle after Kobzar's convictions for conspiring to commit bank fraud, mail fraud, wire fraud and filing a false personal income tax return.At Kobzar's sentencing, U.S. District Judge Marsha Pechman said, "This is a very serious crime and many, many people were harmed."She said Kobzar and his co-defendants "bear a huge responsibility for the financial meltdown that harmed many people."Last month co-defendant Vladislav A. Baydovskiy was sentenced to five years in prison.Four other defendants in the case were sentenced in December 2009:• Camie Byron, 28, of Renton, a loan officer, was sentenced to two years in prison.• Alla Sobol, 28, of Renton, a mortgage broker, was sentenced to two years in prison.• Sobol's husband, David Sobol, 40, of Issaquah, a real estate agent, was also sentenced to two years in prison.• Sandra Thorpe, 55, of Shoreline, an accountant who falsified income statements and employment verification letters, was sentenced to probation and 200 hours of community service
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Posted by Chris Treece on January 11, 2010 at 8:18am
Nowadays, social media marketing is very much akin to a friends with benefits type of situation.Always bear in mind when thinking about and planning social media marketing campaigns and strategy that you have to focus more on making friends than selling your products and promoting your business!Social media is just that, social. In order to utilize social media marketing effectively, it is important for you to understand and realize that fact.Be friendly. Be sociable. Be somebody that other people want to get to know better instead of only trying to be somebody people will buy things from.Actually, one of the basic tenets of salesmanship is that people will buy from those people they like. So, if you are likeable and friendly on social sites, you will certainly be much more likely to make sales to the friends and followers you acquire along the way!One word of caution: If you are not yet active in social media marketing but plan to be in the near future, you had better go ahead and reserve the user name you want to have on the social sites you plan to frequent.All of the major social media communities such as Facebook and Twitter are growing at astounding rates and adding new members daily.So, this might well be a situation of he who hesitates is lost, because if you wait long, someone else will probably grab the user name you want.When using SEO with social media, though, keep in mind that you are writing for real people, not a search engine. Remember that you are addressing friends, not Google.Make your Twitter tweets and Facebook Wall posts, etc. accordingly!If you go at social media marketing expecting to run it solely in a business-like way with lots of sales hype, you’ll be doomed before you even get started.Think of social media marketing more along the lines of friends with benefits that can help you grow your online business!
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Every single day, I am asked, “How do I become a REO Agent?”
What do I mean by “REO Institutionalized?” Do you know how many default properties sold in your home zip code last month? No…..why not? Do you know your home zip codes total number of Single Family Homes that sold and what percentage were distressed properties, from foreclosures to short sales? Of the distressed properties, do you know what bank sold the most assets and how much of a potential loss they took, if any? My point is, even if you aren’t closing 500 REOs a year, it’s still important for you to know these statistics, it’s what a REOPro does.
For example, I know that in my home zip code, last month we had 35 properties closed, 10 or almost a third were distressed. I know that my home zip code as a 98% list to sale ratio and the neighborhoods with the most activity were Hermitage Hill and Hermitage Meadows with three closings each. Now, I am not closing hundreds of REOs a year, I can always grow my business but, I am ready to provide an AM with quality information for my area when and if I bring on a new client. I am REO Institutionalized.
It always has surprised me that as active as our REOPro Blogs are, we can still have days go by with no new blogs. Why is this so shocking you ask? Oh….let me explain once again.
So, you as a mildly successful REO Agent who wants to grow your office but, you can’t seem to get your foot in the door and no one seems to take you seriously. In my last interview on BlogTalkRadio, I had Frank Marshall President of Default Resources on and he said it was all a matter of credibility. He was dead on! No one is going to pick up the phone and call you, no one is going to keep your resume, no one is going to assign you an asset if they don’t know you!
It takes more than a voice mail, email, bag of cookies and a smile to break into or even stay in this business. You have got to make a name for yourself and if your idea of “branding” is putting you picture on your business card…..get out now! Blogging no an active network like REOPro for Default Professionals, is a huge way to get some serious credibility. Yeah, you can blog over on Active Rain, Yahoo, Trulia, Linkedin and whoever else is out there but, these sites are dedicated strictly to default, where as REOPro is….why, because REOPro is REO Institutionalized! To have a REO Blog on REOPro where it can be read, criticized and possibly accepted by your peers gives you an incredible amount of credibility, above and beyond what you can get at other sites. Simply stated, REOPro is made up of an array of Default Professionals so, if you post something there, we will all know quickly if it’s full of B.S.!
Lastly, it takes time….time is crucial because it also substantiates your credibility. Time coupled with activity creates credibility. You may write a successful blog every day but, if you only have been doing it for a week……no one is going to take you as seriously as someone who has been doing it for a year. It all gets back to being “REO Institutionalized”. Other REO Professionals want to work with REO Professionals…not some snotty nosed, “entitled” upstart………yuk! Now, that doesn’t mean that if you’re new, you don’t have a future in this business, it just means you are going to have to work harder…..without complaining!
Ultimately, think of your competition…..think of the people in your market who are closing hundreds of deals a year, are you more knowledgeable than them? No excuses folks……are you more knowledgeable than the top producing REO Agent in your market? If not…..then don’t ever expect to obtain their level of business because, you will be in direct competition with them every step of the way.
By the way, you don’t have to have hundreds of closing to work smarter, more efficient and overall better than anyone else, you can prove that by blogging about your experience and knowledge over time.
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Posted by Nick Miller on January 10, 2010 at 12:03pm
This is the first part of a three part series I will call, "The Good, The Bad, and The Unexplainable."We will start with the Good - Why I Love This Job.As REO Agents we are often the first person to inform an unsuspecting tenant that the home they are living in has been foreclosed on. This can be a difficult, and sometimes heartbreaking task (but that's why we make the big bucks, right?). We do it so often that we can become jaded to the situation. I admit that I am often guilty of viewing a foreclosure as just another assignment, but to the people occupying that home, it is more than an assignment, it is a life changer.I received another one of these assignments about 3 months ago. The home was located in the inner city of Jackson. This is an area that only seasoned REO Agents care to go (the type of place that makes new agents wanting to break into the REO biz question if the reward is greater than the risk.) So I pulled up to this 800 sq. ft., 2 bedroom home (which provided little more comfort than a roof over head) and found it occupied by a tenant named Willie.Willie and his wife had been living in this home for 30 years. They raised their children in this home and as you could imagine, they were devastated when I gave them the news. I mentioned to Willie that he may have options as far as renting back from the mortgage company, but that idea was quickly rejected when he informed me that he did not have a written lease with the previous owner. He had been renting on a verbal agreement for $300/mo. His prospects looked bleak.The reality was that if Willie got booted from this home he would have very little chance of finding another place to live. Willie didn't have much credit, but what he did have was a job and a little bit of money in a 401k account (not enough to retire on, but enough to purchase this home.)He made a $5000 offer for the home, which given its condition and location, was about $2000 more than what the seller would have gotten if it went on the market. It took a little work, but Willie and the seller reached an agreement at $5500. I am proud to say that Willie, now in his late 50's, is a proud first time home buyer and owner of the home he had been living in for the last 30 years.It is not too often that you get to help people in this situation. Circumstances do not always allow for this type of outcome, but when it does, it sure feels good. It also has a way of keeping life in perspective. This is one of the good things about this job.I would love to hear similar stories if you have one."Do not merely look out for your own personal interests, but also for the interests of others." Philippians 2:4
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Posted by Howard Bell on January 9, 2010 at 4:57pm
30-year fixed-rate mortgage: Averaged 5.09 percent with an average 0.7 point for the week ending January 7, 2009, down from last week when it averaged 5.14 percent. Last year at this time, the 30-year FRM averaged 5.01 percent.The 15-year fixed-rate mortgage: Averaged 4.50 percent with an average 0.7 point, down from last week when it averaged 4.54 percent. A year ago at this time, the 15-year FRM averaged 4.62 percent.Five-year indexed hybrid adjustable-rate mortgages ARMs: Averaged 4.44 percent this week, with an average 0.6 point, unchanged from last week when it averaged 4.44 percent. A year ago, the 5-year ARM averaged 5.49 percent.One-year Treasury-indexed ARMs: Averaged 4.31 percent this week with an average 0.6 point, down from last week when it averaged 4.33 percent. At this time last year, the 1-year ARM averaged 4.95 percent.Freddie SayzMortgage rates eased slightly this week after rising consecutively through December, said Frank Nothaft, Freddie Mac vice president and chief economist. Current interest rates for fixed rate mortgages are just about at their annual average for 2009, while ARM rates are considerably below their averages for last year. As the economy strengthens further and the Federal Reserve (Fed) decides to raise its overnight target rate, ARM rates will follow suit because they are typically tied to shorter-term interest rates. However, the federal funds futures market does not anticipate any Fed action until the second half of 2010Thanks for Readingwww.yourpropertypath.comRelated ArticlesThe Politics Of Home Ownership and How It Became Too Easy To OwnHousings Weak Recovery: Lets Follow The MoneyNAR: Existing Home Sales ReportRead more…
