To a town near you, the next REO wave is coming soon!
I predict that the United States is going to see an explosion of foreclosure related work again within the next 12 months or sooner.
You may be talking in your head and asking yourself “How the hell does she know that this is going to happen?!”
With record numbers of Coronavirus related job losses in the last few months that has led to massive amounts of people filing for and receiving unemployment, along with millions of people not being able to afford to keep paying their mortgage payments this WILL create a boom in the REO and BPO industry unlike anything we’ve seen since 2008. It’s just a matter of time and unfortunately, we all know that sometimes history repeats itself.
If you are an actively licensed real estate agent or broker, will you be prepared?
You know for me I find that it’s a rather strange existence to be able to work in the foreclosure side of the real estate industry because when things are bad for those so negatively affected, we do well and are able to thrive in most instances.
It’s a hard reality to experience growth, financial stability and opportunity when regular people’s lives are forever changed when they are faced with having to walk away from their home.
My heart really goes out to individuals and families that are forced to file a foreclosure or a short sale. I can only try to imagine how hard that would be to have to go through that and the after affects that come along by default, like having your credit get decimated.
The empath in me has a hard time with knowing that I simply can’t control bad things from happening to people out there but I do get to be a part of helping resolve issues so everyone can get closure and move on.
As a previous real estate professional that did BPO and REO work for years, I remember a few times walking into a foreclosed house and seeing sights that would make anyone want to cry. It was a very surreal but humbling thing to experience!
I know that I am very blessed and am extremely thankful to have been able to have carved out a niche market for myself that has provided me years of all-around stability.
Through it all, I try to look at the positive side to everything and remind myself that I chose this profession and that it has treated me very well!
Experienced, smart agents and brokers that pay attention to the warning signs NOW of how the effects of the COVID-19 virus is going to cause mayhem in the real estate market will have the best odds of success, if they plan ahead and start working on ramping up by having the best systems in place.
REO and BPO professionals are soon going to be flooded with potential work, like what happened with the mortgage meltdown a decade before.
In the coming weeks, months and in the next year, I predict a massive explosion of opportunities not only in the real estate market as a whole but I believe that it will peak strongly in the REO and BPO industry.
It will be a matter of time and a natural progression of cause and effect for the big build-up that’s currently building momentum, stealth-fully.
I recommend to those that are qualified and interested (an actively licensed real estate agent, broker or appraiser) to start to plan ahead RIGHT N-O-W.
Get the right tools, software & training to help you do your job and get organized strategically. Those that do will prosper, like I did and those who don’t will be forced with having to leave the industry. This isn’t a prediction, it’s experience speaking, because again I’ve personally gone through this cycle before – and maybe you have as well.
BPO University and BPO Automation Group are here to help you with automated form-completion software that allows you do a 2-hour BPO or REO form in less than 15 minutes.
BPO’s are a way to stay alive during a downturn, and they’re also an amazing tool to build your professional reputation with asset managers to get coveted REO listings.
Click below to view a demo of our BPO and REO form automation software now, and if you’d like to learn more about BPO’s or how to do them you can sign up to take our online course through my sister company, BPO University.
BPO Automation Group demo: BPO Automation Group Demo
BPO University: BPO Automation Group University
As a general warning, don’t expect to see a bunch of numbers, estimates and such within this article.
I’m not one to focus on exact numbers and statistical information and analysis. I find this all very boring although telling at the same time. Instead, I try to get and stay educated on issues, I use my common sense and first-hand personal experience of being a real estate professional that specialized in BPO work during the mortgage meltdown crisis of 2008.
After 15+ years of being in this special niche industry called REO (real estate owned / bank owned) and BPO (broker price opinion) work, I’ve seen and done almost everything on a professional basis and have strived to do my work as ethically and above board as possible.
It’s a great business to be in!
If we can help you in any way, please don’t be shy, reach out to us!
You lost your job. You are a Veteran. You cannot make your mortgage payments. You called your lender and their steely “debt collector” tone and threatening letter would scare anyone.
If you experienced loss of income on the Emerald Coast of Florida due to the COVID-19 crisis, the Veteran’s Administration has issued clarifications about how your VA mortgage lender must treat you. Initially, VA borrowers may have received intimidating letters, such as this:
In fact, this forbearance letter refers to foreclosure twice, as well as short sale, and credit implications. It implies that to catch up, the loan must be brought “current” through a reinstatement (e.g. lump sum payment), or another workout option. This is pretty scary stuff. The VA, however, has issued Frequently Asked Questions that should put you at ease regarding your VA mortgage and keeping your home, as specified in the Coronavirus Aid, Relief, and Economic Security – CARES Act:
- You may skip payments for 180 days and extend to 360 total days should you be economically impacted by Covid-19.
- Your credit score will not be changed to “delinquent” during this time (unless you were previously in default).
- You will not have to pay a late penalty, however, interest will accrue.
- You do not have to make a lump sum payment at the end of your forbearance payment (however, you can if you want to).
- Your VA mortgage lender may offer to modify your loan to extend the term, adding the missed payment months to the end or your loan (a type of deferment).
- Your VA mortgage lender may offer to make the missed payments payable in one amount at the end of your mortgage term. For example, if you missed $10,000 of payments, when you sell your house, the $10,000 amount would be added to your mortgage payoff.
- You could spread out the missed payments over time with an agreement from your lender.
- If you don’t recover financially at the end of the help period, you may do a VA Compromise short sale, a regular sale, or a deed-in-lieu of foreclosure.
Bottom line, if you contact your VA mortgage lender for help now during the Covid-19 crisis, they should respect you and your military service, and work with you, not force you to make a lump sum repayment.
If you decide to sell your Emerald Coast of Florida home, contact me to explore your options, whether by traditional sale or VA Compromise short sale.
Broker, Rulnick Realty, Inc.
Email Wendy: email@example.com
Wendy Rulnick, Broker, sells short sale, pre-foreclosure, REO and traditional real estate in Destin, Santa Rosa Beach, 30A, Miramar Beach, Crestview, Sandestin, Seaside, Rosemary Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Florida.
This post, Wendy Rulnick or Rulnick Realty, Inc. is not providing legal or tax advice. The information provided is for educational and informational purposes only. It is recommended that sellers considering a short sale should consult an independent legal and tax advisor for more information.
Last week, April 15th, I published a blog about titled, “The Impact of Not Paying Your Mortgage” where I focused almost exclusively on the direct impact to mortgage back securities and the widespread reach into each of our retirements. In that blog, I hinted at the fact that there was much more to be said on this topic yet, that would come at a later day and that day is now. Before I get started on the further impact of mass mortgage defaults, let me invite you to read my original blog, which you can find here: https://lhrllc.info/liberty-house-blog/f/the-impact-of-not-paying-your-mortgage
The Wuhan Chinese Coronavirus global pandemic has gripped our country into an economic stranglehold that will take generations to fully understand. To even come close to equating this time in our nation’s history, one must go all the way back to the Great Depression of the 1930’s. Even though most of us were born much later, the Great Recession of 2008 should still be in most people’s memory, I know it’s in mine. The Great Recession has never left my memory as it happens to be one area that I know a little about as a Real Estate Broker who has spent a career in the REO / Foreclosure niche during that time. If you would indulge me a little, let me share with you the wider spread impact of mortgage defaults that so many seem to forget but, before I do that, let’s spend a little time talking about the CARES Act.
In a rushed a hurried effort to stay off any housing collapse due to the Wuhan Chinese Coronavirus, our well-meaning legislators passed legislation that all but handed a majority of homeowners a Willy Wonka golden ticket encouraging people to not pay their mortgage. As honorable as those intentions may be, it’s my belief they have just turned a bad situation worse. Of course, when talking about the CARES Act, one must not forget, we are in a Presidential election cycle and it’s shaping up to be an epic battle between socialism and capitalism.
The most important thing you need to know about real estate and more specifically that monthly mortgage payment is that it’s an interconnected web. You need to think of it as an ecosystem on its own right. An ecosystem of balance that is built on the homeowner’s monthly mortgage payment without which has the power to collapse the entire system. Let’s start at the beginning.
When a homeowner makes a monthly mortgage payment, I can think of at least 5 things he’s paying both directly and indirectly. First off is the mortgage principal. All the mortgage principal is the outstanding balance owed minus of course the interest to the lender. Secondly is the mortgage interest or the money charged by the bank on the loan. Thirdly are the property taxes. Fourthly is the hazard insurance protecting the asset from catastrophic loss. Finally, the dividends paid on behalf of the mortgage backed security. I’m sure we can think of more but, for the sake of time and ease of understanding, let’s just focus on these top 5, so to speak. All of this can account of tens of billions of dollars and cumulative, across the entire banking ecosystem, trillions of dollars.
For most mortgages in this country, they are guaranteed by the U.S. Treasury. Let me say this again, it’s worth repeating. For most mortgages, they are guaranteed by the U.S. Treasury also known as the U.S. taxpayer. This means, if the banks don’t have enough money to pay the MBS dividend payment the U.S. taxpayer will. Some estimates are that in the federally issued mortgages, that accounts for about 2.2 trillion and in the conventional market, about 5.5 trillion. Now, I’ve covered MBS and CDO’s in my previous blog, which I linked up above so, let’s use this blog to focus on mortgage principal, interest, taxes and insurance.
Mortgage principal and interest are more often tied together so, let’s treat those as one issue. The American people are under the illusion that banks are sitting on vast wealth deposits like hidden bunkers of cash however, that’s just not true. In fact, multiple times this year, the federal reserve has issued trillions in over night bank loans just to ensure the banks have enough operating cash to keep the lights on and meet minimum bank reserve deposits. Let me put this another way. Some of the largest banks in our country and, for that matter the world, go to the Federal Reserve every night and ask for billions in over night loans just because they won’t have enough cash on hand to not only pay their own bills but to have the minimum cash as required by bank reserve laws. They won’t have that money till they count the payments that come in the next day. That’s why we call those loans, “overnight” loans. They are literally short term, over night loans so that the bank can meet its financial requirements until the next day, when they start depositing payments, like, car loans, credit cards and mortgages. Just to be clear, this has been happening, long before the Wuhan Chinese Flu. Feel that cold chill up your spine yet? No…. well, it’s about to get worse.
Imagine, if you will, a historically unprecedented mass of non-payments. Let’s say, somewhere in the tune of 20 million people, all at once, refusing to pay their mortgage, car loan and or credit card statements because, they lost their job last month and have no prospect of getting a new one anytime soon. Folks, you aren’t going to have to imagine this scenario for too much longer, that’s about to happen May 1.
That’s bad enough but now remember, insurance and taxes are in those payments as well, remember that ecosystem I was telling you about earlier, it’s all interconnected. Imagine May 1, millions, if not tens of millions not paying their homeowners insurance. Imagine the coverages that could lapse. Imagine the tragic “what if” scenario where a tornado rips through and destroys hundreds if not thousands of homes. Imagine the further burden on the American taxpayer. Here in Nashville, we have a economy that get’s a big chunk of it’s revenue from tourism, as you know, tourism has died so that revenue is gone and then, come May 1st, property taxes aren’t going to be getting paid. For a city that is required by our charter to have an annual balanced budget, we aren’t talking about cuts anymore, we are talking about austerity measures.
Finally and maybe most importantly, that well-meaning, well-intentioned CARES Act. Now, with the CARES Act, federally insured loans like, FHA / HUD, VA, USDA, FDIC and even Fannie Mae or Feddie Mac can get 12-month forbearance. That’s 12 months with no mortgage payment. Do I need to elaborate on how this may have just thrown water onto Greek fire?
We need to be coming up with a better solution here because, giving people a golden ticket to not pay their mortgage just isn’t going to work. In fact, it could very well lead to the country defaulting on its debt. I know none of this is fair. I understand we are at the mercy of the Wuhan Chinese Coronavirus pandemic. I understand millions of us are going to suffer and be irreparably harmed however, just as we prepared for triaging millions of people for the Wuhan Coronavirus, we need to start preparing our real estate industry similarly. Unfortunately, I’m not smart enough to know what the answer is but, what I do know is if we don’t start thinking of housing like a sick patient with millions of people at risk, we aren’t taking this issue seriously enough.
Good Reading from REO Pro Services, Inc Infection Control, Hospitals, Restaurants, Schools, and Institutions Educating The World Killing The Virus Documentation.
Firstly, we feel that it's important for you to be aware that the laws of the state of California require that a state licensed structural pest control company be present during work activities to post the proper signage at every entrance to your structures, supervision and chemical reporting over a project.
Though the chemicals that we use are considered low toxic, this service is way beyond a normal cleaning.
A state licensed extermination control operator must be present at the time to facilitate the service in order to assure compliance and safety. See the next paragraph definition copied from the California Structural Pest Control Board website.
What is Structural Pest Control.
Structural pest control is the control of household pests (including but not limited to rodents, vermin and insects) and wood-destroying pests and organisms or such other pests which may invade households or structures, including railroad cars, ships, docks, trucks, airplanes, or the contents thereof. The practice of structural pest control includes the engaging in, offering to engage in, advertising for, soliciting, or the performance of any of the following: identification of infestations or infections; the making of an inspection for the purpose of identifying or attempting to identify infestations or infections of household or other structures by such pests or organisms; the making of inspection reports; recommendations, estimates, and bids, whether oral or written, with respect to such infestation or infections; and the making of contracts, or the submitting of bids for, or the performance of any work including the making of structural repairs or replacements, or the use of pesticides, insecticides, rodenticides, fumigants, or allied chemicals or substances, or mechanical devices for the purpose of eliminating, exterminating, controlling or preventing infestations or infections of such pests, or organisms.
The key words that cause this service to be considered pest control are, controlling and or killing infections and organisms.
In addition to a CA licensed pest control company, our experienced environmental cleanup company will be staffing the project with the proper mechanical equipment and personal protection equipment such as bio suits, eye protection and respirators.
A disinfectant labeled as RMR-141 for your project that is produced by RMR BRANDS.
RMR-141 is an EPA–registered fungicide, mildew stat, virucide, disinfectant broad-spectrum formula kills 141+ different microorganisms. For use in hospitals, restaurants, schools, and institutions.
RMR-141 is designed for cleaning, sanitizing and fogging.
- Removing germs, dirt, and impurities from surfaces or objects through CDC sanitizing procedures and recommended sanitizing agents. • Cleaning highly visible stains on walls around trashcans and high traffic areas. • Cleaning uncluttered flat surfaces included but not limited to kitchen counters, sitting benches, workspaces, and counters through CDC sanitizing procedures and recommended sanitizing agents. • Providing high dusting and cobweb removal. • Doors and doorknobs shall be disinfected and sanitized. • All touch points need to be disinfected (e.g. tables, chairs, pencil sharpeners, phones, switches/buttons, doors, handles, sinks, drinking faucets, dispensers, blinds (handles, cords), all areas that could have been touched in a particular space.) • Disinfect and sanitize all glass/mirrors, sinks, fixtures, toilets, urinals, handles, switches, buttons, dispensers etc. (all areas that could have been touched in a particular space). • Common area handrails shall be disinfected and sanitized. • Keyboards shall be dusted, disinfected and sanitized. • Vacuum and Disinfect carpets.
- Wipe all fixtures and disinfect • Wipe all partitions and disinfect (all uncluttered flat surfaces) • Wipe and disinfect all walls in RRs • Clean (disinfect) all glass/mirrors, sinks, fixtures, toilets, urinals, handles, switches, buttons, dispensers etc. (all areas that could have been touched in a particular space) • Replenish all dispensers and empty all trash/feminine receptacles as needed. • Disinfect all horizontal surfaces (sweep/mop flooring) • High dusting performed • Vacuum/wipe down all air vents.
VP Client Services
REO Pro Services, Inc.
WHY HIRE A REAL ESTATE VIRTUAL ASSISTANT?
Has anyone ever received business from the Five Start Institute? I was with them years ago and in REO redbook. They are offering 99.00 per month for a one year contract. They said they had a lot of new clients. I just don't really believe it. There aren't many REO properties right now.
WHY HIRE A REAL ESTATE VIRTUAL ASSISTANT?
The end of the year is near and we can see some light at the end of the tunnel. Our Pipeline software is relied upon by hundreds of Agents nationwide for outsourcing or automating Broker Price Opinions.
Any Agents currently rendering our services have been made aware that our software is being rebuilt as I speak. Current progress stands at 60% and estimated delivery is Jan. 1st, 2020. In recent years our software has slowed as we continued to build out customizations. The framework ultimately lagged and caused delays in most key functions.
The new approach was to build a modular design so we can simplify the codebase and customize with add-ons which can be added/removed with much less coding. As an example our image uploader is currently clocking in approximately 50X faster for image uploads. This is critical for everyone who uses our services as much time will be saved!
Keeping with recent minimum wage hikes and inflation we will be increasing our Outsourcing prices on Jan. 1st 2020 by about 10% for Exterior BPO's & Interior BPO's. We urge all Agents/Brokers who are interested in rendering services now or in the future to lock in and get registered a FREE account before Jan. 1st, 2020. All Agents who lock in before this time will receive our 2019 rates for as many years as they use our services. It could literally save you thousands!
First and foremost we thank all of our current Agents/Brokers who have trusted us throughout the years. We could never be able to offer our manpower and software without your unwavering support!
From the owner of the NRBA
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