Broker Agent

Bank REO Properties

The REO market is kicking back into full gear again with most industry experts agreeing that we are about to see a major double dip.  Bank Reserves are high with anticipation of the banks selling off billions of dollars in bad debt.  Some people have lived in homes for as long as two years without paying a single dollar on their mortgage.  Loan modifications have shown only a 20% success rate and short sales are taking too long, some agents have told us they have to sell a home two or three times before it was finally approved by a bank. And the governments’ incentive programs have all proven not  to work, so it is very unlikely they will continue with any new ones.  Foreclosures really are the only solution for banks at this point.
There has never been a better time to become an REO Real Estate Agent.

REOX will be offering REO Agent Certification courses helping you to break into the lucrative foreclosure market.  Asset managers are about to become overwhelmed with property assignments and will need top agents with REO knowledge.  They don’t have time to train anyone on how the do an REO.  REOX Certification will assure the asset manager that any agent they pick will be a top level expert in REO’s.

REO Certification

Don’t Have REO Experience? Get it now with the first REO Certification in the industry thru REOX

• REO Broker Licensing Courses
• Everything You Need to Know About REO’s
• Learn How To Earn More Income

How to Handle REO Deals

Distressed Property Transactions Require Elite Performance

Mortgage brokers can serve as an essential link in the real estate owner (REO) and distressed property markets. Brokers, however, must work harder and smarter than many retail lenders to keep up with regularly changing lending guidelines.

To do this, REO brokers must establish themselves as elite professionals and know how to work with partners, including REO listing Brokerages.

Getting Started with REO

First, brokers should know what retail lenders can offer and establish products for buyers who fall outside of those lenders' guidelines. By offering specialized programs and products and maintaining timelines, you can become a top performer.

It's also imperative that brokers are aware of all regulations, guidelines and programs available for distressed properties and loans. No longer can brokers count on guideline changes affecting only new files that haven't locked in a rate or program. Some industry or investor policy changes will affect approved loans or signed loan documents and mandate new underwriting conditions.

Often, this occurs outside of brokers' control, but REO brokers can minimize damage by remaining informed. This is especially true when working with REO and time sensitive distressed properties. When handling deals involving REO properties, mortgage brokers often will work with REO listing brokerages. These companies represent the distressed property eyes and ears of many financial institutions,, including banks and lenders, and can manage the properties for them. REO listing brokerages often possess credentials such as:

• Diverse Lending options, which are a must when buyer or properties don't meet standard industry requirements
• Financial backing, which is imperative for keeping substantial operating capital available for managing REO properties
• Accounting experience, including staff responsible for expenses paid on behalf of financial institutions and banks
• Repair teams and specialized REO contractors, who manage property rehabilitation, code compliance and lender - required repairs
• Office and field support personnel, who confirm the remedy of code violations and lender required repairs. They also can ensure compliance with sign off requirements, city inspections and possible homeowners association mandates.

Mortgage brokers who work with these property and listing brokerages must adhere to strict performance timelines and deadlines, as well. The time lost shopping for a better deal could derail the transaction and lose your buyers their dream home.

REO Listings - Getting it Right

REO listing brokerages will remember which mortgage brokers perform and which don't. Thus, it's important to seek lenders with proven track records and to ensure your clients are qualified to buy now.

By submitting quality preapproval letters with buyers' offers, you not only move deals forward but also established yourself as someone with whom REO listing brokerages will want to work and to whom they will refer other deals. You can help foster this by:

• Giving prequalification letters only to buyers whose supporting documentation you have examined thoroughly
• Being honest with potential buyers and telling them if they don't qualify
• Providing seamless communication to all parties involved and giving REO seller up to date timelines on all loans in process.

In addition, when unexpected situations arise, let all buyers, listing and selling agents, and escrow officers know immediately. The more detailed information listing agents receive, the more likely they can help salvage a client's deal. If no solution exists, quick communication will mitigate the loss of time, money and overhead for all parties. It's a huge red flag for REO listing brokerages when someone tries to handle an undisclosed issue behind closed doors. Mortgage brokers also should define the services, loan products, commitments, timelines and communications they will provide clients. Give all involved parties your contact information and make sure the prequalification letter issuers know current underwriting guidelines before the underwriter gets the file.

In many cases, appraisals must be completed within 15 days, and parties must meet financing contingency deadlines. Otherwise borrower' earnest money deposit can become nonrefundable. In most cases, appraisals must be completely independent of a mortgage broker's staff.

Many gray areas exist in getting loan documents addressed, processed, documented and produced in a timely and effective manner. Taking 48 to 72 hours to underwrite a file - and another 48 to 72 hours to product loan documents on a clean file - doesn't fall within the desired or even allowable timeline for many REO clients. Further, only last minute checks such as Federal housing Administration certifications, U.S. Department of Housing and Urban Development approvals, insurance, escrow and title information should remain.

Sellers also are starting to invoke more of their rights to stop delays in closings by requesting that earnest money is released to them for buyer's or lender' nonperformance or by charging per diem penalty fees.

With these factors in mind, it's clear that dealing with REO and distressed properties requires specialized skills. Mortgage brokers who hone those skills can find themselves in high demand as these properties continue to come to market. Those brokers who establish themselves as elite performers can build a large foundation of satisfied clients.

By working closely with REO listing brokerage, brokers can stand tall in knowing they're doing their part to help stabilized the real estate market.

By Desiree Patno
President of the National Association of Women REO Brokerages