1. Dreaming of REO

2. REO from the Banks (Gov) Point of View REO is a bank / gov term = Real Estate Owned (by the bank) Asset managers supervise bank-owned real estate. Banks can only have a certain percentage of REO on their books for the FED to loan them money for new loans. – THIS is how they make their money, by new loans! For each REO, the Bank has to consider; Their ratio of performing to non-performing loans Local market conditions, How long they've held the property, Local inventory REO taxes, Upkeep Hazard, security, loss risk Time required for the court to grant foreclosure, Requirements to take property back Work to place it with an agent, Agent commissions and then estimated wait for the house to sell..... Each Bank and each REO property has a unique urgency

3. Getting Started with REO Study the foreclosure laws in your state at http://www.foreclosures.com/state-foreclosure-laws/ Get training to do BPOs – BPO Direct or REO Nationwide Get listings by registering on; – Government Sites as Supplier Homesteps.com, FannieMae.com, hudhomestore.com – REO Vendor Lists REONetwork.com, Res.net – Asset managers use these sites to locate local agents Get in line. Many companies have a rating system. The faster you get the BPO turned in, the better your grade will be. The better your grade is, the more work you will get. Don't accept more BPOs or Listings than you can handle!!

4. Getting Started with REO Go to Five Star Convention in Dallas – Meet asset mangers and training Get organized! – Have a system for BPOs – Record keeping has to be perfect Audit 2 times per year unscheduled Monthly inspection and performance reports – If you are challenged in this area, get an assistant who can track all the details. – There are even Virtual Assistants who specialize in REO work! Virtual BPO and REO Assistant signs you up for a fee. www.virtuallyachieved.com/realestate/realestateagents.html

5. Where can I find bank-owned REOs? Several ways to locate bank-owned REO properties. Using the internet, finding bank-owned REO properties is easy.bank-owned REO Go directly to lenders themselves. Each lending institution, however, handles REO properties differently. Some lenders post bank-owned real estate lists on their websites. Smaller local banks usually have one individual in charge of REO inventory. Larger regional and national lending banks have Loss Mitigation Departments that deal exclusively with selling bank-owned properties. – Loss Mitigation Departments attempt to minimize the loss or damage caused by loans that have defaulted (non-performing loans).

6. Where can I find REOs? Pursue 3 types of companies to start listing REOs. #1 BPO companies. Only assign BPOs to Realtors Submit your completed report(s) to the investor/bank/lending institution that ordered it. Often refer you to their client(s) that order BPOs or assign REO listings. #2 REO Companies. Assign REO listings to agents that complete BPO work for them and are located near the REO property. National Default Servicing LLC (NDS) is one. #3 Banks, Government and Lending Institutions Fannie Mae, Wells Fargo, B of A and any other institutions that have portfolio loans are examples. Some of these will find agents in their own broker network to complete BPOs and list REOs. Others will contract with a BPO companies to find Realtors to complete their BPOs. All three are worth pursuing. Completing BPOs is the best path toward gaining credibility in the REO listing world.

7. Getting REO - Recommended Plan #1 1. Get signed up with several banks/lenders that need BPOs completed. Don't stop with just one company. You can search them out online or buy a list of them from a number of different places online for all different price points. 2. When offered the chance to complete a BPO try to respond immediately. Normally BPO requests are sent out to many agents at once. The first one to respond gets to complete the BPO. The good news is that you should receive a small stipend for your work ($75-$150) 3. Follow up with the lender that requested the BPO. Call the lender to ask if they received it from you and if they had any questions. No different than any other client that we have, following up is key. You are graded on your BPOs, just like any performance review – Accuracy and timeliness are two big factors. Do a little bit of everything. Many agents will sign up with everyone.

8. Getting REO - Recommend Plan #2 1.In most cases brokers instead of real estate agents should own REO business. 2.Reserve money to manage your bank owned listings. When banks contract with you to manage their properties, you are required to maintain the property as if you were the owner.bank 3.List your name in REO directories. Because there is such an oversupply of foreclosures, some banks will search for REO agents in directories to manage their properties. Most REO directories are on the Internet and require registration on the company’s website. 4.Conduct broker price opinions (BPOs). Gain valuable experience working with banks to price their REO properties. This experience showcases your skills. 5.Make a list of banks you are interested in representing. Narrow your focus to a list of 10 to start. 6.Contact the asset manager within the Asset management Companies. 7.Fill out the application with the bank. 8.Follow up with the asset manager within 10 business days to confirm they received your application and to inquire about the next steps to contracting with the bank.

9. Treat your REO listing as a fire sale, assume you only have 90 days. Must be part of the MLS. Clean the property, paint if necessary through vendors. – Many REO Agents, unfortunately don't even bother sending a cleaning crew to the house and show the properties in unsafely conditions. Take a lot of pictures. – The most common complaint from clients looking at REO homes is that there is only one photo. Some agents, even stage the house to get a better price. – Best thing, those expenses are reimbursed later. No personal properties. Visit the property often to check on its condition. (weekly) Marketing REO Properties

10. Pricing Depends on the mortgage company's ratio of non-performing loans, how much money they have into the deal with the attorney, agents, time, etc. where the property is, what the market is like, how much inventory there is on the market, etc. Ask the bank the same questions you ask a seller. What is most important to you, the fastest sale or the highest price? What is the minimum price you will accept? What do you have in the loan? History of the property? Why are you bringing it to the market now?

11. Marketing REO Properties Pricing Some loan companies and asset mangers who don't have a lot of REO or are not highly experienced in this are hard to deal with. Some banks are in CA and have loans in FL and have no clue what the market is like in FL.... it is your job to educate them and let them know that to get what they want, you have to know WHAT that is. REO sales can go much easier if you know who you are dealing with, what the bottom result required is and how experienced they are at this. Price them to reflect the condition and market them as bank owned or foreclosed. There are a lot of buyer's who will only look at foreclosed properties because they believe since its bank owned it must be a good value. Clients usually are interested to tour REO as well but they get discourage when they see the property conditions, especially when they needs a lot of work and the price is extremely high. Price it right!

12. Once You List an REO You need to be able to Manage the property Arrange evictions Change locks Arrange clean outs Provide lawn care Snow removal Maintenance and repairs Utilities Inspections Cannot use family or company owned by you. Cash You will need to have cash on hand because you have to pay for everything upfront and then wait 60-120 days to get paid back from the bank.

13. REO Ain’t Cheap (for You) Think hard about becoming a REO agent before you jump in head first. With the exception of HUD properties* you need to… Have $20,000 - $50,000 to front the bank for expenses Many offices have more than $50,000 out on loan to bank REO This is an expensive racquet but is very profitable also. * HUD has servicing companies they use to do clean out and maintenance.

14. Tips From the Pros There is no short cut, there are no secret lists, save your money... The best and virtually only way to list REO's is to earn it. You need to do the BPO's to get the listings. Some banks have shut down taking new applicants, they do have a waiting list in case the need arises for new agents in the area. You first need to start with the banks and mortgage companies you bring your buyers to to get loans. Talk to the loan officers and ask for referrals. Once you do get in with a company they will rate you on your BPOs and hand out the listings accordingly. On average it is 13 BPOs for a listing, sometimes less, sometimes more. BPOs need to be on time if not early, you are rated on timeliness, correct value, photos and your comments – They do not want canned comments, they want detail.

15. REO ReCap You'll have to do BPOs to get started. Get on REO Lists Market REOs like a Fire Sale It takes time and a lot of work but you can make it happen!

16. Dreaming of REO

17. Short Sales

18. Copyright © 2011 America's Home Rescue, LLC 5 Keys to Successfully Closing Short Sales: 1) Knowing the proper Step-by-Step Process, depending on the type of loan that you are shorting. The process for shorting an FHA loan is different than the process of shorting a VA or Conventional loan. So knowing the proper steps, and the order of those steps, is critical. Take-Away: Know what type of loan the Seller has!!

19. Copyright © 2011 America's Home Rescue, LLC 5 Keys to Successfully Closing Short Sales: 2) Knowing what components each of the Lenders require for their Short Sale Package, getting a copy of the Lenders Short Sale Package in a timely manner, and then submitting that Package, in its entirety and in a format that will get the banks attention, meet their requirements and ultimately get you an approval. Take-Away: Never submit an incomplete package!!

20. Copyright © 2011 America's Home Rescue, LLC 5 Keys to Successfully Closing Short Sales: 3) Knowing what the Lenders have to “net” in the Short Sale. All Lenders have a bottom-line amount or percentage that they have to “net” in the transaction. Knowing that net is absolutely imperative for you, the Agent, to know so that you know where to price the property in MLS, so that you generate an offer that will be both quick, but also sufficient to meet the bank’s net requirements, cover all of your clients closing costs, as well as cover all the commissions at closing. Take-Away: Know what the Lenders need to NET!!

21. Copyright © 2011 America's Home Rescue, LLC 5 Keys to Successfully Closing Short Sales: 4) Knowing what terms the banks will and will not approve in your Buyer’s Purchase Contract. Take-Away: Know when you can or cannot get Buyer’s Closing Costs or Repairs Covered!!

22. Copyright © 2011 America's Home Rescue, LLC Buyer’s Closing Costs What are the general rules regarding getting any Buyer’s closing costs covered in a Short Sale? Whether or not Buyer’s closing costs can be covered in a Short Sale depends on two things: 1.What type of loan the Seller has 2. What type of loan the Buyer is bringing What type of loan does the Seller have? What type of loan does the Seller have? FHAVA/Conv. What type of loan is Buyer bringing? FHAVA/Conv. Typically, the max allowed is 3% of Sales Price and Buyer must be offering at FMV. Max 1% of Buyer’s Loan Amount None!!

23. Copyright © 2011 America's Home Rescue, LLC 5 Keys to Successfully Closing Short Sales: 5) Establishing your credibility and your rapport with those Loss Mitigation Reps at the banks that will get your Short Sales approved and closed. Take-Away: Never get nasty with the LMR!!

24. Realtor of the Day Copyright © 2011 America's Home Rescue, LLC

25. Obtain Lead Closing Appraisal Qualification via Phone Listing Appointment Acceptance into Program SS Package to Lender Active in MLS Contract Approval Active in MLS Contract Appraisal Approval 5-10 Days 24 Hours 1-30 Days 5-30 Days 1-30 Days FHAVA & Conventional 5-30 Days 3-5 Days 48 Hours Establish Communication with Bank 5-30 Days Copyright © 2011 America's Home Rescue, LLC

26. FHAVAConventional What does the Lender need to net at closing? 88% Day 1-30 86% Day 31-60 84% 61+ Days 88% +/-85% (Based on Percentage of the Current Market Appraised Value) No less than 80% in High-Foreclosure Areas

27. Copyright © 2011 America's Home Rescue, LLC Short Sale Math Step-by-Step Process 1.Establish Net to Bank or “Foundation” 2.Factor in Miscellaneous Expenses/Fees 3.Factor in Commissions and Closing Costs 4. Negotiation Buffer Math Scenario $250,000 X.85 $212,500 + $1,000 + $1,500 $215,000 /.92 $233,696 /.97 $240,923 Market Value Lowest Offer MLS List Price Delinquent HOA Dues Property Taxes