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  • 1. REOMAC® 2007 Fall Conference REOMAC® is dedicated to advancing the careers of professionals in the default industry through education, networking and teambuilding. October 10-12, 2007 Westin Diplomat Hotel Hollywood Florida 3555 South Ocean Drive Hollywood, FL 33019 (954) 602-6000 REOMAC® Rate $239.00 SAVE THE DATE
  • 2. July / August 2007 REOMAC® 2007 Board of Directors OffiCERs Mary Best-Brill, President Chase Home Finance Shelley Kaye, Vice President Option One Mortgage Corp. Ralph Barone, Secretary NJ REO Asset Management & Realty Features Bob Siegmeth, Treasurer IndyMac Bank When Being #1 Isn’t a Good Thing – Matt Huffine . . . . . . . . . . . . . 8 Julie Randall, Just What Is Going On With HB4050? – Thomas Anselmo, Esq. . . 10 Immediate Past President Union Bank of California At What Point is a Property Vacant to Exclude Insurance Coverage? – T. Robert Finlay, Esq. . . . . . . . 1 BOARD MEMBERs Art Acosta Disposing of Bankruptcy Cases Under BAPCPA: Regency Realtors To Strike or Not to Strike? – Thomas C. Frost, Esq. . . . . . . . . . . . . .17 Kathy Jeffers-Volk Northwest Market Update Coldwell Banker Corporate REO Div. Greater Seattle-Portland – Keith Brown Andrea Johnson . . . . 20 Donna La Porte Wright, Finlay Zak, LLP March 1st REOMAC® Dinner Meeting – Valencia Walker. . . . . . . . . .21 Bradlee Marick The Future Is Now’ Was Celebrated Through Education, Fidelity National Asset Networking and Teambuilding with REOMAC®’s Management Solutions Most Successful Spring Conference! – Diana Kendall . . . . . . . . 25 Tom Moon Pacific Moon Real Estate • Economic Forecast – Ronald S. Deutsch, Esq. . . . . . . . . . . . . . . . 26 Mia Semo • Alternatives Rock! – Gary Weglarz . . . . . . . . . . . . . . . . . . . . . . . . . 28 National Default Servicing, LLC • Town Hall – Changing Markets – Beatrice Davis-Williams . . . . 29 Sara Waite • Get Smart Before Your Deal Fails – Jim Conway . . . . . . . . . . . .1 GMAC Mortgage • Technology – Joel Wilmouth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Connie White • Mergers Acquisitions – Cynthia A. Nierer, Esq. . . . . . . . . . . . . 5 Option One Mortgage Corp. • Valuations – Kevin Alaimo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 • Energized Lender/Outsourcer Sessions – Connie White . . . . 7 REOMAC® HEADquARtERs • Lender-Only Session – Benton Neese . . . . . . . . . . . . . . . . . . . . . 9 Jennifer Blevins, CMP • Broker-Only Session – Tom Moon . . . . . . . . . . . . . . . . . . . . . . . . 40 Account Executive Thanks and Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 John Berkowitz Publications Director Joseph Davis Account Executive Departments Kim Ingersoll President’s Message – Mary Best-Brill . . . . . . . . . . . . . . . . . . . . . . . . . 4 Account Administrator / Advertising Administrator Editor’s Message – Kathy Jeffers-Volk . . . . . . . . . . . . . . . . . . . . . . . . . .5 Melissa Piano Headquarters Happenings – Joseph Davis . . . . . . . . . . . . . . . . . . . . 6 Account Administrator Stephanie Schoen BuyBankHomes Default Industry – Bradlee Marick . . . . . . . . . . . 54 Special Projects Copyright 2007© by the Association of Real Estate Owned Managers. The membership includes lenders and servicers; attorneys and Tricia Schrum, CPA No portion of this magazine may be printed without express written vendors; and real estate brokers from across the country. REOMAC® Accountant consent of REOMAC®. The writings within these pages do not members are dedicated to improving the quality of service they necessarily reflect opinions of REOMAC®. provide each other and the industry at large. REOMAC® 2520 Venture Oaks Way, Suite 150 REOMAC® is a not-for-profit corporation dedicated to the professional With the exception of products or services, or articles specifically Sacramento, CA 95833 advancement of its Regular, Affiliate and Associate members under REOMAC® control and supervision, it is the policy of REOMAC®, 916-239-4090 • 916-924-7323 fax nationwide. REOMAC® provides resources to anyone whose career its Officers and board of directors and the Editor of this publication, interest revolves around pre- and post-foreclosure, loss mitigation NOT TO ENdORSE ANY PROdUCTS, SERVICES, OR OPINIONS • and the management and disposition of distressed assets. EXPRESSEd IN THIS PERIOdICAL. REOMAC® updatetm July / August 2007
  • 3. Mary Best-Brill 2007 REOMAC® President t HE FUTURE IS NOW Day t wo began with our $44,500 for our Scholarship in New Orleans in May and – a succinct theme to “Only” Sessions and there was fund. Thank you for your Philadelphia in June. In fact, wrap around a conference something relevant for each generous donations and those some of the folks we met in which held so much promise of our attendees. The wisdom of you who were sponsors. You these cities will be bringing for all who attended. …all 1359 of our Education Committee and your families will be the their market knowledge to of us. This was arguably the knew no bounds as they created recipients of the scholarships Florida to share with you there. most important REOMAC® exclusive sessions for Lenders, from this fund as a Members Our dinner meetings will be Conference to date. The sharing Outsourcers, Brokers, Attorneys Only benefit. Watch for a covered in the September issue of information by the industry and Title Officers. Each of us section in a later issue of our of “REOMAC® Update” so you leaders who participated in this facing a myriad of unique “Update” in which scholarship won’t miss anything either! By conference was beneficial to the challenges in the marketplace recipients share their stories visiting your markets around success of all who attended. had the rare opportunity to with REOMAC® on the benefits the country, with your feedback brainstorm with our peers in they received from their and interaction, we expect to Our program opened with these “Only” sessions. REOMAC® scholarships. keep REOMAC spot on the Bob Hirschfeld’s candid and market trends nationally humorous view of the world Mergers and Acquisitions, Thanks a mi l lion to our of Technology. All too true Technology, Valuations, Blighted Foundation Sponsors: Platinum October in Florida will be a and offered some of us a few and Distressed Properties Sponsor: NRBA, Gold Sponsor: continuation of the FUTURE moments of levity which were – where to go next? With First American Title Insurance is NOW – Market Updates sorely needed after months concurrent sessions running Company, Silver Sponsor: – Christopher Thornberg will in “the trenches”! Keeping – there was just too much in Adams AMI, Bronze Sponsor: be bringing us his economic us abreast with the state of day two to see it all. Then the McCurdy Candler, LLC, as perspective. We will have a the market, Dr. Lawrence close of the day, saving what well as our Golf Sponsors: speaker from one of our dinner Yun presented us with the some feel is the best for last Grand Platinum Golf Sponsor: meetings that I will refer to economics of our industry – the Lender Roundtables. This McCabe, Weisberg Conway, as a “CSI kind of Guy” and from his perspective as Senior session has been expanded to PC, Grand Gold Golf Sponsor: many other surprises from Economist of the National include outsourcers. Connie Steve King, The King of Homes. our Education Committee Association of Realtors. His White once again encouraged I know that I have said it probably who is hard at work to bring review of where we have been, our Lender and Outsourcer a million times – but REOMAC® you another very essential how we got here, and where we members to bring their latest is a not-for profit organization conference. may be going was especially initiatives to the session and without your support, the enlightening and offered some attendees. Connie succeeded conference couldn’t be what it I so much appreciate your insight into what we have in signing up 33 lenders and is today. participation in REOMAC®’s to look forward to for the outsourcers for this session. It events, whether it be our balance of 2007. Sessions for is one of the favorite sessions In keeping with REOMAC®’s conferences or dinners, and the balance of the day included, for our attendees. mission this year, the Board look forward to seeing you soon! Alternative Disposition of of Directors has scheduled a I welcome your comments and Properties, Bob Norrell’s Town The Gala Dinner Monday night dinner meeting almost every suggestions as we continue to Hall, the innovative “Get Smart was “Out of this World” and the month around the United build your organization. Before Your Deal Fails”.... Day auctions once again, under the States, with the exception one looked like a true “Who’s guidance of our Conference and of April and October – our Who” of the Default Industry. Scholarship Committee, raised conference months. We were 4 July / August 2007 REOMAC® updatetm
  • 4. Kathy Jeffers-Volk Editor A s usua l – it was offers numerous solutions to Equity Group of Beaverton, Joel Wilmoth – Super wonderful seeing each the default problem. OR. Their article gives us an Session A – Technology of you at the Spring overview of the current market Conference. It is an honor Tom Anselmo, Esq., Freedman, condition in the Northwest. Cynthia Nierer, Esq. – Super being a part of an organizing Anselmo, Lindbert Rappe, Session B – Mergers and team that consistently produces submitted the article, Just Thanks go out to Valencia Acquisitions the premiere default servicing W hat is Going on w it h Walker for providing a write Kevin Alaimo – Super conference year after year. HB4050? Here is the Status. up on the March 1 dinner Session C – Valuations Once again the sessions were HB 4050, as you may remember, meeting held in Hollywood, timely and informative, the is Illinois’ answer to predatory Florida. Not only was it an Benton Neese – Lender Only networking opportunities lending practices. Tom brings informative meeting, but it Session abundant and the camaraderie us up to date on the changes that offered us an opportunity to and interactions among the have occurred to this Bill since see the beautiful facility where Tom Moon – Broker Only attendees endless. first being implemented. our Fall 2007 Conference will Session. be held. Specia l t ha n k s need s to At What Point is a Property Our next issue of REOMAC® go out to our Foundation Vacant to Exclude Insurance The recent Spring Conference Update will have important Sponsors – their financial Coverage? by Robert Finlay, was a success with over 1,300 coverage of the recent dinner support allows us to put on Esq., Wright, Finlay Zak, people in attendance and the meeting held in New Orleans. the quality conference you LLP, was first published in the sessions were filled, some Look to receive the Update in have all come to expect from UTA Quarterly. The article only with standing room early September. REOMAC®. So thanks goes to: has relevance especially when available. I would like to take Platinum Sponsor – NRBA; trying to decide whether to this opportunity to thank Gold Sponsor – First American place force order insurance on my “reporters” who wrote Title Insurance Company; your vacant REO properties. summaries on the sessions. Silver Sponsor – Adams AMI; The reporters and the sessions Bronze Sponsor – McCurdy Thomas C. Frost, Esq., Rosicki, they covered are: Candler, LLC. Rosicki Associates, P.C., reviews the importance of Ron Deutsch, Esq. – We have a variety of topics ensuring the credit counseling Economic Forecast with NAR in the Update this month requirement in bankruptcy economist, Dr. Lawrence Yun starting with When Being #1 proceedings is met in the Isn’t a Good Thing by Matt emphasis of the article titled Gary Weglarz – Alternative Huffine, Marketing Manager Disposing of Bankruptcy Disposition of REO – Royal Title Service. Matt Cases under BAPCPA: To Properties examines the causes for the Strike or not to Strike? Beatrice Davis-Williams high number of foreclosures – Town Hall in the Mid-West, particularly Northwest Market Update in Indiana. But Matt does not Greater Seattle-Portland was Jim Conway – Get Smart stop with listing the cause of written jointly by Keith Brown, Before Your Deal Fails most of the defaults, he also CREO, Andrea Johnson, CREO, ReMax REOMAC® updatetm July / August 2007 5
  • 5. Joseph Davis Account Executive R EOMAC® momentum We would like to thank all the We would like to thank all continues to grow and sponsors who have signed up those members who have many changes have already for the Fall Conference. returned their membership taken place. If you have not I f you a re i nterested i n data verification form for the Jennifer visited REOMAC®’s new Web sponsoring an event for the directory. This information will Blevins, CMP Account site, you should. The new Fall Conference, please visit help ensure the membership Executive Web site has been designed our Web site at www.reomac. directory contains your most to bring REOMAC® into the com. Click on the calendar current information. You future. The new Web site is just link on the left hand side of the can expect to receive your the beginning of REOMAC®’s home page and there you will membership directory by the John rebranding. There has been find the link to the Exhibitor/ end of July. Berkowitz Publications a change to the logo and Sponsorship brochure. Director REOMAC®’s materials are also With all the growth that is being updated to match the You will notice some changes occurring, I am excited to new feel and strength of this in the registration process announce that Melissa Piano great association. for the Fall Conference. We will be taking over the duties Joseph Davis are bringing back online of membership. Melissa will Account This new strength was definitely registration so you can register be processing new membership Executive felt at the Spring Conference at online with a credit card. If applications and answering the Esmeralda in Indian Wells, you are paying by check, you potential member inquires. California. Attendance for will still need to mail in your As a member of REOMAC®, if the Spring Conference was registration form with your you have a question regarding Kim Ingersoll close to 1,300 attendees – the check. Registrations will your membership, please give Account largest conference REOMAC® not be processed unless they Melissa a call at (916) 239-4090 Administrator has ever had. We expect are received with the correct and she will be happy to assist this energy and enthusiasm payment amount. The second you. to continue into the Fall change will be in making your Melissa Conference to be held October hotel reservations. You will not Thank you for your continued Piano 10-12th in Hollywood, Florida. be able to receive the REOMAC® support of REOMAC®. If Account The education committee is discounted guest room rate you have a ny com ment s Administrator working hard to assemble an until your registration has or questions, please do not educational program that will been processed. Once your hesitate to contact us. excite all the attendees. At registration has been processed, Stephanie the same time the conference you will receive a confirmation Schoen committee is planning all the code for the hotel that will allow Special details to make sure your time you to make your reservation Projects at the conference is not only in the REOMAC® room block. educational, but fun. This will help assure conference attendees who wish to stay at the host hotel get a room at our Tricia discounted rate. Schrum, CPA Accountant 6 July / August 2007 REOMAC® updatetm
  • 6. When Being #1 isn’t a Good thing By Matt Huffine i ndiana was #1 in foreclosures – Why? These increased payments resulted from they can get loan approval. There have What a loaded question this is! Why real estate taxes being re-assessed to been a number of appraisers who appraised have foreclosures soared throughout include the new improvements on the properties at a level higher than their actual the country and especially in the Midwest? land. Also, many of these buyers started value, so that the borrowers could qualify It’s safe to say that a myriad of variables with an adjustable rate loan or a loan with for a specific loan amount. If the borrower have contributed. some sort of “teaser rate” that increased became unable to pay their mortgage, the over time. property was often “upside down” in loan Contributing factors: to value, which made the properties more Predatory Lending – Predatory lending difficult to sell unless the price was deeply Change in Available Jobs – As the United causes families to suffer because of discounted. Naturally, this can affect the States trends from a factory to a service abusive practices in the lending world. pricing of the whole market. economy, there have been many changes These practices strip borrowers of home in the jobs available. Often the skills in equity and ultimately cause families to go Title Company Closers – Someone has one job don’t transfer to other job options into foreclosure, which destabilizes the to facilitate these transactions. Often the and opportunities. Also, layoffs from community in which they live. Sometimes closer at a title company was colluding with high paying factory jobs, especially in individuals were persuaded to make false the mortgage broker to fraudulently close the car industry, have made it difficult statements or were convinced to borrow the transactions. Some of the possible for homeowners to keep current on their more money than they knew they could scenarios included “straw” buyers. Once mortgage payments. afford to repay. People are now being the over inflated appraisal was performed encouraged to read everything more and the “borrower” was approved, a closing Interest Rates and High-Risk Loans carefully and ask questions to avoid this. was held. At the closing, the settlement – Rates have been fairly steady and are statement had the buyer “cashing out,” to some of the lowest in U.S. history. Many Lending Standards – In a nationwide make “repairs” to the property. Since the borrowers have had adjustable rate effort to make home ownership more buyer didn’t really exist (someone else’s loans and haven’t been able to make the available, new loan programs have been credit is used), the person at the closing adjustment with the payment increases developed. Many of these programs make acting as the buyer would skate off with they have experienced. Additionally, an effort to qualify borrowers with less the money. Obviously, these are fraudulent some borrowers were pressured to accept stringent standards. Sometimes these transactions, but lead to foreclosures, high-risk loans such as a balloon loan or standards have been miscalculated and because no one was around to make the an interest only loan, some of which had the borrowers have ultimately had an mortgage payments. steep pre-payment penalties. inability to pay. Long term amortization schedules and 125% LTV mortgages may Trusting Culture and Speed of Transac- Newly Constructed Homes – As more look attractive in the short term, but in tions – Midwesterners, in particular, new homes have been built, many of the the long run, they may cause the borrower are generally very trusting and probably buyers have been first time homebuyers. some hurdles they are unable to handle. used to make the assumption that all of Along with the newness of homeownership, the real estate professionals involved in often comes the inability to foresee that Appraisals – As with all industries, their transaction are looking out for the the future mortgage payments could there are some bad apples. Lenders will increase past the buyer’s ability to pay. sometimes push for higher appraisals, so continued on page 8 July / August 2007 REOMAC® updatetm
  • 7. When Being #1 Isn’t a Good Thing – continued from page seller’s or buyer’s best interests. Try as and Appraisal Associations have started of enforcing them, as necessary, to protect we might, since the speed of closings has communication, networking, and training homeowners. An example in Indiana is increased dramatically, it’s difficult for within and among themselves. REOMAC® the recent creation of the Title Insurance each respective party to keep track of their is one platform that allows organizations Enforcement Fund (TIEF). A $5.00 fee is own interests and those of the seller and to have greater information flow. added to every owner’s mortgage policy borrower. Also, in certain situations, the issued. The funds will be used to increase responsibility of who should be watching Standards – Standards can be created for the enforcement of improper real estate out for whom gets blurred and sometimes each industry to help select the business transactions (http://www.indianalandtitle. people loose sight of the fact that we are all partners that know and understand the org/insurance_enforcement.cfm). ultimately here to serve the customer. local laws and regulations. The selection process for our business partners needs Conclusion: Industry Expertise – With the advent further scrutiny. Ask how long a company of various refinance booms, this invited has been in business, ask for references, We will never completely eliminate many untrained individuals to join in the check out the references, and check the foreclosures. With that being said, as an real estate process. Even though many had ownership. industry, we can hone our skills to reduce little to no industry expertise, they received the probability of future foreclosures where little or no training and had to “wing it.” Governmental Oversight, Regulation, possible. We will all need to identify and This often resulted in misjudgment and and Enforcement Action – Much of the learn to better recognize various portions errors in decision-making. industry is regulated by the Department of the process that we can improve, so as of Insurance, Department of Financial to minimize and mitigate lender losses. solutions – Institutions, or by similar State and Federal By working together, we can continue to Where Do We Go from Here? Departments. Increasing foreclosures improve the process! have precipitated taking a pro-active Consumer Education – In an effort to stance in trying to identify weaknesses help homeowners plan and not get in over and take action. Some actions include Matt Huffine is the Marketing Manager their head, they need to understand the developing an “oversight” group to help for Royal Title Services – Statewide in true costs of homeownership. They should monitor activity. Regulations have been Indiana. learn how to anticipate and budget for rainy put in place where needed, with the goal days and variations in mortgage payments. This includes reviewing scenarios of looking at monthly payments that show possible increases in real estate taxes, possible property repairs, and general maintenance that goes along with home ownership. Also, many homeowners run into unforeseen financial difficulties such as medical bills, car repairs and loss of a job. Use of the Internet to get information about prices for property, services, and proper budgeting are also great tools to educate the consumer. Industry Education – Nationwide industry professionals have been required to take more structured continuing education, so that we can further assist our clients. The goal is to balance the need for vigorous consumer protection with vibrant business competition, which should result in a healthy marketplace for consumers and the industry alike. Communication – With all of the foreclosures taking place throughout the nation, many professional organizations like the State Banking, Title, Realtor REOMAC® updatetm July / August 2007 9
  • 8. Just What is Going On With HB4050? Here is the status By thomas Anselmo, Esq. i f you are involved in real estate or University of Illinois at Urbana Champaign lender must report whether the proposed mortgage lending, it is hard to imagine in which sales volumes were monitored in loan permits interest-only payments, that you haven’t heard of HB4050 by the 10 designated zip codes and compared whether the loan can result in a negative now, as it has been a controversial law with a control group of zip codes. The amortization and whether the overall to say the least. Officially known as the result showed a 50% drop in home sales in package is an “80/20” (100% financed) loan. “Illinois Predatory Lending Database Act,” the affected zip codes compared with a 20% Additional information is also required commonly referred to as HB4050, the law drop in the control group. By all reports, about the borrower, such as whether the was signed by Governor Blagojevich in community and civic leaders from the borrower is a first-time home buyer. 2005 and took effect January 1, 2006. affected zip codes also weighed in against the Act as initially implemented. In addition to the creation of a database, The Act confers upon the Department of the Act is also designed to require Professional Regulation, Banking Division So the initial regulations that implemented counseling for certain borrowers who (“Banking Division”) the responsibility of the Act died a quick death when on January are considered to be vulnerable to unfair implementing the Act. This initially took 19 of this year Governor Blagojevich lending practices. Under the initial place on September 1, 2006. By its terms, directed the Banking Division to suspend implementing regulations, the counseling the Act is a four-year “pilot program.” them by changing the designated area from provisions applied where borrowers’ FICO By regulation, its initial implementation 10 zip codes to no zip codes at all. scores fell below a certain level and where applied only to ten zip codes located mostly the proposed loan contained features in the Southwest quarter of Cook County. However, at the end of March the considered to be risky, such as interest However, as just about everyone knows by Governor’s Office announced a second try. only loans, negatively amortized loans, and now, the initial implementation of the Act This time the Act will apply to all of Cook the like. The proposed new regulations was abruptly suspended in January of this County. But the proposed new rules also represent a substantial revision. year and changes are afoot. substantially change the circumstances under which the Act applies. Under the new regulations, the emphasis Af ter the Act was implemented in is on the lender rather than the borrower, September, 2006, the Banking Division The Act still requires the Banking Division and there is no reference to the borrower’s took steps to monitor its effect. The to create a “Predatory Lending Database.” FICO score. The new regulations would feedback was not positive. In a public As before, all mortgage brokers and loan require a counseling referral for borrowers hearing held at the Thompson Center originators licensed by the Banking who are either first-time home buyers or on November 27, 2006, comment was Division must enter mortgage loan who are refinancing, if the proposed loan decidedly negative. In addition, a January application information into the Database. contains any of the following features: 19 press release from the Office of the The proposed new regulations expand the Governor referenced a study from the required information. For example, the continued on page 11 10 July / August 2007 REOMAC® updatetm
  • 9. HB4050 – continued from page 10 a) interest only payments are those provisions are not affected by Administrative Rules can ask the Banking permitted; administrative rule changes. For example, Division for clarification or additional deeds for transactions within the effected information. b) negative amortization is possible; area must still be recorded with an accompanying certificate of compliance If the second notice period expires c) points and fees exceed 5%; with the Act or a certificate of exemption without legislative action, the new rules from the Act. Further, in the event of a will become permanent. However, at this d) the loan relies on stated income; foreclosure of an affected mortgage, the time there is still no official designation of lis pendens must still be recorded with a the area in which the pilot program will e) the loan is part of an 80/20 loan; statement that the lis pendens was served take effect. Governor Blagojevich has upon the mortgagee, or it is of no effect. announced that he will direct the Banking f) pre-payment penalties apply, or Failure to comply with the Act remains, Division to designate all of Cook County as by definition, a violation of the Illinois the pilot program area, upon the proposed g) the interest rate is adjustable. Consumer Fraud Act. new rules taking affect. Yet, that official act must still be formally completed before As before, the counseling must be The proposed new regulations have yet the law again takes effect. conducted by a “HUD-certified” counselor. to take effect. They were published in However, the new regulations state that the Illinois Register on April 6, 2007, counseling can be done by phone where whereupon a 45-day first notice period Thomas Anselmo, Esq. is a partner with an in-person counseling session would began, during which the public can submit the Naperville, IL law firm of Freedman, create a hardship for the borrower. comment. When the first notice period Anselmo, Lindbert Rappe. expires, a second 45-day notice period Many of the Acts provisions are statutory begins in which a legislative committee rather than regulatory, and obviously known as the Joint Committee on REOMAC® updatetm July / August 2007 11
  • 10. At What Point is a Property Vacant to Exclude insurance Coverage? (Reprinted with approval from UTA Quarterly) By t. Robert finlay, Esq. “Do most of our lending clients even *600 ‘If loss or damage occurs to a After the original tenant left the property, it know that they might be uninsured if building that has been vacant for sat vacant for more than 60 days, triggering the property is vacant?” more than 60 consecutive days the Vacancy Exclusion. However, TRB prior to the occurrence of that then rented the property to a new tenant W hen I was first asked to write loss or damage, we will: with the understanding that the new an article on the recent TRB tenant would not take possession until Investments case,1 I struggled to a. not pay for any loss of damage after TRB completed a substantial remodel. find the relevance of it to the majority of caused by: In the middle of the remodel process, the REOMAC’s members and clients. The TRB 1. Vandalism; construction crew returned to work one Investments case holds that damage to the 2. Sprinkler leakage, unless you morning, discovering that a water heater secured real property could be excluded have protected the system or waterline had burst, causing over from insurance coverage if the damage against freezing; $1,250,000.00 of damage. Yes, million! occurs while the property is undergoing a 3. Building glass breakage; remodel. The court’s logic is that, unless 4. Water damage; TRB submitted a claim to Fireman’s the remodel requires the “substantial and 5. Theft, or Fund. Fireman’s Fund rejected the claim, continuing presence of workers at the 6. Attempted theft. citing the Vacancy Exclusion. Specifically, premises,” the property could be deemed Fireman’s Fund argued that a remodel is vacant, which is an exclusion to many b. Reduce the amount we would not “construction” under the policy and insurance policies. The real relevance of pay for the loss or damage by therefore, because there was not a tenant this case then dawned on me -- do most 15%. in the property, the Vacancy Exclusion of our lending clients even know that applies and the claim is not covered. After they might be uninsured if the property A building is vacant when it does attempts to informally resolve this matter is vacant? After polling some clients, I not contain enough business failed, TRB filed suit. realized the answer is no. The problem is personal property to conduct that the TRB Investment case confirms it customary operations. Fireman’s Fund prevailed at the trial court is a very important question. Why, will and Court of Appeals levels. In upholding be answered below. Buildings under construction summary judgment in the insurer’s favor, are not considered vacant.’” the Court of Appeals reasoned that the In 1999, TRB purchased an insurance [Emphasis added.] definition of “construction” involved “the policy for a commercial building from creation of something new …” and that Fireman’s Fund Insurance Company. The The rationale behind the Vacancy Exclusion because a remodel did not create a new policy included a “vacancy” exclusion that is that a vacant property carries a greater building, it did not qualify under the provides as follows: risk of damage because no one is there “construction” exception to the Vacancy to deter vandalism and promptly report Exclusion. “8. Vacancy damage. continued on page 14 REOMAC® updatetm July / August 2007 1
  • 11. At What Point is a Property Vacant? – continued from page 13 In a matter of “first impression” the that of an occupied building, thus giving course of foreclosure that the property is California Supreme Court granted review the insurer the benefit of its prior risk either vacant or undergoing a substantial and reversed the Court of Appeal’s decision. assessment.” remodel, it should disclose this information The Supreme Court held that insurance to the client so that the client can review coverage must be “interpreted broadly so The Supreme Court then remanded their insurance policy to see if they are as to afford the greatest possible protection the matter to the trial court for further covered. Trustees should keep in mind to the insured, [whereas] … exclusionary presentation of evidence on whether the that, when disclosing this information, clauses are interpreted narrowly against remodel met the Supreme Court’s standard you may have to educate the lenders as to the insurer.” Using this rule, the Supreme of “substantial and continuing presence of why the information is important. Court reasoned that a liberal reading workers.” In time, we will learn whether of the term “construction” includes TRB’s contractors met this standard. But, What the lenders must do if they learn from a substantial remodel. The Supreme for purposes of our lender clients, the rule their trustee or otherwise, that the property Court added that the additional risk that and the risk is set -- a remodel may exclude is vacant or in the middle of a substantial the Vacancy Exclusion was intended to insurance coverage. And, perhaps more remodel, is a more complicated. address, i.e., “to prevent vandalism and important, it highlights to our clients ensure the prompt discovery of damage,” that a vacant property may not be insured • First, the lender should check to would be satisfied so long as the remodel against certain types of losses. see if there is force-placed coverage. required the “substantial and continuing Fortunately, many force-placed presence of workers at the premises.” In What does this mean for our Trustees, policies anticipate that the property essence, the regular presence of workers lenders and clients? For the Trustee, it is on the property is “roughly equivalent to simple - if the Trustee discovers during the continued on page 15 14 July / August 2007 REOMAC® updatetm
  • 12. At What Point is a Property Vacant? – continued from page 14 may be vacant and cover such a situation. But the lender should ask their force-placed carrier to be sure. • Second, if insurance has not been force- placed, the lender should review the What’s borrower's insurance policy to see if there is a similar Vacancy Exclusion as in the TRB Investments case. (Commercial policies are probably Up at more likely to have the Vacancy Exclusion than residential policies. But, the lender should check in both instances.) REOMAC ?® • Third, the lender should check its Standard Loss Payee Clause to see if it removes or adds a Vacancy Exclusion. • Fourth, if the combined effect of the policy and the Loss Payee Clause provide for a Vacancy Exclusion, or if the lender cannot tell, the lender should either force-place its own insurance, or, in the case of a remodel, verify that the remodel requires a save the Dates substantial and continuing presence of workers on the premises. July 19, 2007 REOMAC® / united trustees • Fifth, to determine whether a particular Association Joint Meeting remodel meets this standard, the Marriott Hotel lender should consult its in-house or Del Mar, CA outside counsel. August 9, 2007 Dinner Meeting The ultimate lesson to be learned from the Denver, CO TRB decision is that a vacant property or one being remodeled could be uninsured september 20, 2007 Dinner Meeting against certain losses. To protect itself, Waterfront Marriott the lender must familiarize itself with Portland, OR the particular insurance policy and loss payee clause involved in each case. Our October 10-12, 2007 fall 2007 Conference role as counsel is to educate your lender Westin Diplomat Hotel clients on this potential risk as we suspect Hollywood, FL many lenders are unaware that they may be uninsured. December 6, 2007 Dinner Meeting Westin Bonaventure Hotel Los Angeles, CA (Endnotes) 1 TRB Investments v. Fireman’s Fund Ins. April 5-8, 2008 spring 2008 Conference Co., 2006 WL 3257848; 6.06 Cal. Daily Renaissance Esmeralda Op. Serv. 10,461 (Nov. 13, 2006) 145 Indian Wells, CA P.3d 472. T. Robert Finlay, Esq., is a Partner in the 2520 Venture Oaks Way, #150, Sacramento, CA 95833 Newport Beach, California law firm of 916.239.4090 – phone • 916.924.7323 – fax Wright, Finlay Zak, LLP. • REOMAC® updatetm July / August 2007 15
  • 13. Disposing of Bankruptcy Cases under BAPCPA: to strike or Not to strike? By thomas C. frost, Esq. O ne of the requirements of the protections of the automatic stay and, in case docket pursuant to 11 U.S.C. 105(a) Bankruptcy Abuse Prevention her discretion, ordered the case stricken. and struck the bankruptcy case presented and Consumer Protection Act before it. Id. of 2005 (hereinafter “BAPCPA”) is that The Court reasoned that “Section 109(h) debtors must undergo credit counseling provides that an individual may not be a Some have argued that by striking a as a prerequisite to filing for bankruptcy debtor unless credit counseling is obtained bankruptcy case, the Court is allowing the protection. See 11 U.S.C. 109(h) While pre-petition, or the bankruptcy court debtor, in effect, another bite at the apple this seems clear enough, the Courts have grants an extension.” In Re Elmendorf, 345 since this stricken filing will not count as a not uniformly decided what should happen B.R. at 497. Further, the Court determined prior bankruptcy case pending within the to debtors who fail to obtain the requisite that no automatic stay can exist for debtors prior year under an analysis of 11 U.S.C. credit briefing within the 180 days prior who fail to obtain the required credit 362 (c)(3)(4). This analysis is necessary to filing a petition. counseling. when determining whether a limited automatic stay or any stay is in effect as Courts have ruled that a failure to meet The credit counseling requirement was a result of a subsequent filing. There are the credit counseling requirements could enacted presumably with the intention numerous bankruptcy Courts which have result either in the case being dismissed, of allowing “debtors to make informed decided that cases should be dismissed if OR in the alternative, stricken. The choices before filing for bankruptcy.” Id. the credit counseling requirement is not effect of striking a defective bankruptcy at 502. Although many Courts have held satisfied. See In re Seaman, 340 B.R. 698, filing extends far beyond the instant case that ineligibility to be a debtor is a basis 707-09 (Bankr. E.D.N.Y. 2006)(dismissing pending before the Court. It can have a for dismissal of the case, Judge Morris the case for failure to satisfy Section 109(h) significant impact on the rights of both the concluded that: and citing thirty one cases where the Court debtor and their creditors in the event of dismissed the case instead of striking it.); a subsequent bankruptcy filing. “Congress explicitly made failure See also In re Hedquist, 432 B.R. 295, 297 to file certain documents pursuant (8th Cir. BAP 2006)(bankruptcy courts have An important case of note in which the to Section 521(a)(1) and (2) cause no discretion but to dismiss a case when Court argues that the case should be to dismiss; but did not explicitly the debtor does not comply with Section stricken is In re Elmendorf, 345 B.R. 486 include credit counseling certificate 109(h).); In re Ross, 338 B.R. 134 (Bankr. (Bankr. S.D.N.Y. 2006). In this decision, among the enumerated causes.” Id. N.D. Ga. 2006). Judge Cecelia G. Morris ruled that a debtor at 503. who does not satisfy the credit counseling The provisions of BAPCPA providing for requirement is not eligible to be a debtor Thus, in the absence of an explicit direction limited or no protection via the automatic under the Code thus rendering the filing from Congress, the Court held it could act as void ab initio failing to invoke the within its own discretion in managing its continued on page 1 REOMAC® updatetm July / August 2007 17
  • 14. Bankruptcy Cases Under BAPCPA – continued from page 17 stay for repeat or serial bankruptcy filers (See 11 U.S.C. 362 (c)(3 (4)) were enacted to deter the practice of some debtors from utilizing the bankruptcy system as a delay tactic to thwart the collection attempts of creditors. If a case is stricken instead of dismissed, the case will be deemed void ab initio and will not count against the debtor as a past bankruptcy filing. Thus, they will gain additional protections afforded by the automatic stay than if the prior case was dismissed by the Court since the prior case will not be held as a prior mark against the debtor. There has been much case law generated on this issue throughout the country, and even in New York State, the various Bankruptcy Courts are not in agreement on whether striking is the appropriate option. What is clear, however, is that creditors and their attorneys must carefully analyze the manner in which prior cases have been disposed. The distinction between a case being dismissed or stricken makes an enormous difference in the rights of both debtors and creditors and the strategies to be considered to protect each party’s interests in future cases. Thomas C. Frost, Esq. is an attorney with the New York law firm of Rosicki, Rosicki Associates, P.C. 18 July / August 2007 REOMAC® updatetm
  • 15. Northwest Market update Greater seattle-Portland NWMLs (Greater seattle, Washingon) Available Listings Apr ’07 (8,408) Apr ’06 (25,215):  52% Pending Sales Apr ’07 (9,156) Apr ’07 (9,702):  6% Median Sale Price Apr ’07 (28,000) Apr ’06 (299,500):  10% Average Days on Market Apr ’07 (87) Apr ’06 (72):  21% Months of Available Supply Apr ’07 (4 .1) Apr ’06 (2.6):  58% RMLs (Greater Portland, Oregon) By Keith New Listings Apr ’07 (5,541) Brown Apr ’06 (4,429):  25% Pending Sales Apr ’07 (2,998) Apr ’07 (3,321):  8% Median Sale Price Apr ’07 (285,000) Apr ’06 (269,500):  6% Average Days on Market Apr ’07 (58) Apr ’06 (41):  41% Months of Available Supply Apr ’07 (4 .4) By Andrea Apr ’06 (2.4):  83% Johnson t he Seattle and Portland markets of long-term basic economics, median a major challenge in Seattle as our traffic continue to weather the foreclosure sale prices continue to rise at a healthy, problems are already well-known and storm remarkably well heading into if unspectacular 6% clip. But then, with worsening despite a lot of hot air from the the summer. Although both markets all of current weakness throughout the political class about the latest and greatest are beginning to show signs of weakness, country, who needs “spectacular” right “solution”). healthy appreciation rates continue (at now, right? least for now!) Tightening lending requirements will The biggest challenge currently in both continue to have an effect as we are already Seattle: inventory continues to build markets is convincing buyers that the seeing a decline in the number of 80/20 considerably over a year ago, up 52% in Seattle and Portland markets are different ARM offers and a modest resurgence in April, while sales were down 9%. Despite than most of the rest of the U.S. with all FHA financing (almost unheard of locally this trend (that has been building all the breathlessness in the media about for the past several years). Early signs of year thus far), median prices are up 10%. the national housing slowdown. Buyers further weakness have appeared in May as However, this level of appreciation cannot continue to move to the Northwest from the number of new listings continues to continue if inventory continues to rise other parts of the country, some for relative explode while daily price reductions (a sure with sales falling: it simply defies basic affordability and others for lifestyle, not to sign of weakness) are also skyrocketing. economics. Predictably, market time and mention the more modest climate. Should be an interesting summer. months of available supply have also risen sharply compared to this period in 2006. Both Portland and Klamath Falls earned spots in the annual list of top 100 places Keith Brown is Broker/Owner of SeattleREO. Portland: at the risk of sounding like a to live which only attracts more in- com (Brown Real Estate Group) in Seattle, broken record, inventory is also up with migration, provided local services and WA and Andrea Johnson is Broker/Owner sales down, with 25% more new listings infrastructure can be bolstered to support of ReMax Equity Group in Beaverton, but 8% fewer sales. Again, in defiance the additional population (this is currently OR. 20 July / August 2007 REOMAC® updatetm
  • 16. March 1st REOMAC® Dinner Meeting Alternative Marketing strategies (Hollywood, fL) By sponsored By: Coldwell Banker Corporate REO Valencia Division and Walker t he March REOMAC® meeting was mortgage fraud, and their predictions for was to offer the Seller an additional held at the site for the 2007 Fall 2007. Audience participation was included method for the sale of REO properties. Conference – the beach front Westin with participants discussing the changes Normally viewed as a resource for aged Diplomat Resort Spa in Hollywood, in their respective markets. asset disposition, the panelists noted Florida. The pre-dinner workshop “A they are receiving assets earlier in the Florida and Georgia Market Update” was Mike Keracher,; Elsa REO process, many coming as new REO an informative overview of the REO market Louis, Williams Williams; and Louis properties. Louis Amaya discussed the in the Atlanta MSA and Florida. The panel Amaya, National Asset Direct were the advantage and process of disposing of was made up of REO agents: Joe Doher panelists for the dinner meeting on assets via bulk sale. of the Doher, Perry St. Gordon Team, “Alternative Marketing Strategies” which who presided as moderator, Jose Fente was moderated by Jay Baker of Coldwell With the increase in REO properties reported on the Miami area; Bob Roche Banker Corporate REO Division. The anticipated in 2007, alternative methods for who provided a presentation on the Tampa meeting started with all panelists reviewing marketing and disposing of assets will work market, and myself who expounded on alternative methods for disposing of REO in conjunction with the more traditional the Georgia marketplace. Each panelist properties. Mike discussed his on-line methods of sales and marketing. provided a detailed analysis of the market auction process, while Elsa described the in their respective market areas. The on-site and ballroom types of auctions. discussion included the trend in the Although the auctioning methods differed, Valencia Walker is a real estate agent with marketing areas, i.e., the increase in REO the resounding message was the ability Exquisite Realty, LLC located in Decatur, properties, the decrease in the buyer pool, and the need to dispose of the increasing GA the impact of adjustable rate mortgages, number of assets. The common thread Mike Keracher Michael Coen REO Division 225 Rainbow Drive, Suite 248 7100 West Commercial Boulevard Rainbow City, AL 5906 Fort Lauderdale, FL 19 (256) 549-14 (800) 711-1258 (256) 549-1885 - Fax (754) 747-8256 – Fax REOMAC® updatetm July / August 2007 21
  • 17. LEAPFROG – BACK BY POPULAR DEMAND If you missed it last time, you have a golden opportunity to Leap Frog off the agent/broker wait list. The program was a huge success last time and your REOMAC® Board of Directors has brought the program back for a limited time. HOW DO YOU QUALIFY? To be added to the REOMAC® Associate waitlist, you must submit the REOMAC® membership application, a copy of your license, a copy of your business card, and a reference letter from a current REOMAC® lender member; OR two letters from financial institutions in the business of REO disposition. HOW DO YOU LEAP FROG FROM THE WAIT LIST INTO REOMAC® MEMBERSHIP? Refer two new lender members to REOMAC®. When we receive the lender member’s application stating you as the referring broker, you will be ratified at the following Board meeting as a new REOMAC® member. To speed up the process, mail your application with your two new lender members, so you can all be ratified at the same Board meeting. The two lender members will be connected to your membership for two years. As the Associate member, you will be responsible to make sure your lender members renew their membership one time. If they do not renew, you will be responsible for finding another lender to take the non-renewing lender’s place. Please e-mail any questions you may have concerning this limited time promotion to the e- mail address below: ❏ Melissa Piano at ❏ or contact the REOMAC office, (916) 239-4090 ® Don’t miss this great opportunity to become a REOMAC® member! 22 July / August 2007 REOMAC® updatetm
  • 18. REOMAC® updatetm July / August 2007 2
  • 19. WELCOME NEW MEMBERS REgulAR Jennifer Bell T . Franklin Brent MacIntosh Linda Schwinn Wachovia - West Paces Wells Fargo Home Mortgage Countrywide Home Loans AMC Mortgage Services Sara Blicharz Paul Fredinburg Vernon McDaniell Ronald Smith Bank of Stockton Washington Mutual Bank Aegis Mortgage Corporation Fremont Investment Loan Aaron Boneau Evelyn Garth Michael Moore Cary Sternberg Nationstar Mortgage Westerra Credit Union Washington Mutual IndyMac Bank, F.S.B. Stephanie Boykins Becki Gooch Joseph Moschetto Jacqueline Szykowny Wachovia Mortgage Sun Trust Mortgage, Inc. Sun Trust Mortgage, Inc. AMC Mortgage Services Karen Carrillo Mike Grace Richard Ohl Laffaira Taylor First Option Asset Management Services Wells Fargo Home Mortgage California Bank Trust ABN AMRO Mortgage Group Shelly Chapuis Kelly Hinerman Patrick O’Rourke Jacqueline Tuchtenhagen AMC Mortgage Services, Inc. Fannie Mae Bank of Stockton Bank of Stockton Anne Connors Laura Hylton Lee Pederson Penda Tyson Compass Bank AIG United Guaranty Countrywide Home Loans Wachovia Mortgage Will Cousey Trowell Jernigan Ron Penir Jamie Van Parys Novastar Mortgage Wells Fargo Home Mortgage Countrywide Home Loans Countrywide Home Loans Meredith Dinkel Tim Kearney Alyson Popa Colette Vaughn First Option Asset Management Services Countrywide First Option Asset Management Services Washington Mutual Paul Douglas Curt Knowles Pier Price Greg Wayer Select Portfolio Servicing Bank of America Ocwen Federal Bank F.S.B. Countrywide Home Loans Michael Eckhart Nancy Lehmbeck Ann Reff Christopher Woodford Countrywide Home Loans ABN AMRO Mortgage Group HSBC Mortgage Corporation Select Portfolio Servicing Irene Fernandez Ben Lerner Drew Rubic Pacific State Bank Countrywide Home Loans First Option Asset Management Services Jeanette Francis Angela Links Estela Samson Wells Fargo Home Mortgage Homecomings Financial US Bank AFFIlIATE Scott Akerley Ted Disabato Stuart Kessler Tom Pilkington Glen Oak Escrow Bankers and Lenders Title Stuart M. Kessler, PC Spectrum Field Services, Inc. Stephen Andrews Patricia Doll Jeffrey Kosterich Charles Rogers Bleecker, Brodey Andrews First Preston Management Jeffrey A. Kosterich Associates Bleecker, Brodey Andrews Julia Andrews David Duffy Scott Levine Bobby Ryan Bleecker, Brodey Andrews Seattle Specialty Insurance Services SourceMedia Burke Associates Bob Aulgur Steve George Iris McLane Christopher Smalling Whittington Aulgur Field Asset Services, Inc. East Coast Settlement Services Advantage Closing Escrow Company Wendy Catron Ananias Granger O . Dale McPherson David Tiberio Whittington Aulgur A D Property Services, Inc. Field Asset Services, Inc. eAppraiseIT, LLC Bonnie Crabb Annette Hamilton Teresa Miller Joshua Krom Goodman Dean, Inc. Hudson and Marshall of Texas, Inc. Lerner, Sampson Rothfuss Realty Asset Management AssOCIATE – lEAPFROg Gary Lustic Carla Carter Tanya Endicott Alex Saab, Esq . Terra Realty Development CCarter Realty Group, Inc. Dallas Home Team Quantum Realtors Tony Bartos Steve De Vre’ Diane Mahan Debbie Scheitlin Coldwell Banker Previews International Laguna Country Real Estate, Inc. Brady Mahan Real Estate Starck Realtors Dan Brady James Dienes Marili Nielson Zoritha Thompson Brady Mahan Real Estate Today Realty Investments RE/MAX Equity Group, Inc. Goree Thompson Real Estate Barry Britt Gayle Edwards Nelson Reed Ed Watts REO Proformance Systems/Coldwell Banker Watson Realty Corp Colorado 4 Homes Property 1st RMR 24 July / August 2007 REOMAC® updatetm
  • 20. ‘the future is Now’ Was Celebrated through Education, Networking and teambuilding with REOMAC®’s Most successful spring Conference! By Diana Kendall Conference task force Chair t he Welcome Reception opened the danced for hours to the fabulous band. All We would all like to thank Kathy Jeffers- Conference in the Exhibit Hall with participants hailed Kathy Jeffers-Volk and Volk for her work organizing volunteers 34 Exhibitors. This year’s Silent Anngel Benoun for the fabulous auction and the Silent Auction. We also thank Auction opened at the Welcome Reception. items. We are so excited to have already all our volunteers for their help in making Exhibitors, Sponsors and Silent Auction raised a record-breaking amount toward this the best conference ever. I was so donors all received excellent recognition REOMAC®’s 2007 Scholarship Program. honored to work with these people as the for their support. Thank you to Shelley Thank you also to Dee Chillson for her Task Force Chairperson for this years’ Kaye for coordinating the Exhibit Booths help on the Silent Auction. Spring Conference. and Sponsorships. Monday’s programs included a Lenders/ We all thank Joe Doher and the Education Servicers Only Session, Attorney and Title Please contact me if you would like to be Committee for planning an outstanding Agent Only Session, Broker Only Session involved in planning REOMAC®’s Fall program! We gained knowledge on and Outsourcer Only Session. Today’s Conference in Hollywood, Florida: the state of the economy, alternative Technology, Legal Updates, To Repair or Diana Kendall disposition, technology, mergers and Not to Repair, Vendor Management and 714-271-7135 Cell or acquisitions and current trends in the Valuations. Once again, the highlight of industry. the program for Brokers was clearly the Lender REOMAC® President, Mary Best-Brill, Rou ndt able S e s sion s held a special reception in her elegant organized by Connie Presidential Suite for all sponsors and White and Dee Chillson. exhibitors. Without the support each Philip Boroda of Coldwell of the sponsors and exhibitors provide Banker Real Estate in we would not be able to put on such a Los Angeles once again wonderful conference. donated the $5,000 Grand Prize which was awarded Monday Night was our Gala Dinner Dance at the Lender Appreciation with the culmination of the Silent Auction Reception to close the and the competitive Live Auction hosted by Conference. Williams Williams. Members and guests REOMAC® updatetm July / August 2007 25
  • 21. Economic forecast By Ronald s. Speaker: Dr . Lawrence Yun, Managing Director Deutsch, Senior Economist – National Association of Realtors Esq. O n a date in which over 1,200 the great depression. He predicted the strong with Phoenix adding 90,000 new individuals from across the nation worst is over and sales are now stabilizing jobs alone in the past twelve months. He were in attendance, Lawrence Yun, and inventories of unsold homes are believes the current economic situation PhD addressed the audience, providing declining. Some of this stabilization he replicates the 1990s before the large insightful industr y information. A noted is caused by builders reducing increase in pricing occurred. respected industry leader, Dr. Yun has their production. On the other hand he been quoted in the Wall Street Journal, stressed that current economic factors He also suggested that reports of declining the New York Times and the Washington are quite strong. numbers of realtors should also be Post and regularly appears on CNBC and discounted. Many realtors are not active Bloomberg Television. That said, he noted sub prime loan with 15% of California realtors reporting delinquencies have been increasing since zero transactions during the past year. Dr. Yun, stated that real estate is subject 2001 but that the real estate market He also noted the numbers of contract to normal cycles. That the industry was value boom in 2003 caused it to decline purchasers failing to complete closing is in a boom and now, to no one’s surprise, for a period. Prime loan delinquencies stabilizing too and most weaknesses can is currently in a slump. However, his have remained stable but sub-prime be found only in specific localized markets. analysis of the slump and its causes, elicited delinquencies are still increasing, which Although, he stated that a few additional audience surprise. will cause foreclosures to increase. Dr. Yun months of new data needs to be analyzed noted that $500 Billion in adjustable rate to gain certainty. The premise that Dr. Yun advanced was mortgage re-sets will occur in 2007 and market conditions are generally good 2008. As a result, he expects delinquencies Dr. Yun also noted that local condominium but that the media’s negative stories may to increase for six months before again markets in Miami, Las Vegas and areas of partially be the cause of the slump. He declining. However, he noted foreclosures California remain weak. In those markets, noted that negative news makes headlines. are a lagging indicator and the media will further price declines will bring in buyers On October 25, 2006, he relayed that all report increasing foreclosures for at least and create stabilization. Currently, he major networks picked up the report that twelve more months. Foreclosures will stated, that buyers as a result of media home prices had declined for the three also add 5% to unsold inventory of existing stories, are taking a wait approach. This past months. Housing has a major impact homes and serve to continue negative news. is causing sellers to reduce prices, which on the economy with approximately 70% He stated that pain will be limited to those increases affordability. At the same time, of Americans owning homes. As such, who purchased at the top of the market, he notes, income is rising in this country housing can drag the economy and cause or in the last eighteen months. which also helps to increase affordability. GNP to decline. He noted that for the past These factors all portend to a robust 18 months that both sales and construction Analyzing various positive economic housing market returning. Dr. Yun expects employment have been falling. He also factors, Dr. Yun relayed that current after these markets experience price noted that there has been a 1% price interest rates are historically low. Declines declines of 5-7%, buyers will also return decline nationwide, which is the first that have occurred in pricing have caused time real estate prices have fallen since improved affordability. Job markets are continued on page 27 26 July / August 2007 REOMAC® updatetm
  • 22. Economic Forecast – continued from page 26 in numbers. Thereafter, once the media to 2005-2006, he noted there has only have withdrawn from the market. With reports the advent of the buyers return, been a 9% decline which has fueled the respect to the West, he believes properties housing psychology will change, causing negative news. became unaffordable, which drove price even more buyers to return. declines which are continuing. He noted Dr. Yun also examined the existing home that in San Diego 45% of a buyers income Dr. Yun noted that in past real estate supply. He noted that in the late 1970s is required to pay a mortgage. This is cycles, weakness arose after job declines. there was a twelve month supply of existing pricing buyers out of the market. Detroit He contrasted that factor to the current homes for sale. In the late 1980s there was is experiencing population declines and unemployment rates being at historic a nine month supply. In contract there large unemployment rates. A turnaround lows today. The lack of buyers is merely is only a seven month supply of existing in that market may take time. a symptom of media induced psychology. homes today. Yet that statistic is also Citing as evidence of this psychological driving many negative news stories. Over the long term, homebuyers who factor, he noted the rise of interest rates lose confidence and decide to rent, will caused buyers to withdraw in high priced Finally he noted that all real estate is local. cause rents to increase. As rents increase, areas. Since interest rates have declined In order to reach particular conclusions the property values will also eventually again to 5.8%, a rate that is at an almost local market must be studied. He reviewed increase. The children of baby boomers, 45 year low, buyers have not returned. Nevada which experienced a 40% decline in the second largest population group will Fueling this state of fear are pundits such existing home sales. Dr. Yun now believes soon be entering the market which will as Robert Schuler who has predicted a that the situation is currently stabilizing. fuel further demand. High immigration 40% decline in pricing during the next Next he reviewed Florida, which also rates also spur demand. If interest rates decade. He also sited that during the experienced a similar 30% decline. With decline in 2008, demand should return. 1970s and 1980s a 48% decline in existing respect to Florida, he believes increased In short, Dr. Yun is quite optimistic and home sales occurred during a weak period. property values as well as home insurance expects the return of a robust real estate Subsequently in the 1980s and early 1990s, and tax costs are helping to cause declines. market in the near future. existing home sales declined 18% during He also believes that 50% of home sales in weak demand. Contrasting those rates Florida were to international buyers, who REOMAC® updatetm July / August 2007 27
  • 23. Alternatives Rock! Panelists: Cheryl Crawford – Freddie Mac, Annette Hamilton – Hudson Marshall Auctioneers, Mike Keracher – RealtyBid .com, Elsa Lewis – Williams Williams By Gary Moderator: Kathy Jeffers-Volk – Coldwell Banker Corporate REO Division Weglarz t hese days “alternative” most often blighted areas. They also hold home listings on line. This on line service has refers to rock music enjoyed by a ownership seminars and Home Fairs to been extremely effective in marketing somewhat stranger breed. REO itself educate buyers. These procedures save homes of all types. can be considered a strange breed which is neighborhoods and additionally they may constantly changing. The sudden burst of place dislocated families in some of the Annette Hamilton from Hudson and inventory has forced lenders and servicers refurbished housing. This great internal Marshall had several interesting auction to look for alternative methods to dispose policy works well, but what happens to ideas. Music or live entertainment creates of growing inventories. Inventory holding the inventory that doesn’t fit the program a relaxing competitive atmosphere which and market times are increasing so many or are in remote areas? produces the highest and best price for the lenders and servicers are reaching out for assets. They will also do on site auctions efficient methods of marketing properties, Elsa Lewis had the solution! Williams and on-line bidding. A huge 65% of the reducing hold time and generating higher Williams conducts on-site auctions which sales are generated from buyer agents and returns. are successfully completed in front of the the listing brokers stay actively involved home. They also have a successful on-line until closing. The REOMAC® Alternative Disposition auction system for properties valued Panel explored and proficiently discussed under $30,000. Interestingly, they have What are the criteria for a property that is marketing alternatives – auctions discovered a substantial 50% share of the identified as an auction property? Are they in particular. A panel of industry buyers were from out of state. To keep only the “beaters”? Cheryl says you must professionals – Cheryl Crawford (Freddie deals in tact, Williams Williams has look at the neighborhood and try not to Mac), Elsa Lewis (Williams Williams stringent guidelines for the lower priced damage the current values. Freddie knows Auctioneers), Annette Hamilton (Hudson properties. Their seller driven philosophy they will have additional properties in the and Marshall Auctioneers) and Mike has been successful nationwide in assistingsame areas and they need to preserve the Keracher ( was moderated lenders with the disposition of their REO integrity of the community. However, by Kathy Jeffers-Volk. properties. aged properties with long market time are prime candidates. Often, they are not Cheryl Crawford provided data indicating Mike Keracher stated has a “beaters” but they are worn in the MLS…. the huge influx of REO inventory, especially total “on-line” approach. For seven years, the properties are not getting any action. in certain states. The Freddie philosophy Mike has involved the listing broker with The auction procedure is an alternative is to keep neighborhoods in tact by fourteen day auctions that have been an marketing source that enables the seller working business partnerships with the effective means to liquidate homes. The communities; they help rebuild blocks, interaction with the brokers has also provide affordable housing and stabilize allowed to market retail continued on page 2 28 July / August 2007 REOMAC® updatetm
  • 24. Alternatives Rock! – continued from page 2 to preserve the values by securing the rate is high as the buyers are effectively the prime focus of these professional panel highest prices. screened and must bring a substantial members. Their interest in community deposit to bid. preservation, creative ideas and the use According to the panel, lowering prices of high tech marketing has made them has not been an effective tool to preserving It is certain that the increasing national leaders in the alternative marketing values. Price reductions tend to leave inventory is driving prices down and industry. Alternatives rock when it comes money on the table, especially in today’s forcing alternative sales methods to to blending the communities, the REO buyers market. The auction alternative has increase returns and lower market times. industry and the professionals that make produced higher returns and the deal close Current market issues and solutions are it happen! town Hall – Changing Markets, Yesterday, today and tomorrow Panel: Chris McCormick – First American REO Servicing, Danny Harvey – Coldwell Banker, Frank Marshall – Premiere Asset Services By Beatrice Moderator: Bob Norrell – Litton Loan Servicing Davis-Williams W ith an interesting and informative Frank Marshall of Premiere Asset Services, the future by giving us some thoughts to discussion among some of the presented a number of challenges we ponder on the challenges we are facing top leaders in the industry, this are facing in Today’s market along with in “Tomorrow’s” market. What if “the panel brought to the forefront the issues the causes and effects. The recent wave Fed raises rates, unemployment increase, that have Yesterday heavily affected the of subprime defaults has caught the the sub-prime market disappears and oil industry that we Today represent, live and attention of Congress, More than two prices decline? What needs to happen? work in, while looking at what Tomorrow million people are facing foreclosure Eliminate bad press, go back to basic holds. this year, and subprime lenders are filing lending, reduce current interest rates, build bankruptcy. A few of the causes: relaxed buyer confidence, accountability, tighter According to Danny Harvey of Coldwell underwriting guidelines; little to no State and Federal requirements, prosecute Banker Yesterday did us in. Shaky loans, oversight of the vendor; mortgage fraud; fraud perpetrators, and stabilize housing a change in tax laws, Defense cutbacks false appreciation; and interest rates. The pricing. The Servicer’s Core Objectives and the Stock Market Crash were just a effects were increased defaults, including include Quality Customer Care, Increased few of the reasons that closed the SL’s foreclosure REO volume, and increased Loss Mitigation, a change in Foreclosure and affected the market. Interest rates loss severity and scrutiny from Capital Attorney’s focus to act as a Default were at a high of 11.5% in 1986 compared Markets, Investors and Servicers. Resolution Specialist (with an incentive to 6.25% in 2006. The median price for a program), and a best practice to employ home was $92,000 compared to $221,000 We don’t have a crystal ball but Chris the BEST Brokers. in 2006 and the Oil price per barrel was McCormick of First American REO $9.00 compared to $62.00 in 2006. came pretty close and brought us into REOMAC® updatetm July / August 2007 29
  • 25. “SOUTH JERSEY REO” Real Estate Brokerage Management Company Exclusive REO/Foreclosure Service Sales 609-383-9220 GUARANTEED CLIENT SATISFACTION - ASSET MANAGERS WORK MADE EASY OVER 20 YEARS OF “REO” PROFESSIONALISM SUCCESS RESIDENTIAL, COMMERCIAL AND LAND SALES LOSS MITIGATION, MANAGEMENT AND PROPERTY PRESERVATION PROUD MEMBER OF REOMAC® Servicing South Jersey Counties Atlantic, Cape May, Cumberland Salem, Gloucester, Camden Burlington, Ocean ADAM PALMISCIANO Broker/Owner Please visit our website: 0 July / August 2007 REOMAC® updatetm
  • 26. Get Smart Before Your Deal Fails Panelists: James Angus – Premier Asset Services, Aviva Bush – Fidelity National Asset Management Solutions, Eric Williams – Freddie Mac, Ralph Barone – New Jersey Asset Management Realty By Jim Moderator: Ken Blevins – PMH Financial Conway T his session was presented by a while urging the Buyer to read and session concluded with a discussion of how well-rounded and diverse panel understand the Addendum. all facets of the REO Industry can better repre s ent i n g a GSE , L ender, • lastly, the need to discourage the foster an environment in which the actions outsourcer and REO Broker. The panel practice of Buyers attempting to re- and duties of each participant compliments was composed of Ken Blevins (Moderator) negotiate the contract price, terms the actions of the other parties so that a of PMH Financial, James Angus of Premier or repairs from the closing table. problem-free, on-schedule closing results. Asset Services, Aviva Bush of Fidelity The consensus of the panel was that National Asset Management Solutions, The final part of the session was dedicated effective communication between all of Eric Williams of Freddie Mac and Ralph to suggested ways that we, in the industry, the parties, the mutual understanding of Barone of New Jersey Asset Management can do a better job of managing the different Client Policies and Closing Instructions, Realty. challenges that each of our industry implementing realistic time-lines, and segments face in closing REO properties being open to feed-back are all crucial to Specific issues that were addressed and appreciating those challenges. The a successful closing. included: • different title issues that delay closings; • the importance of agents following client closing instructions; • “busting” of contracts because of repurchasing of loans by either M.I. Companies or Servicers; • the value placed on REO Brokers doing follow-up and communicating, throughout the closing process and creating realistic closing time- frames; • the importance of REO Brokers explaining to Buyers that they are buying a Lender-Owned property and how different that process is than purchasing a retail property REOMAC® updatetm July / August 2007 31
  • 27. Super Session A – Technology Panelists: Chris Bowden – HomeSteps, Monica Horan – Aspen Grove, Bradlee Marick – Fidelity National Asset Management Solutions, Inc. By Joel Moderator: Chris Saitta – REOTrans Wilmouth I n a very interesting Super Session, program developed by Freddie Mac to their technology. To be successful today, Moderator Chris Saitta of REOTrans market foreclosed assets while reducing you, or your business must be: managed to squeeze two hours of the negative stigma of these homes. information into just one hour. A non- Within HomeSteps is HomeSteps Connect • Tech savvy stop shot of technology philosophy, – the web based REO workflow system • Quick flexible adapters predictions, directions, and instruction to manage inventory, and Homesteps. • Open to new ways to do business provided all attendees an incredible value com – the public Web site for marketing • Fiscally fit for their time. properties to the public. In addition, BPO • Able to provide the service, Direct is a web-based BPO and appraisal This session led off with opening remarks workflow system. The bottom line reality for business people from Chris Bowden, Vice President of is that your customers will demand you HomeSteps. Mr. Bowden comes from The benefits of implementing this invest in technology. If you believe that an operations background and stated technology has been: your customers are solely depending on that he would never have believed it if your relationships and expertise-you will somebody would have told him five years 1. Productivity Gains in managing the lose business. In the same manner “state ago that he would be playing this role in a growing inventory with fewer people of the art” technology does not guarantee technology session. Freddie Mac will close and deeper analytics. success. In advocating a “ holistic 15,000-20,000 properties in 2007 with an discipline” to customer relationships, he average retail value of $100,000. The top 2. Improved Performance as evidenced stated that “understanding a customer’s five states for sales are (in order) Michigan, by a reduction of 20 days in the needs while building your technology Ohio, Texas, Indiana, and Georgia with timeline for the last two years strategy, will help you avoid losing those Michigan containing 25% of all Freddie customers. Mac foreclosed assets. There are 1800 real 3. Better risk management by creating estate agents in the HomeSteps program a disaster recovery alternative while The top notch panelists for this Super and it will pay out over $100,000,000 in controlling potential fraud. Session included Monica Horan of Aspen commissions in 2007. Grove and Bradlee Marick of Fidelity Mr. Bowden went on to clearly discuss National Asset Management Solutions, He discussed “the incredible benefits his support of investing in technology in Inc. Ms. Horan stated that companies in managing this volume” by building a order to better run any kind of business need to make investing in technology a system as Freddie Mac has done over the by stating “investing in technology is the necessity and specifically user training last five years. The Freddie Mac system right thing to do!” His belief is that, in for the applications purchased. User combines a branding concept within the the very near future, 100% of corporate technology. HomeSteps is a branded sellers will require suppliers to adapt to continued on page 33 32 July / August 2007 REOMAC® updatetm
  • 28. Technology – continued from page 32 training though can’t be a one size fits all proposition. It is critical to recognize that there are different types of learning styles (visual, auditory, and tactile). In order to address these different types there are different training methodologies including classroom, manuals, multimedia, webinars, tutorials, and learning management systems. Most importantly, instruction needs to be available anytime and anywhere. Mr. Marick shared that the question he thinks will become important as servicers hire vendors is “How efficient are you with technology” not “what technology do you use”. He also encouraged attendees to not be afraid to ask for help, look at training dollars as you would any fixed expense, and to regularly learn something new. The session ended with a special bonus round of the most commonly asked questions of different vendors attending the conference. The most common question is how to upload photos? Sean Ryan of Aspen Grove addressed what you need to know about Adobe Acrobat focusing on the difference in the free and pay versions. Michael Harris of described how to print to a pdf file. Report card grading of vendors and whether it really works was offered by James Clark of Default Servicing Technologies, LLC. Walt Schenck of REOTrans compared desktop and laptop computers and the recommended peripherals such as a second monitor, external hard drive and scanner. Also, Mr. Owens of Res-net discussed Internet connection speeds. REOMAC® updatetm July / August 2007 33
  • 29. 34 July / August 2007 REOMAC® updatetm
  • 30. Super Session B – Mergers Acquisitions Panelists: Anthony Golden – Consulting Manager, Clayton Consulting By Services, Gene Berman – Analyst/Servicer Ratings Team, Moody’s Investors Cynthia Service, Mary Abarca – REO Manager/VP, Aurora Loan Services, Mohammad Younus – CEO, Servicing and Default Resolution Corporation A. Nierer, Moderator: Cynthia A. Nierer, Esq. – Partner, Rosicki, Rosicki Associates, P.C Esq. T he REO industry – heck, the entire Having conversations with current/ many others – the mortgage industry mortgage industry – has undergone previous contacts and opening the lines of has, is and continues to change. You monumental changes over the past communication with the new was stressed read about new/pending mergers and year. There has been such movement in to the audience several times. acquisitions everyday – right at a time the mortgage industry that at times it is when foreclosures and REOs are on the hard to keep up: who is buying who; who As the session progressed, REO specific rise across the nation. And through it all is merging with who; who is transferring issues were discussed. Our expert the Rating Agencies are in shops, taking what portfolio (or piece of a portfolio) to panelists provided “real life” situations notes and issuing scores. One thing is who?! Yet, at the end of the day, we all need that they had “lived through” and offered clear –the next year is going to be a very to be on our game. Business continuity suggestions for resolving those challenges interesting time indeed. is key whether we are the investor, lender, which most of us have servicer, outsourcer, attorney, trustee, come face-to-face with: broker, or title agent. Bottom line – “If missing assignments, you’re not riding the wave of change ... defunct lenders, missing you’ll find yourself beneath it.” origination files, powers of attorney. And to top At this year’s Spring Conference I had the session off Moody’s the honor of moderating the “Mergers provided the Rating Acquisitions” session. It was a great Agenc y perspective opportunity to learn more about the – proactivity seemed “behind the scenes” concerns, issues, to be t he best way processes when it comes to dealing with to go. Mapping out Calling All Writers! merger/acquisition/portfolio transfer systems, shops that are The deadline for submitting articles for the rest situations – and how to deal with such appropriately staffed situations no matter which side of the with people who are of this year’s magazines are: transaction you are on. correctly trained, timelines being met September. . . . . . . . . . . . . . . . . . . . .Friday,.August.3 The panelists started us off with a are just some of the November .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. . Friday,.October.5 discussion on how to keep things moving key items that can help during a transition. Whether it was billing, one achieve a positive Issue topics will be announced at a later date. If you collecting on receivables, getting the rating. have topic recommendations or wish to contribute to name of a new contact, getting answers the REOMAC® Update, please contact Kathy Jeffers-Volk on a file/offer, the most important way to As was duly noted in at keep things moving was – communication. this session – and in REOMAC® updatetm July / August 2007 35
  • 31. Super Session C – Valuations Panelists: Kurt Armbrust – MGIC, Bob Norrell – Litton Loan Servicing, L.P., JD Tidwell – Nationstar, Bryce Fendall – Wilshire Financial Credit Corporation By Kevin Moderator: Bill Krueger – Mark to Market Alaimo B ill Krueger of Mark to Market foreclosed the appraisal review department properties to a lendable condition. The moderated the evaluations session compares the drive by appraisal, drive primary repairs are paint and carpet. Mr. with panelist consisting of Bob by BPO, origination appraisal, post Tidwell shared that Nationstar has pulled Norrell of Litton Loan Servicing, JD foreclosure interior BPO and AVM’s to back from rehabbing all of their assets and Tidwell of Nationstar Mortgage and formulate a marketing plan. now attempts to recover $1.25 to $1.50 for Bryce Fendall of Wilshire Financial. each repair dollar spent. These industry professionals shared their There was some comments about the use company’s use of valuation tools, methods of BPO’s in the loss mitigation process. Mr. In some cases properties are not easily of valuing assets and common variances Norell indicated that in a loss mitigation valued. One example given was of a found in valuations. scenario a value from a BPO may be the home that was part of a cavern. Another deciding factor for a borrower to stay in was a potential fraud case where sale Although there are many forms of the home. A comprehensive BPO can also values were high, but there were many valuations, there was a heavy concentration assist with writing down the book balance new listing at significantly lower list by the panel on broker price opinion’s of an asset. prices. The panel sympathized that (BPO’s). It was observed that BPO’s are some assets are challenging to value. In an important part of valuing a property. One tip that Mr. Tidwell had for agents was these cases it is critical that they receive Bob Norell shared that Litton has analyzed to provide as many pictures as possible as in-depth information about the property, their sold portfolio and concluded that it can really assist the reviewer with “the sufficient photos (quantity and quality) the listing agents’ interior BPO values are real picture”. Another suggestion was and descriptions on how the property the closest valuation tool to the final sales using the best available comparables (i.e. was valued against other listings and price overall. use properties similar in size, condition sales. In addition there may be outside and location). If an agent has to use comps information that is critical to provide in Bryce Fendell explained that at Wilshire that are deemed unique, the agent should the BPO such as local lay offs, proximity to the REO process starts by ordering an explain in the report that the area lacked adverse surroundings, or other changes in AVM, which is later compared to an comparable properties and explain why the the marketplace that would help the bank independent BPO. If there are variances provided comparables were used. when analyzing the property. in values then an independent review is done on the reports. Wilshire obtains Mr. Norell explained that it is important to While sales are an important factor in loan approximately 8,000 BPO’s on a monthly know who the buyer is to better understand origination, listings can play an important basis from real estate professionals. the possible value. Some of the questions role in REO. Mr. Fendall explained that to ask as a property evaluator are will the Wilshire puts more weight on competing JD Tidwell expressed that Nationstar new lender require repairs; what is the listings versus prior sales as they are only requests BPO’s from real estate potential return if repairs are performed direct competition. Mr. Tidwell agreed professiona ls for listing purposes. and how long will it take to sell the property. by pointing out that listings can show a Approximately four to six weeks prior Mr. Fendall shared that approximately 72% decline in the market not shown by sales; to a foreclosure sale a drive by appraisal of their properties are sold to end users, and BPO are ordered. Once a property is which is why Wilshire brings most of their continued on page 37 36 July / August 2007 REOMAC® updatetm
  • 32. Valuations – continued from page 36 as well, listings can show appreciation and concluded that in some cases it is better words, include even the smallest of stability when moderately higher than to sell a property below value to prevent details and describe how you came to prior sales. extended days on market and reduce your final conclusion. If there are bumps holding costs. or incomplete thoughts in a BPO, it will Each bank has different guidelines and result in the end-user not having the data listing procedures to follow, but setting Bill Krueger summed up the session by necessary to draw the correct conclusions a proper value initially determines the saying at the end of the day one must and may potentially cause an incorrect overall time in inventory. Bob Norell be able to connect the dots. In other property value. Energized Lender / Outsourcer Sessions T he Lender Roundtables were a great enjoyed doing the Lender/ Outsource success this year at the REOMAC® Roundtables and some participants Spring Conference. have committed to participate at the By Connie next Conference they attend. With the The energy in the room was electrifying influx REOs nationwide Lenders and White with the exchange of information and Outsourcers felt it was important to come collaborative conversations between and speak with their current Business make sure the Roundtable Sessions are Lenders, Outsoucers and Agents. A total Partners and interview new potential a continued success story for all. On of 33 Lenders and Outsourcers accepted Partners. behalf of my Committee and myself I our invitation to participate - an increase would like to take this opportunity to in participation from the REOMAC® The REOMAC® Fall Conference may seem thank all of the attendees that came to Fall 2006 Conference. I’m very pleased far away as we move into the beginning the Lender/Outsourcer Session. It is to inform Agents and Brokers that the of the summer but the Lender/Outsource because of your participation that the Lenders and Outsourcers provided me Roundtable Committee will start planning Lender/Outsourcer Sessions is a success. with great feedback that they really for the Fall Conference next month to See everyone in the Fall! REOMAC® updatetm July / August 2007 37
  • 33. 38 July / August 2007 REOMAC® updatetm
  • 34. Lender-Only Session By Benton Moderator: James Angus – Premiere Asset Services Neese T he Lender Only Session was well one key to the success of this type of agent. Some of the criteria suggested by attended and very informative. program is adequate compensation for the group included: The attendees were open and very the employees involved. interested in providing input for the • Referrals from other lenders and/or group. The moderator, James Angus of Another area of interest and emphasis was outsourcers; Premiere Asset Services, did a very good how to manage the expectations for the • Agents who are realistic in their job of keeping the group focused and on REO department, especially considering assessment of the property; task, which can be very difficult with a the market conditions. What was once a • How technologically advanced their talkative group of this size. seller’s market has now become a buyer’s agency appears; and market bringing down the values and • Does the agency provide continual There was a great deal of discussion that making negotiations with potential buyers training for their agents? centered on the challenges that lenders more of a challenge to attain expected face in today’s environment. Some of numbers. Suggestions were made by The group all agreed that using these the challenges addressed were staffing the group on ways to avoid issues with criteria allows you to select good agents and people issues, growth vs acceptable potential buyers. These suggestions who will work hard and do the best job for turn rates of properties (expectations included: (1) do not advertise properties your company. of department and staff), cash for keys, as “bank owned”; (2) selection of the right property value issues – what are accurate agent; (3) education of agents to the needs Although the session ended on time, the values and what are concerns with of the company; and (4) have a definite discussion continued afterwards outside valuations, repairs, title and foreclosure strategy for disposition of the property, in the hall in smaller groups. Thanks issues, management of agents and vendors, i.e., “As Is vs As Repaired.” should be handed out to the Education technology, municipal restrictions and Committee for providing this session on communication with the closing agents While discussing the selection of the right the agenda with the selection of a great through the closings. After a lengthy agent, several people asked what criteria moderator who allowed for the open discussion about all of the challenges, different ones used to determine the best discussion of very important topics that a great deal of time was allotted for we all face each day. a discussion of how to address these challenges. As in many cases, staffing, their production and satisfaction is a hot topic with departmental management. There was discussion concerning the advantages of having staff working out of their homes or remote offices that are located in the trouble areas. Several of the managers present said they have found that this concept results in happier employees working longer hours, therefore increasing their production. Everyone agreed that REOMAC® updatetm July / August 2007 39
  • 35. Broker-Only Session By Tom Moderator: Joe Doher, Weichert, Realtors Hallmark Properties Moon R EOMAC® Education Committee employers, as one broker was at REOMAC® pm, when commuters were returning Chairman, Joe Doher, divided the while 3 of his other employees were on jury home from work. Some Michigan brokers room with the broker/owners on duty! There may have been 50 brokers in were interested in conducting cash flow one side and the real estate agents on the attendance with over 100 assignments. All seminars to out of state investors, which other, to hear their different perspectives. were in agreement to not broadcast this, so some Florida brokers did in 2004-2006, REOMAC® Board member Tom Moon their Asset Managers would not feel their when the Florida market was hot. Other handled the roving microphone and brokers were too overloaded. agents were placing riders with prices on contributed to the discussion. One their For Sale signs. predominant item we all agreed upon was Most employees are on salary, but most like it or not, we are all property managers! buyers’ agents are paid by a commission, The BPO assignments were either seen as We are all also required to fund initial when they convert a buyer lead in to a sale. a necessary evil, or an income producing property preservation items and utility These buyer’s agents are given free leads avenue that paid the staff. One BPO bills, often in the thousands of dollars, or asked to accept up to a 50/50 split for producer was making $17,000 monthly, while waiting for reimbursement. the referral. Other employers give a new but that also required many 2:00 am work listing to other office agents, when they ending days. Many brokers hired college For those working with multiple lenders, sell another REO listing, while some students as Independent Contractors. servicers, and outsourcers it was suggested employees are offered 35-50% of listing These flexible hours fit well with their that we may need another database just to sales commissions, if they perform the school schedules. keep track of all of the passwords! It was weekly drive by requirements. also imperative to abide by each client’s A few enterprising agents accepted every procedures. With many Asset Managers The individual agents with 50 or more files listing. If they were out of area, they found handling 200 files, they don’t have the have an Accounts Payable person on staff. an agent there and split the commission time to remind us of our daily tasks. We It’s a full time job paying all of the vendors. 50/50. Some brokers were uncomfortable all need to be technologically advanced If the reimbursements are not followed up with this, as they felt a broker working and website trained, or our services will on in a timely manner, this can become a for 50% of a commission may not be as no longer be needed. cash flow challenge for any company. The diligent as an agent working for 100% of attendees also didn’t think much of the a commission. As with all relationships, The standing room only audience of several outsourcers who charge as a fee, for the if an Asset Manager has the trust in their hundred agents was most interested in how privilege of spending our money, to pay referring broker, to be accountable for all each other ran their business. Most agreed the bills on their properties. these out of area properties, then that may that to grow your business meant having be the bottom line. to hire and train competent employees. Some of the innovative marketing ideas Cross training was the philosophy of most were to have agents sit Open Houses 5-7 continued on page 41 40 July / August 2007 REOMAC® updatetm
  • 36. Broker-Only Session – continued from page 40 Since the attendees would rather be on vacation instead of managing a staff and sitting in front of a computer, the predominant curiosity was how much staff and expenditures we were incurring per property. Due to the large discrepancies in housing value, it was difficult to place a dollar amount on this. There were discussions of how one broker had a staff of nine for 100 assignments, while another broker had a staff of eight for 250 assignments! The difference seemed to be how technologically advanced an office was and how disciplined they were to use the systems in place. Almost all attendees wanted to know what software each other was using. The session ended too quickly, as the attendees were openly sharing their trials and tribulations. Like the Lenders Only sessions, this Brokers session could easily be a welcome two hour session in the future. REOMAC® updatetm July / August 2007 41
  • 37. 2007 Education Committee By Joe Doher Education Chair I just wanted to take this opportunity their great leadership and foresight they to thank the following members of provided to the Education Committee the 2007 Education Committee for during the planning process of the Spring devoting their time and efforts in the Conference. Their involvement was critical planning and executing of the Spring in the success of the Spring Conference. Conference sessions: The Education Committee and I take Kevin Alaimo Fred Law this opportunity to thank the many James Angus Elsa Lewis leader/servicers, panelists, moderators Michelle Begni John Marratt and participants that not only took time Jeb Blasingame Tom Moon out of their busy schedules to attend the Aviva Bush John Murray conference but also shared their knowledge Ivan Choi Benton Neese and expertise during the sessions. All Ron Deutsch Cynthia Nierer these panel participants were volunteers Jeanette Fitzgerald Rita Nilon and did so at their own expense. Some Jeffrey Fischer Donna Sanfilippo of the leaders in our industry also took Bill Flagg Chris Siatta leadership roles in the sessions and did Monica Horan Erin Stallmer an excellent job in the planning and Joe Iuliucci Valencia Walker executing of their sessions. They were Bill Kreuger Joel Wilmoth the key ingredients to the success of the Educational Sessions. We look forward to Thanks also to our 2007 REOMAC Board their involvement in future conferences Liaisons Sara Waite and Mia Semo for and dinner meetings. Look for the Spring Golf wrap-up in our September Update 42 July / August 2007 REOMAC® updatetm
  • 38. Once Again ... Volunteers Make It Happen By Kathy Jeffers-Volk Volunteer Coordinator T his title is something I can use every your conference time to assist those of us YOU ARE THE BEST!!!!!!!!!! Thanks to all conference. The response to a call for running around trying to get everything of you listed below. If I have left anyone’s Volunteers was overwhelming ... I am done ... it just would not happen. You make name out, I apologize. Thank you for all always amazed at how willing people are to the tasks go by quickly and instill fun and that you do! “pitch in.” Without each of you who take humor into the jobs. TRULY TRULY ... Kelly Adams Dee Chillson Larry Hahn Brian Liggan Lorene Pregenzer Elaine Alfiero Marie Chung Jodi Hembree Lee Ann Marks Jackie Quig Sue Barone Gladwin D’Costa Debra Holm Iris McClain Faith Roselle JoAnne Bruner Patty Edney Matt Huffine Vida Monify Anthony Santillo Pam Butler Gerry Galster Neil Kaye Benton Neese Ryan Smith Peggy Castelli Lourdes Garrison Fred Law Dixie Persons Valencia Walker And a special thanks to my conference reporters: Kevin Alaimo Jim Conway Beatrice Davis-Williams Ron Deutsch Tom Moon Benton Neese Cynthia Nierer Gary Weglarz Joel Wilmoth Tom Oldefendt got engaged at conference; here he is with his fiancé. REOMAC® updatetm July / August 2007 43
  • 39. REOMAC® SETS RECORD FOR SCHOLARSHIP FUND LIVE AUCTION ITEM DONORS David Norberte, Action Real Estate Network Joyce Essex and Danny Harvey, Coldwell Banker Bertha Pyne, Selective Homes, Inc. Katie Taylor, Triad Properties Susan Hill, Susan Hill REO Services Dave Guzzetta, American Way Real Estate Nick Petrocelli, Nationwide REO Brokers Jim Conway, Remax Joliet Michael Webb, Remax Premier Group Gerry Galster, Exit Executive R. E. Mark Braddock, Executive Asset Management Eric Kapnick, Fein, Such, Kahn Shepard Mike Hermes, Bradfield Property Rita Nilon, ETCREO Management Ron Hacker of Ron Hacker Real Estate Anngel Benoun, Dilbeck GMAC Realtors SILENT AUCTION DONORS Gary Weglarz, Applebrook Realty Marie Chung, Modern Realty Co. Mia Semo, GMAC-RFC Diana Kendall, Seven Gables Real Estate Dee Chillson Sid Manning, Coldwell Banker Juliet Hardy, White House Properties Thanks to your generosity, we will be able to award a record- Mary Berry, Century 21 All Pro Realty breaking number of scholarships this year! Conference Attendees Won Numerous Door Prizes Thanks to the Generosity of the Following: Gary Tatar, Millenia Recovery Group, Inc. Marc Oppenheimer, Remax Greater Atlanta David Norberte, Action Real Estate Network Joyce Essex and Danny Harvey, Coldwell Banker Beverly Hills Janaya Carter, Routh Crabtree Olsen, PS Tom Oldefendt, National Default Servicing Eric Kapnick, Fein, Such, Kahn Shepard Bryan Lindsay, Bryan Lindsay, PC Moren Adenubi, ERA Crown Realty 44 July / August 2007 REOMAC® updatetm
  • 40. Kudos to the REOMAC® Conference Sponsors for their support! REOMAC® updatetm July / August 2007 45
  • 41. Kudos to the REOMAC® Conference Sponsors for their support! 46 July / August 2007 REOMAC® updatetm
  • 42. Kudos to the REOMAC® Conference Sponsors for their support! REOMAC® updatetm July / August 2007 47
  • 43. Kudos to the REOMAC® Conference Sponsors for their support! 48 July / August 2007 REOMAC® updatetm
  • 44. Kudos to the REOMAC® Conference Sponsors For Their Support! Gladwin D’Costa Philip Boroda Thank You to the REOMAC® Event Sponsors For Their Support! Sunday Welcome Reception Sunday Welcome Reception Sunday Welcome Reception – Roman Tarnawsky REOMAC® updatetm July / August 2007 49
  • 45. Thank You to the REOMAC® Event Sponsors For Their Support! Sunday Welcome Reception Monday Welcome Breakfast Monday Welcome Breakfast Monday Water Bottles Monday Morning Break Monday Morning Break Mark Hass Monday Morning Break Monday Luncheon Monday Luncheon REMAX Greater Atlanta – Marc Oppenheimer Asset Financial Network – Benny Nassiri Monday Luncheon Monday Afternoon Break Monday Afternoon Break Goldtree Realty – Ira Mizell 50 July / August 2007 REOMAC® updatetm
  • 46. Thank You to the REOMAC® Event Sponsors For Their Support! Monday Afternoon Break Monday Dinner Entertainment Monday Dinner Entertainment Rosicki, Rosicki Associates, P.C. Mid State Realty – Shannon Martin Monday Dinner Service Monday Dinner Service Monday Dinner Service Gold Advantage – Bill Lublin – John Murray Monday Dinner Service Monday Dinner Service Monday Dinner Service Equity Ventures Realty – Carole O’Neill Monday Dinner Service Tuesday Breakfast Tuesday Breakfast All Pro Realty – Mary Berry Gundaker – Paul Morad REOMAC® updatetm July / August 2007 51
  • 47. Thank You to the REOMAC® Event Sponsors For Their Support! Tuesday Morning Break Tuesday Morning Break Tuesday Morning Break R. Ann Ellis-Hall Tuesday Luncheon Tuesday Water Bottles We Salute Our Spring Conference Exhibitors For Their Support! We hope you met these exhibitors and will be supportive of them. AreaWide Quantum Realtors Aspen Grove Realty Bid Asset Valuation Marketing Realty Trac, Inc. Austin Brokers Mike Ayoub – Re/max Team 2000 – REO Chicago Title of Colorado/Ohio REO Connection CrestREO REONetwork/Clear Capital Cyprexx Services REOMAC Association Booth First American REO Maestro FIS Loan Portfolio Solutions RES.Net Goodman Dean, Inc. REOTrans Great Street Properties Safeguard Properties Island Advantage Realty Stearns Asset Keller Williams Titanium Solutions Keystone Asset Tranzon Asset Strategies Millenia Recovery Unifund Nordhagen Daughters Vacant Property Security, Inc. Nu-Set Lock Vail REO Realty If you are interested in exhibiting at the Fall, 2007 Conference, please contact Shelley Kaye: 52 July / August 2007 REOMAC® updatetm
  • 48. President’s Thank You ... W ith time such a precious commodity to all of us in today’s individual hours and days spent on organizing an event of this market, I would like to thank the tireless contributions magnitude. I know that they are not looking for any recognition of the Education Committee and the Conference or pats on the back for all that they do for REOMAC® because Committee. I honestly lost count of how many hours were spent they love what they do, but without these teams to assemble this by the Committees collectively and cannot begin to count the conference, there would be no point in our meeting: Education Committee Jeanette Fitzgerald Cynthia Nierer Conference Committee Bill Flagg Rita Nilon Joe Doher – Chair Monica Horan Donna Sanfilippo Diana Kendall– Chair Kevin Alaimo Joe Iuliucci Chris Siatta Anngel Benoun James Angus Bill Kreuger Erin Stallmer Kathy Jeffers-Volk Michelle Begni Fred Law Valencia Walker Shelley Kaye Jeb Blasingame Elsa Lewis Joel Wilmoth Donna LaPorte Aviva Bush John Marratt Julie Randall Ivan Choi Tom Moon Bob Siegmeth Ron Deutsch John Murray Connie White Jeffrey Fischer Benton Neese Thank You Golf Sponsors! Look for their acknowledgements in our September Update REOMAC® updatetm July / August 2007 53
  • 49. BuyBankHomes Default Industry April May 2007 By Bradlee Marick % Change in Bankruptcies, Pre-Foreclosure % Change in Bankruptcies, Pre-Foreclosure and REO Properties for 4/1/07 – 4/30/07 and REO Properties for 5/1/07 – 5/31/07 STATES WITH AN INCREASE STATES WITH AN INCREASE State Begin Inv End Inv % Change New Inventory State Begin Inv End Inv % Change New Inventory GU 0 1 100.00% 1 GU 1 6 500.00% 5 ME 219 260 18.72% 81 ME 260 303 16.54% 70 VT 261 285 9.20% 47 MT 789 802 1.65% 216 VI 1 3 200.00% 2 VI 3 5 66.67% 2 WI 8,861 9,418 6.29% 2,347 STATES WITH A DECREASE STATES WITH A DECREASE State Begin Inv End Inv % Change New Inventory State Begin Inv End Inv % Change New Inventory AL 14,139 10,534 25.50% 1,001 AL 15,220 14,139 7.10% 1,914 AK 508 446 12.20% 118 AK 567 508 10.41% 152 AZ 13,169 12,608 4.26% 3,841 AZ 16,287 13,169 19.14% 5,093 AR 7,228 5,360 25.84% 873 AR 8,468 7,228 14.64% 1,327 CA 91,463 90,340 1.23% 26,308 CA 103,606 91,466 11.72% 36,628 CO 19,612 17,177 12.42% 3,669 CO 22,648 19,612 13.41% 5,506 CT 8,341 8,145 2.35% 1,610 CT 11,766 8,341 29.11% 2,027 DE 1,057 697 34.06% 98 DE 1,227 1,058 13.77% 147 DC 225 202 10.22% 40 FL 65,859 59,218 10.08% 15,478 FL 59,218 55,749 5.86% 12,164 GA 34,584 31,190 9.81% 4,464 GA 31,190 24,991 19.87% 3,020 HI 335 329 1.79% 75 HI 329 296 10.03% 91 ID 2,650 2,349 11.36% 681 ID 2,349 2,226 5.24% 544 IL 63,214 62,924 0.46% 13,552 IL 62,924 58,602 6.87% 8,560 IN 15,025 14,566 3.05% 2,696 IN 14,566 11,716 19.57% 1,991 IA 2,063 2,040 1.11% 565 IA 2,040 1,907 6.52% 396 KS 3,593 3,590 0.08% 670 KS 3,590 2,862 20.28% 389 KY 9,485 8,371 11.74% 1,657 KY 8,371 6,496 22.40% 1,073 LA 8,341 7,758 6.99% 1,058 LA 7,757 6,148 20.74% 680 MD 7,741 6,894 10.94% 664 MD 6,894 5,160 25.15% 596 MA 18,581 12,954 30.28% 3,719 MA 12,954 12,310 4.97% 2,659 MI 26,502 24,705 6.78% 4,831 MI 24,705 20,435 17.28% 3,333 MN 6,138 5,804 5.44% 1,192 MN 5,804 4,668 19.57% 927 MS 5,761 5,431 5.73% 886 MS 5,431 4,645 14.47% 579 MO 11,535 10,771 6.62% 1,848 MO 10,771 8,146 24.37% 1,300 MT 906 789 12.91% 201 NE 3,334 2,674 19.80% 448 NE 3,936 3,334 15.29% 711 NV 12,107 12,080 0.22% 3,847 NV 13,025 12,107 7.05% 4,907 NH 1,089 878 19.38% 133 NH 1,167 1,089 6.68% 225 NJ 11,069 9,186 17.01% 1,748 NJ 12,050 11,068 8.15% 1,417 NM 2,782 2,029 27.07% 388 NM 3,187 2,782 12.71% 579 NY 25,951 21,349 17.73% 3,375 NY 32,088 25,951 19.13% 5,031 NC 13,558 10,156 25.09% 1,267 NC 14,992 13,558 9.57% 1,756 ND 245 185 24.49% 37 ND 247 245 0.81% 61 OH 32,100 25,013 22.08% 4,056 OH 34,943 32,100 8.14% 5,268 OK 7,538 5,964 20.88% 797 OK 8,624 7,538 12.59% 1,403 OR 7,130 5,935 16.76% 1,147 OR 8,279 7,130 13.88% 1,946 PA 21,143 16,307 22.87% 2,151 PA 22,214 21,144 4.82% 3,679 PR 503 399 20.68% 45 PR 828 503 39.25% 60 RI 751 710 5.46% 117 RI 844 751 11.02% 117 SC 5,466 4,008 26.67% 421 SC 6,057 5,466 9.76% 656 SD 204 135 33.82% 19 SD 222 204 8.11% 34 TN 22,675 18,242 19.55% 2,270 TN 24,967 22,675 9.18% 2,758 TX 38,309 27,029 29.44% 6,116 TX 51,960 38,309 26.27% 7,800 UT 6,276 5,026 19.92% 731 UT 10,625 6,276 40.93% 1,682 VT 285 195 31.58% 31 VA 10,127 9,375 7.43% 1,436 VA 9,375 7,408 20.98% 1,027 WA 14,629 10,915 25.39% 3,231 WA 10,915 9,022 17.34% 1,967 WV 1,974 1,720 12.87% 300 WV 1,720 1,058 38.49% 182 WY 131 125 4.58% 12 WI 9,418 8,495 9.80% 1,188 WY 125 88 29.60% 15 STATES WITH NO CHANGE State Begin Inv End Inv New Inventory STATES WITH NO CHANGE DC 225 225 52 N/A 54 July / August 2007 REOMAC® updatetm
  • 50. % Change in Bankruptcies Properties % Change in Bankruptcies Properties for 4/1/07 – 4/30/07 for 5/1/07 – 5/31/07 STATES WITH AN INCREASE STATES WITH AN INCREASE State Begin Inv End Inv % Change New Inventory State Begin Inv End Inv % Change New Inventory GU 0 1 100.00% 1 GU 1 6 500.00% 5 ME 143 189 32.17% 75 ME 189 231 22.22% 58 ND 232 234 0.86% 60 VI 2 4 100.00% 2 VT 257 281 9.34% 47 VI 0 2 100.00% 2 STATES WITH A DECREASE WI 5,226 5,535 5.91% 1,337 State Begin Inv End Inv % Change New Inventory STATES WITH A DECREASE AL 13,798 10,166 26.32% 907 State Begin Inv End Inv % Change New Inventory AK 201 135 32.84% 26 AZ 3,028 2,245 25.86% 402 AL 14,887 13,798 7.32% 1,790 AR 6,329 4,588 27.51% 558 AK 209 201 3.83% 35 CA 23,779 17,919 24.64% 3,022 AZ 3,744 3,028 19.12% 501 CO 6,266 3,892 37.89% 718 AR 7,288 6,329 13.16% 844 CT 1,680 1,505 10.42% 295 CA 27,452 23,779 13.38% 4,264 DE 1,009 653 35.28% 91 CO 7,392 6,266 15.23% 992 DC 204 171 16.18% 27 CT 2,033 1,680 17.36% 299 FL 18,053 13,090 27.49% 2,252 DE 1,182 1,009 14.64% 128 GA 29,379 23,030 21.61% 2,526 DC 206 204 0.97% 45 HI 236 181 23.31% 32 FL 21,000 18,053 14.03% 2,713 ID 978 753 23.01% 133 GA 31,711 29,379 7.35% 4,080 IL 22,385 17,389 22.32% 2,754 HI 265 236 10.94% 34 IN 13,078 10,242 21.69% 1,624 ID 1,161 978 15.76% 209 IA 1,731 1,603 7.39% 334 IL 22,759 22,385 1.64% 4,498 KS 3,331 2,599 21.98% 328 IN 13,418 13,078 2.53% 2,348 KY 7,513 5,667 24.57% 804 IA 1,733 1,731 0.12% 494 LA 7,523 5,916 21.36% 618 KY 7,887 7,513 4.74% 1,322 MD 6,657 4,871 26.83% 490 LA 8,044 7,523 6.48% 990 MA 4,753 4,062 14.54% 651 MD 7,512 6,657 11.38% 568 MI 21,137 16,657 21.20% 2,226 MA 5,134 4,753 7.42% 807 MN 4,860 3,776 22.30% 689 MI 22,781 21,137 7.22% 3,682 MS 5,170 4,343 16.00% 489 MN 5,231 4,860 7.09% 889 MO 9,634 6,986 27.49% 980 MS 5,473 5,170 5.54% 815 MT 362 303 16.30% 70 MO 10,348 9,634 6.90% 1,469 NE 2,288 1,760 23.08% 215 MT 415 362 12.77% 65 NV 3,451 2,758 20.08% 466 NE 2,439 2,288 6.19% 355 NH 1,008 793 21.33% 113 NV 3,745 3,451 7.85% 574 NJ 9,047 6,514 28.00% 967 NH 1,086 1,008 7.18% 201 NM 1,417 648 54.27% 103 NJ 9,996 9,047 9.49% 1,144 NY 17,382 12,486 28.17% 1,964 NM 1,638 1,417 13.49% 194 NC 12,888 9,407 27.01% 1,040 NY 19,410 17,382 10.45% 2,988 ND 234 178 23.93% 34 NC 14,199 12,888 9.23% 1,546 OH 29,253 22,023 24.72% 3,398 OH 32,021 29,253 8.64% 4,699 OK 4,296 2,853 33.59% 364 OK 5,096 4,296 15.70% 669 OR 3,515 2,309 34.31% 365 OR 4,273 3,515 17.74% 445 PA 17,935 12,850 28.35% 1,709 PA 19,742 17,935 9.15% 2,546 PR 486 381 21.60% 44 PR 811 486 40.07% 59 RI 618 563 8.90% 87 RI 719 618 14.05% 87 SC 5,000 3,553 28.94% 310 SC 5,576 5,000 10.33% 524 SD 176 112 36.36% 15 SD 185 176 4.86% 27 TN 21,947 17,429 20.59% 2,033 TN 24,207 21,947 9.34% 2,545 TX 30,833 21,166 31.35% 2,174 TX 34,908 30,833 11.67% 3,292 UT 3,174 2,198 30.75% 270 UT 3,738 3,174 15.09% 378 VT 281 189 32.74% 29 VA 9,538 8,771 8.04% 1,251 VA 8,771 6,717 23.42% 849 WA 7,224 6,054 16.20% 845 WA 6,054 4,176 31.02% 578 WV 1,890 1,637 13.39% 282 WV 1,637 975 40.44% 164 WY 125 119 4.80% 9 WI 5,535 4,565 17.52% 680 WY 119 79 33.61% 9 STATES WITH NO CHANGE State Begin Inv End Inv New Inventory STATES WITH NO CHANGE KS 3,331 3,331 593 N/A REOMAC® updatetm July / August 2007 55
  • 51. BuyBankHomes Default Industry (continued) April May 2007 % Change in Pre-Foreclosure Properties % Change in Pre-Foreclosure Properties for 4/1/07 – 4/30/07 for 5/1/07 – 5/31/07 STATES WITH AN INCREASE STATES WITH AN INCREASE State Begin Inv End Inv % Change New Inventory State Begin Inv End Inv % Change New Inventory DE 31 33 6.45% 13 AL 11 35 218.18% 27 HI 65 88 35.38% 41 AK 294 299 1.70% 91 IL 39,524 39,559 0.09% 8,817 AZ 9,796 9,971 1.79% 3,356 MN 245 248 1.22% 147 CA 64,394 68,591 6.52% 22,301 PA 1,887 2,578 36.62% 960 FL 40,275 41,562 3.20% 9,620 WI 3,372 3,610 7.06% 926 GA 149 161 8.05% 124 HI 88 111 26.14% 57 STATES WITH A DECREASE ID 1,344 1,444 7.44% 405 IL 39,559 40,211 1.65% 5,588 State Begin Inv End Inv % Change New Inventory IN 364 387 6.32% 110 AL 59 11 81.36% 9 IA 95 97 2.11% 19 AK 347 294 15.27% 110 KS 28 36 28.57% 21 AZ 12,257 9,796 20.08% 4,492 MD 39 42 7.69% 32 AR 1,061 757 28.65% 443 MI 829 901 8.69% 600 CA 73,533 64,397 12.42% 31,395 MS 18 37 105.56% 30 CO 14,203 12,255 13.72% 4,225 MT 415 482 16.14% 141 CT 9,590 6,526 31.95% 1,700 NV 8,280 8,905 7.55% 3,274 FL 44,102 40,275 8.68% 12,505 NJ 1,807 2,421 33.98% 713 GA 1,280 149 88.36% 22 NM 1,307 1,322 1.15% 272 ID 1,464 1,344 8.20% 464 NY 8,121 8,410 3.56% 1,309 IN 515 364 29.32% 62 NC 94 129 37.23% 71 IA 105 95 9.52% 20 OH 831 869 4.57% 194 KS 45 28 37.78% 11 OR 3,570 3,574 0.11% 766 KY 1,353 611 54.84% 276 PA 2,578 2,825 9.58% 314 LA 188 119 36.70% 36 RI 1 5 400.00% 4 ME 28 26 7.14% 3 SD 2 3 50.00% 0 MD 63 39 38.10% 35 TN 46 69 50.00% 44 MA 12,931 7,614 41.12% 2,763 VA 42 65 54.76% 47 MI 944 829 12.18% 605 WV 2 8 300.00% 7 MS 52 18 65.38% 10 WI 3,610 3,637 0.75% 435 MO 268 207 22.76% 153 WY 1 4 300.00% 4 MT 478 415 13.18% 130 NE 1,365 898 34.21% 312 STATES WITH A DECREASE NV 8,938 8,280 7.36% 4,247 State Begin Inv End Inv % Change New Inventory NH 3 2 33.33% 2 NJ 1,846 1,806 2.17% 223 AR 757 623 17.70% 278 NM 1,491 1,307 12.34% 369 CO 12,255 12,202 0.43% 2,685 NY 12,262 8,121 33.77% 1,930 CT 6,526 6,480 0.70% 1,267 NC 199 94 52.76% 46 DE 32 27 15.63% 3 ND 10 7 30.00% 1 KY 611 592 3.11% 219 OH 945 831 12.06% 144 MA 7,614 7,587 0.35% 1,866 OK 3,290 2,993 9.03% 672 MN 248 180 27.42% 100 OR 3,965 3,570 9.96% 1,488 MO 207 184 11.11% 114 PR 8 7 12.50% 0 NE 898 794 11.58% 212 RI 4 1 75.00% 1 ND 7 4 42.86% 2 SC 156 150 3.85% 45 OK 2,993 2,871 4.08% 381 SD 6 2 66.67% 1 PR 7 6 14.29% 0 TN 128 46 64.06% 29 SC 150 141 6.00% 35 TX 14,842 5,284 64.40% 4,020 TX 5,284 3,694 30.09% 3,453 UT 6,848 3,064 55.26% 1,289 UT 3,064 2,786 9.07% 453 VA 116 42 63.79% 36 WA 4,747 4,728 0.40% 1,355 WA 7,299 4,747 34.96% 2,358 WV 6 2 66.67% 2 STATES WITH NO CHANGE STATES WITH NO CHANGE State Begin Inv End Inv New Inventory DC 3 3 3 State Begin Inv End Inv New Inventory GU 0 0 0 DC 3 3 2 LA 118 118 30 GU 0 0 0 ME 26 26 3 VT 0 0 0 NH 2 2 2 VI 0 0 0 VT 0 0 0 WY 1 1 1 VI 0 0 0 56 July / August 2007 REOMAC® updatetm
  • 52. % Change in REO Properties % Change in REO Properties for 4/1/07 – 4/30/07 for 5/1/07 – 5/31/07 STATES WITH AN INCREASE STATES WITH AN INCREASE State Begin Inv End Inv % Change New Inventory State Begin Inv End Inv % Change New Inventory AL 274 330 20.44% 115 AL 330 333 0.91% 67 AK 11 13 18.18% 7 AZ 345 392 13.62% 83 AZ 286 345 20.63% 100 AR 142 149 4.93% 37 AR 119 142 19.33% 40 CA 3,290 3,830 16.41% 985 CA 2,621 3,290 25.52% 969 CT 135 160 18.52% 48 CO 1,053 1,091 3.61% 289 DE 16 17 6.25% 4 DE 14 16 14.29% 6 DC 18 28 55.56% 10 DC 16 18 12.50% 5 FL 890 1,097 23.26% 292 FL 757 890 17.57% 260 GA 1,662 1,800 8.30% 370 GA 1,593 1,662 4.33% 362 ID 27 29 7.41% 6 ID 25 27 8.00% 8 IL 980 1,002 2.24% 218 IL 931 980 5.26% 237 ME 45 46 2.22% 9 IN 1,092 1,124 2.93% 286 MD 198 247 24.75% 74 KS 217 231 6.45% 66 MA 587 661 12.61% 142 KY 245 247 0.82% 59 MI 2,739 2,877 5.04% 507 LA 109 116 6.42% 32 MN 696 712 2.30% 138 MD 166 198 19.28% 61 MS 243 265 9.05% 60 MA 516 587 13.76% 149 MO 930 976 4.95% 206 MN 662 696 5.14% 156 MT 12 17 41.67% 5 MS 236 243 2.97% 61 NV 376 417 10.90% 107 MO 919 930 1.20% 226 NH 79 83 5.06% 18 NE 132 148 12.12% 44 NJ 215 251 16.74% 68 NV 342 376 9.94% 86 NM 58 59 1.72% 13 NH 78 79 1.28% 22 NY 448 453 1.12% 102 NJ 208 215 3.37% 50 NC 576 620 7.64% 156 NY 416 448 7.69% 113 OH 2,016 2,121 5.21% 464 OH 1,977 2,016 1.97% 425 OR 45 52 15.56% 16 OK 238 249 4.62% 62 PA 630 632 0.32% 128 OR 41 45 9.76% 13 PR 10 12 20.00% 1 PA 585 631 7.86% 173 RI 132 142 7.58% 26 PR 9 10 11.11% 1 TN 682 744 9.09% 193 RI 121 132 9.09% 29 UT 38 42 10.53% 8 TN 632 682 7.91% 184 VT 4 6 50.00% 2 VA 473 562 18.82% 149 VA 562 626 11.39% 131 WA 106 114 7.55% 28 WA 114 118 3.51% 34 WV 78 81 3.85% 16 WI 273 293 7.33% 73 WI 263 273 3.80% 84 STATES WITH A DECREASE STATES WITH A DECREASE State Begin Inv End Inv % Change New Inventory State Begin Inv End Inv % Change New Inventory AK 13 12 7.69% 1 CT 143 135 5.59% 28 CO 1,091 1,083 0.73% 266 IA 225 214 4.89% 51 HI 5 4 20.00% 2 ME 48 45 6.25% 3 IN 1,124 1,087 3.29% 257 MI 2,777 2,739 1.37% 544 IA 214 207 3.27% 43 MT 13 12 7.69% 6 KS 231 227 1.73% 40 NC 594 576 3.03% 164 KY 247 237 4.05% 50 ND 5 4 20.00% 0 LA 116 114 1.72% 32 SC 325 316 2.77% 87 NE 148 120 18.92% 21 SD 31 26 16.13% 6 ND 4 3 25.00% 1 TX 2,210 2,192 0.81% 488 OK 249 240 3.61% 52 UT 39 38 2.56% 15 SC 316 314 0.63% 76 SD 26 20 23.08% 4 STATES WITH NO CHANGE TX 2,192 2,169 1.05% 489 WV 81 75 7.41% 11 State Begin Inv End Inv New Inventory GU 0 0 0 STATES WITH NO CHANGE HI 5 5 0 State Begin Inv End Inv New Inventory NM 58 58 16 VT 4 4 0 GU 0 0 0 VI 1 1 0 VI 1 1 0 WY 5 5 2 WY 5 5 2 REOMAC® updatetm July / August 2007 57
  • 53. 58 July / August 2007 REOMAC® updatetm
  • 54. AD SIZES AND RATES Ad Size (WxH) 1x Rate 6x Rate REOMAC® Newsletter Advertising Outside Back Cover* 8½”x11” – (add 1/8” for bleed) $1,750 $8,750 Policies Agreement to Advertise Inside Front Cover* 8½”x11” – (add 1/8” for bleed) $1,500 $7,500 Inside Back Cover* 8½”x11” – (add 1/8” for bleed) $1,250 $6,250 Full Page 8½”x11” – (add 1/8” for bleed) $750 $3,750 REOMAC® Headquarters ½ Page Horizontal 7½”x4½” $375 $1,875 2520 Venture Oaks Way, Suite 150, Sacramento, CA 95833 ¼ page 4½”x4½” (2 columns) $200 $1,000 (916) 239-4090 - phone • (916) 924-7323 - fax * As this premium advertising location becomes available, an e-mail notification will be sent to all • members. The spot will be sold on a first-paid basis. PLEASE NOTE: All advertisers must be members in good standing of Unless otherwise stated, ads for this publication may be Black REOMAC®. If the artwork you submit does not conform to the above dimensions, we will make every effort to adjust the ad to fit the space White (“Grayscale”) or 2-Color (black blue–PMS 2955). available. ARTWORK SPECIFICATIONS CONDITIONS Please submit ads digitally where possible (PC format, not Mac) 1. Advertisers and advertising agencies are liable for all content (including text, representations, and illustrations) of advertisements and are re- either on CD, zip disk, floppy disk, or via E-mail. Such electronic sponsible, without limitation, for any and all claims made thereof against submissions should be in EPS, TIF, or PDF format, including all REOMAC® Update, the association, its officers, agents, or vendors. fonts where applicable, and should be compatible with Adobe 2. No advertiser is guaranteed placement, but every attempt will be made Photoshop, Illustrator, PageMaker, InDesign, or Acrobat. We to provide the desired position. will also accept camera-ready (printed) full-sized images suit- 3. Publisher reserves the right to revise, reject or omit any advertisement at any time without notice. able for scanning, at either 133 or 150 line screen. Please see 4. REOMAC® accepts no liability for its failure, for any cause, to insert ad- above for specific ad sizes and dimensions. Artwork should vertisement. be E-mailed to “Advertising c/o REOMAC®” at john@camgmt. 5. Publisher reserves the right to publish materials from a previous advertise- com or mailed to: ment if new materials are not received by material deadline. 6. The word “advertisement” will appear on any ad that resembles editorial Advertising c/o REOMAC® I will be submitting my ad: material. 2520 Venture Oaks Way ❑ Camera-ready by mail 7. Drawings, artwork and articles for reproduction are accepted only at the ❑ Digitally on disc ❑ Via E-mail advertiser’s risk and should be clearly marked to facilitate return. Suite 150 ❑ I need assistance designing a new ad Sacramento, CA 95833 8. No verbal agreement altering the rates and/or terms of this rate card shall (we will discuss design rates separately) be recognized. PAYMENT TERMS 9. All advertisements, layout and designs produced for the advertiser by All payments must be received before ANY ad will run. A frequency REOMAC®’s Graphic Staff will remain the property of REOMAC®. discount is given to those who agree in writing (ie. this signed con- 10. All requests for advertising must be in writing, in the form of this signed tract) to advertise in every issue of the calendar year, or in an equal contract, for the protection of both the advertiser and REOMAC®. number of consecutive issues. If the written agreement is not fulfilled, 11. Once an order for advertising is placed, it cannot be withdrawn or can- the advertiser is liable for the one-time rate charges. Advertisers who celled in whole or in part. submit an ad contract with payment, but fail to submit artwork by the 12. By signing this contract, advertiser agrees to pay in full for reserved space, publication deadline will not be given a refund or credit. even if the ad is not run due to lateness or absence of materials. PLACING YOUR AD To place an ad, complete the information below and mail or fax to: REOMAC®, 2520 Venture Oaks Way, Suite 150, Sacramento, CA 95833 • (916) 924-7323 - fax. REOMAC® will not run your ad without this contract and payment. Name of Individual Being Advertised: ______________________________________________________________________ Billing Contact: ___________________________________________________________________________________________ Billing Address: ___________________________________________________________________________________________ Phone: ____________________________ Fax: ___________________________ E-mail:________________________________ Agency or Advertising Representative (if different from above): _________________________________________________ Phone: ___________________________ Fax: ___________________________ E-mail:________________________________ Person to Contact with Artwork-specific Questions (if different from above): ______________________________________ Phone: ____________________________ Fax: ___________________________ E-mail:________________________________ I agree to place a _______size ad in the following issue(s), and to pay a rate of $___________ per issue: (note: The multiple-issue rate can apply to any consecutive series of issues starting at any point in the year. If you choose the multi- issue rate, please number your first issue “#1” below, and the other issues as they occur chronologically. See condition #5, above.) ___May/Jun ’07 ___Jul/Aug ‘07 ___Sep/Oct ’07 ___Nov/Dec ‘07 ___Jan/Feb ’08 ___Mar/Apr ‘08 Payment/Material Deadlines: 4/1/07 6/1/07 8/1/07 10/1/07 12/3/06 2/4/07 METHOD OF PAYMENT Please check one: ❑ Enclosed is check #_______ ❑ Charge my Credit Card ❍ MC* ❍ Visa* In the amount of $________ Card #: ____________________________________________________ Expiration Date:________________________________ Print Cardholder’s Name: __________________________________________ Signature:________________________________ (rev. 2/07) Cardholder’s Billing Address: ________________________________________________________________________________ * We accept only MasterCard, VISA and American Express
  • 55. Sid Covers Connecticut! More than 35 years of real estate experience, including 16 years in REO exclusively! State-of-the-art computerization with electronic capability for BPO’s, digital photographs, listing agreements, purchase and sale agreements, and invoicing  Cradle-to-Grave Capability  REOs Exclusively Since 1990  96% Sales Price to List Price Ratio  Average 32 DOM Per Property • GRI • CRB • Professional Real Estate Association • • Greater Hartford Association of Realtors • • Fairfield County Board of Realtors • • Eastern Connecticut Board of Realtors • • Chamber of Commerce • Manning Realty Sid Manning 36 School Street Glastonbury, CT 06033 Cell (860) 202-5482 Fax (860) 623-5253