Three Businesses Create Initiative to Speed Up REO Sales
A program has been started that encourages homebuyers to use rehabilitation loans in order to increase sales for bank-owned properties.
First Guaranty Mortgage Corp., a national full-service mortgage lending firm, has partnered with Atlanta-based APD Solutions, a national neighborhood revitalization and community development firm for public and private sector clients, and Home Depot to launch this “Rebuild the Dream” initiative to help the real estate industry recover from its troubled times.
The purpose of the program is to increase the value and appeal of REO properties by using rehabilitation loans to accelerate the resale of these types of homes. Renovation loans are offered through the Department of Housing and Urban Development as well as Fannie Mae.
By endorsing homeowners to use these loans, the initiative hopes to reduce the time cycle it takes to sell REO properties and generate more stable sales prices. The three companies will work with Realtors, REO asset managers and real estate agents to coordinate the marketing of REO properties, which are usually promoted while the asset is in a state of disrepair.
“This initiative will work to smooth the transaction for realtors who otherwise would have avoided the rehabilitation loan,” said Andrew Peters, senior vice president of First Guaranty Mortgage Corp., McLean, Va. “We believe that many have avoided such products because of a misperception that the 203 (k) loan is time consuming and difficult to close. Now, a realtor will be able to market a bank-owned property to prospective buyers, suggesting they customize the house as though it were brand new.”
As part of the program’s partnership, all three businesses will manage the administrative requirements it takes to approve the rehabilitation loan through closing. Both APDS and Home Depot will also provide customer service and coordination on the delivery of the renovations services, including contracting on the rehabilitation work.
James Cromartie, business development director at APD Solutions, said he believes the initiative will have a positive impact for any foreclosed property in a community.
“Very few bank-owned homes come through the foreclosure and repossession period in good condition, which makes them far less appealing to potential buyers. The result is that bank-owned homes tend to stay on the market for extended periods of time,” Cromartie said. “Rebuild the Dream will help shorten that period, putting people back into homes, and neighborhoods, more quickly—all to the community’s benefit.”