In order to succeed in real estate owned sales, an individual has to constantly be able to change to adapt to market conditions. With inventory being released onto the market very slowly right now nationwide, it is important for servicers to be one step ahead of their competition when it comes to disposing distressed properties.
That is why training continues to be an essential course of action for servicers to participate in when it comes to knowing the basic tasks of dealing with a property that is in default so it doesn’t sit vacant for an extended period of time.
US REO Partners, an exclusive network made up of default industry professionals whose goal is to help servicers list and sell bank-owned properties, is currently offering educational seminars to servicers, banks and outsourcers. So far this year, the organization has provided six education sessions for companies of various sizes and also has four additional sessions scheduled.
During their sessions, US REO Partners explains various ways banks and servicers can respond to the problems of their customers who defaulted on their mortgage loans. For example, the basic tasks discussed at a session is how to become better door knockers, how real estate agents can be more sympathetic to distressed borrowers, and asset managers are trained on how to explain to a homeowner what their options are moving forward.
“It’s not in anybody’s financial interests, whether it’s the bank or community’s best interests, to have a property that is a nonperforming asset. They’re probably not taking care of it, people aren’t putting down roots for long-term families and the house itself is sick,” said Mark Shandrow, president and CEO of Shandrow Group, who is also a member of US REO Partners, in an interview. “What’s nice is that we can take our on-the-ground skills as agents and really help educate servicers and outsourcers on exactly how to better respond and interact with their defaulted customers.”
Shandrow, whose company covers the Los Angeles and North Orange County markets, said he recently participated in a training session with servicers and outsourcers that focused on negotiating cash for keys loss mitigation. Shandrow noted that practical tips were offered to the servicers’ internal teams who handle cash for keys, deed in lieu of foreclosures, as well as short sales, which they can then use to educate their agents across the country.
“Your job is to go out there and represent the bank, but you have to understand the situation and convey it to the homeowner the gravity of the situation and what their options are and get them to trust that you are ethical, that you are looking out for everyone’s best interests and hopefully you can help them,” Shandrow noted.
Cash-for-keys loss mitigation training includes going over some of the best on-the-ground practice skills to teach the servicers’ agents on how to not leave an offer on the closing table. Shandrow said the sessions talk about ways that agents can get negotiate multiple offers, negotiate repairs, and anything that involves a servicer trying to negotiate top dollar, especially now when the markets have so many offers on a single property.
“A big part of that is that we want to avoid any litigation and/or any disgruntled agents or buyers in the marketplace. We have to educate each agent on how to handle large volumes of offers,” Shandrow added.
Selene Finance LLC, a Houston-based national mortgage servicer whose specialty is subprime special service type loans, was presented a training session by US REO Partners on how current market conditions and strategies have affected real estate sales in the Inland Empire area of California.
Dan Shimmin, senior vice president of real estate disposition at Selene Finance, said company employees as well as several of their investors and Wall Street trading firms who participated in the class, thought the training was “very beneficial” because it identified the ups and down of micro markets in the area and what the correct strategies are in dealing with properties there.
“I’m a big believer in a regular training program, so we’re providing training to our team at least twice a month,” Shimmin told this publication in an interview. “With this crazy market right now, understanding the micro markets within a major market is something valuable that we always get out of the agent trainings. Fraud training sessions also help our closers determine which buyers are for real since we are getting multi-offer situations in many markets.”
The number of REOs will fluctuate as homeowners use alternatives, such as short sales or loan modifications, to keep their homes. The fact remains that there will always be an REO market, and being successful during any market climate will be based on a thorough understanding the effects of industry changes.
“The real estate industry will not recover successfully if financial institutions and real estate brokers do not work together in the sharing of information,” said Steve Modica, founding member of US REO Partners. “Our group intends to offer an educational platform to financial institutions free of charge as a service to our industry, and as our contribution to the improvement of real estate nationwide.”