How To Find & Close On REOs Today
There’s a lot more foreclosure and REO activity out there today than many realize. Many cities still have thousands of foreclosure properties, and auctions have spiked by over 100% in some places. The deals are out there if you know where to look and how to approach those holding these assets.
Special Servicers
Special servicers handle the bulk of default debt and REOs today. If you are a licensed Realtor, you can approach these servicers and try to get REO listings. Or, if you have experience and a good presentation you may be able to buy REOs and non-performing notes in bulk.
Some of the top special servicers include:
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Key Commercial Mortgage
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BNY Asset Solutions, LLC
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Midland Loan Services, Inc. (now part of PNC)
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Bank of America
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Prudential Asset Resources
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Centerline Capital Group.
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GEMSA Loan Services, L.P.
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Hatfield Philips International Ltd.
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Situs Servicing, Inc.
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TriMont Real Estate Advisors
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LNR Property Corp.
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Ocwen Financial Corporation
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Wells Fargo Commercial Mortgage Services
Pros:
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Low amount of effort if you have a good presentation on hand
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Can be done online
Cons:
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Often a wait and hope strategy
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Need to be able to buy in the tens of millions of dollars range
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No direct communication with real decision makers
REO Agent Directories
Realtors can be a great source of REOs, especially from the bigger banks and servicers. Check out the following directories where they hangout. If you are a Realtor you can get listed on them as well.
Pros:
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Easy to find contacts
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Can be done at scale quickly
Cons:
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Can be time consuming to personally comb through endless directories
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Can be a waiting game
Go Direct to Banks for REOs
Local community banks, credit unions and private lenders have REOs too. This inventory is typically less competitive and often overlooked. Go straight to these asset holders to purchase their REO.
Pros:
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Less competition
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Easier to reach decision makers
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More loyal sources of repeat business
Cons:
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Each will have fewer assets on hand than the big banks
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Probably don’t have organized processes for liquidating REOs
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Need to be good at relationship building
Pre-Foreclosures
Getting to these properties as pre-foreclosures before the auction and becoming REOs can mean they have more equity, less accrued fees on top, and sellers can be more flexible to work with. Find them online, by acquiring lists, and through attraction marketing.
Pros:
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Potential savings on Realtor fees, back interest and fees
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More flexibility in negotiations
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Ability to really help individual homeowners
Cons:
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Typically means working just one property at a time
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Sellers may not want to sell, even if they need to
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Lots of competition in most markets
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