Financial Institutions

As a Risk Management or REO Disposition Specialist, you are well aware of the financial chaos in the residential & commercial lending markets across the country. REO inventory levels are higher than any other time in our nation's history. In fact, 2007 foreclosures were up 76% over 2006, and according to most industry experts, the worst has yet to come.

With this ominous forecast in mind , the traditional mindset of the largest financial lending institutions in the nation has been significantly challenged when it comes to how they divest non-performing assets & REO property. Most of these institutions have made a recent, and somewhat radical "philosophy" change or "paradigm shift" so to speak.

They have identified that the traditional method of "listing" an REO property with a "Brokerage" firm is no longer getting the job done. Inventory levels of REO properties have risen out of control. The market landscape is cluttered with "For Sale" signs & the newspapers are littered with desperate ads. This problem is magnified by the fact that REO properties are competing in the marketplace with extremely motivated private sellers, in addition to other REO properties.

To add insult to injury, the traditional buyer of REO properties is the investor looking to rehab and "flip" or rent the property. Considering the delicate state of the economy, the increased risk to the investor, and the tightening of lending underwriting guidelines, this "Buyer pool" for REO property has been dramatically diminished.

So, what does this mean to you and other financial institutions holding REO property?
It means that it is now time to be PROACTIVE rather than REACTIVE. Accelerated marketing, or the "Auction" method, once considered a last resort, is now considered by most as the preferred method of getting the property off the balance sheet- sooner rather than later. Today, REO properties, due to the stigmatization, are languishing of the market 12+ months in most cases. Due to the significant costs associated with holding a property in excess of 12 months, i.e., taxes, insurance , utilities, maintenance & upkeep, not to mention the opportunity cost lost for having the banks money not performing, a property approach is producing NET proceeds that at least equal, and in most cases better than that of a home being marketed under the traditional reactive "listing" approach.

Most institutions that have moved in this direction have also considered that all markets will turn. We will eventually reach a point again in which the demand for property exceeds supply. In this scenario, the "auction" method of sales will typically bring better than market value. Thus, by choosing the "auction" method as the normal course of business in good times and in bad, gains and losses will be "dollar cost averaged" just as if one were to buy stocks on a regular, methodical basis.

To find out more about our unique PARALLEL PLUS ™ marketing strategy & our complete REO Disposition Services Package, please contact us toll free at: 888-662-1020.

We look forward to becoming a valued partner with your institution by providing a smooth and effective way to dispose of your REO challenges!

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