Brian's Monthly Real Estate Ne
From Brian Davis
Brian Davis, Keller Williams Tri-Valley Realty / BRE #: 01146612
5994 W. Las Positas, & 459 Main St., Pleasanton, CA, CA 94588
(w) 925.998.3078
HUD monitoring REO vendors
By: By Inman News

The U.S. Department of Housing and Urban Development (HUD) has hired a consultant to help it track the performance of vendors it employs to manage, maintain, market and sell foreclosed FHA homes. HUD is using a real estate owned (REO) performance evaluation model developed by Walzak Consulting Inc. of Deerfield Beach, Fla., to measure whether vendors are following HUD guidelines and providing cost-effective and reliable performance, the company said. The model will allow HUD to understand what factors produce the best results when measuring vendor performance, and reward top-performing companies by assigning them more properties to manage. Under a new Federal Housing Administration management and marketing program detailed in a November 2010 Federal Register notice, HUD employs three types of vendors to help it dispose of REO properties: • Mortgagee compliance managers, who are intended to protect HUD's interests by reviewing property inspections and providing guidance to lenders on their responsibilities; • Field service managers, who inspect, secure and maintain properties; • Asset managers, who are responsible for the marketing and sale of REO properties. Brokers who wish to list HUD REO properties must be selected by HUD's asset manager vendors. Any broker can represent buyers interested in HUD REO homes by submitting a broker application and selling-broker certification form to HUD and being assigned a name and address identification number (NAID). Only brokers who are registered with HUD may show homes and submit contracts for purchase. HUD pays brokers a commission of up to 6 percent of the selling price, to be split evenly between the listing broker and selling broker (also known as a buyer's broker). Before HUD REO properties are publicly listed for sale, they are evaluated to determine if they qualify for a "first look" and direct sale to local governments and FHA-approved nonprofit organizations. Those properties are generally located in designated Revitalization Areas. HUD REO properties that are not sold under any special programs are listed on HUD Home Store and multiple listing services, and offered on an exclusive, priority basis to owner-occupant purchasers. Following an exclusive sales period, unsold properties are then made available for purchase to all interested buyers, including investors. As of November 2010, HUD's inventory of REO properties totaled 55,486, up 37 percent from the same time a year ago. Not including reverse mortgages, FHA insured loans on 6.75 million homes, up 18 percent from November 2009, and 568,863 of those loans were in default -- an 11 percent increase from a year ago. Although some of those borrowers will be able to get current on their loan, obtain a loan modification, or negotiate a short sale, many will be foreclosed on. Lenders convey properties that complete the foreclosure process to HUD after filing an FHA insurance claim.