ABOUT RE SERVICES
We take the "O" out of REO.
RE Services LLC has been facilitating lenders liquidation of non-performing
assets since the early 90's. The RE approach transfers the risk
and uncertainty of recovery from investor to asset manager. We fund
the entire process and the result is instant, consistent recovery.
RE can show you how you can recover the maximum amount with the minimum
risk and work. Here's what we do:
Once the lender-investor has identified a foreclosure that is destined
for REO, prior to foreclosure sale (or in the case of redemption states
such as Colorado) after sale but before you can take control of the property,
RE Services provides a bid for the asset that is at least equal to, but
in most cases in excess of what the investor would recover (net of holding,
repair and sales costs) and at least 75 days, if not 180 days sooner than
if the property was taken thru REO.
Timeline for Colorado Foreclosure:
1. Typical REO Process:
Borrower stops paying
60 days NOD
110 days NED
150 days Sale
225 Days PT Deed to investor
285 Days to Market
375 Days to Recovery (assuming 90 days on Market)
What about value?
Typical scenario:
| Original appraised value | $225,000.00 (Market value if in good condition) |
| UPB | $220,000.00 |
| Total debt at Sale (bid) | $236,500.00 |
| Total debt at Sale (bid) | $236,500.00 |
| BPO | $220,000.00 (usually inaccurate, not accounting for true distressed condition of the average foreclosure) |
| REO Sales Price | $205,000.00 (price adjusted for condition) |
| Less commissions | $12,300.00 (6%) |
| Sales concessions | $5,125.00 (2.5%) |
| Net Sales Proceeds | $187,575.00 |
| Hold costs: (Forced placed insurance, Utilities, past due water sewer, Accrued RE taxes) = 1%+ month For 12+ months (375 days) | $24,600.00 |
| Net Recovery | $162,975.00 (72% of Appraised value, 68.9% of bid!) |
2. The RE Services way:
Borrower stops paying
60 days NOD
110 days NED
150 days Foreclosure Sale
151 RECOVERY- RE buys CP from investor.
375-151= 124 days sooner
RE Pays 72-78% of agreed upon BPO
In this case: $168,750.00
Again this amount is at least equal to the anticipated recovery amount as shown above. BUT additionally it is happening 120+ days sooner! This alone accounts for another interest savings-earnings of 2-6% depending on the investors use of funds.
Bottom Line:
| Expected REO net recovery | $162,975.00 |
| RE Services pre REO recovery | $168,750.00 |
| To investor | $2,866.44 (124 days at 5%) |
| 124 days interest earned | $171,616.44 |
| Net Gain | $ 8,641,44 (5% additional recover via RE Services!) |
How can RE Services do this? What’s in it for them?
The RE Services Difference:
RE services has acquired from lenders like you over 500 homes. The
value of each home was maximized thru a careful and efficient process
of rehab and marketing. We do not market properties as-is. They
are reconditioned and marketed to compete with the best properties on
the market. Top dollar is obtained. Marketing time is reduced.
- RE Services owns and operates its own construction company.
- RE Services owns and operates its own Real Estate Brokerage.
- RE Services marketing time is 20-50% below average. RE’s trademarked NEWVALUEHOME.COM is know for providing a like new home in the resale market. We have buyers waiting in the wings for our rehabbed, warranted homes offered with appliance packages and closing cost allowances, as the market deems necessary.
Put all this together and RE gets a premium price in the shortest time possible. RE Profits-You Profit.
Final Benefit:
Your investor may have the loan next door! In these times of increased
foreclosures, the cycle can be viscous. You foreclose, the property
deteriorates, it gets REO’d at 10-20% below previous market price.
YOU HAVE THE LOAN ON THE HOUSE NEXT DOOR. What’s happening
to the neighborhood? Your asset is depreciating because of how you
do business. The homeowner next door is unable to sell or refinance
his home due to sliding values. Another foreclosure looms.
STOP THE CYCLE
The alternative:
Investor transfers the asset to RE Services. The house is rehabbed
and marketed for a premium price. Your loan next door just became
a better risk. End of story.
Check out some of our remarketed properties at: www.essencehomes.com
