Whats truly amazing is that once you work your way up to the higher ranks of BULK REO you are introduced to the most interesting investors.  These investors have an appetite for making money.  Several colleagues of mine in BULK REO have been working some time with establishing relations and formulating contracts similar to BULK REO. The game is the same but the product can be GOLD, GOLD DUST, OIL (in it's many stages).  I myself have stayed away until recent.  In BULK REO I entered almost 2 years ago, rather I stumbled into.  Yet I had years of experience in Real Estate, even outsourcing foreclosures.  My business style and honest, straight forward practice has opened doors into other avenues.  The reason I feel is the lack of trust and the breath of fresh air an honest businessman brings to the table.  I never thought I would be given the opportunity to sell crude oil, Gold Bullion, and believe it or not cell phones (in bulk).  I thank those that have opened these doors for me.  Those in the BULK REO business: If you thought these deals were hard to bring close you haven't seen anything yet.  At the end of the day it's FUN!!!!  This is truly a fun ride!  

For more information on both Real Estate BULK REO or non-Real Estate Investments contact me at:

mme2000b@yahoo.com

The truth is BULK REO does exist! For most it is like trying to find a needle in a haystack. What makes it difficult when you are really doing it is to establish trust. Many true investor have been lead down the road nowhere.  Most of the actual sellers are clearinghouses because the banks do not want to move REOs in BULK direct to the investor/consumer.  The first strategy is to localize and capture the highest price through Realtors that are able to perform. When this doesn't work they may consider selling in bulk.  I encourage you should you stumble on this blog to try, just be upfront.  Work indirect with someone who you can confirm is working in BULK REOs.  It is a hard thing to do.  Soon I will be publishing with consent testimonials and maybe grant direct contact with my most solid buyers.  It is my hope in the short time this arena exists in its magnitude to set a standard for an ethical process model.  You are welcomed to read my blogs for tips and advice.  I have become overwelmed lately so call or e-mail only if you are an investor or investors rep. looking to buy. 

Thank you and Goodluck!
 Andrew Clemente
 mme2000b@yahoo.com
 cell: 949-677-6394

Sample Example Letter of Intent (LOI) Components

1. LOI Components.  These are the components we highly recommend a buyer use to communicate their order in detail to the REO Seller. 
   1. Dollar Order Amount.  Example $USD 20 Million.
   2. Offering Price.  Based on availability and order amount Buyer offers to pay a "realistic" percentage of the "current value" of property based on Broker Price Opinion ( BPO ) held by the REO seller.  BPOs are typically less than 30 days old.  Pricing is stated as a range of BPO value. Based upon completed orders Valor can provide current pricing trends.
   3. BPO Delivery Range.  Actual BPO value range of the total property portfolio being purchased. Such as $30.7 Million to $40 Million ($0.50 to $0.65 cents on the dollar equivalent)
   4. Property Type.  Example: single family residential.
   5. Price Range ( LTV ).  This is the range of pricing based on current BPO value that the Buyer is targeting for individual property value. Buyer will be paying a percentage of this value such as $0.50 to $0.65 cents on the dollar or 50% to 65 % LTV of current BPO .
   6. Property Condition.  Identify the condition of property you are willing to accept. Example: Minor cosmetic to light rehab.
   7. Occupancy.  Provide the occupancy requirements for the property portfolio.
   8. Title.  Buyer states how they would like to accept title.
   9. Proof of Funds.  Buyer states the type of funds that will be utilized: Cash, BLOC, etc. 
   10. Requested Geographical Location.  List the geographical locations and percentages of properties in each location to be purchased. Use "Exhibits" if necessary to detail locations.
   11. TAPE Delivery Time Requested.  Buyer states how soon they need the tape, typically between 24 to 72 hours.  However, all orders are filled subject to availability.
   12. Initial TAPE Review Period Requested.  Typically 24 to 72 hours.  This represents the Buyer's "free look" period.
   13. Refundable Deposit: Sometimes requested by Financial Institution or Government Sponsored Entity when beginning "due diligence" (takes the property off the market exclusively for Buyer)
   14. Due Diligence Period: Typically - residential a 3 to 7 days; commercial 20 days
   15. Closing:  Two calendar days after the expiration of the due diligence period the full amount of the deposit becomes non refundable. Closing to be coordinated with title & escrow.
   16. Title: To be determined by the Buyer
   17. Escrow Company.  To be determined by the Buyer. Contact Information A Must!
   18. Commission: Buyer shall pay 3% (or 4% for orders under $30 Million)
   19. Closing Paragraph.  This is a brief paragraph describing your purchase.

Sample REO Bulk Purchase Process (Countrywide/ Bank of America )

The Buyer submits a current letter of Intent (LOI) and Proof of Funds (POF).

• The LOI is made out directly to the bank: Countrywide/ Bank of America.
  • Contains a detailed description of the purchase request
  • Includes geographical description of properties wanted by State, County, City, and Zip Code
• The POF is a current bank letter from the buyer's bank to Countrywide/ Bank of America:
  • Stating the buyer has cash/ cash equivalents in the amount of the LOI.
    • Is submitted with either a tear sheet or bank statement
    • If a Letter of Credit provides for conditions to close an REO portfolio
    • Is signed by a bank officer
  • Provides Countrywide/ Bank of America with the buyer's bank contact information
  • Provides permission for a designated Countrywide/ Bank of America employee (to be provided after the buyer returns NCND & NCND Fee Addendum) to call the bank to verify funds.

The Buyer typically receives the REO portfolio (TAPE) from Countrywide/ Bank of America within 72 hours.

• Buyer reviews TAPE (Buyer typically receives a 24 to 48 hour "free look" period.)
  • The TAPE will be accepted/declined in total (the properties will not be "cherry picked"). 
• Buyer and Seller enter negotiations and agree to a enter into a purchase contract
• Buyer and Seller open escrow (Buyer's Choice).  Typically a 10% refundable deposit is made at the open of escrow held during the due diligence period.  At the completion of the due diligence period the Buyer accepts or declines the properties (again, in total) and the deposit becomes non-refundable. When the Buyer proceeds with the TAPE purchase, the transfer of money and property occur in the Buyer's escrow.

 Once the Buyer's initial transaction is completed with Countrywide/ Bank of America, the Buyer can return to the Seller as often as their business model and market conditions allow.

 Importantly, there are  several dozen sources for REO residential and commercial properties to complete a buyer's order as needed.  We provide our buyers the opportunity to purchase in order sizes from $5 Million to $1.5 Billion direct to platform.

 We hope this protocol statement enriches your understanding of our REO bulk purchase process. There is an abundant amount of REO properties available. However, due to current banking conditions a buyer must be patient - all the banks are in crisis management and many are under audit or preparing for audit. Delay's can occur - sometimes a platform will temporarily shut down due to funding, reorganizations, or emergency company meetings. Additionally, LOI accumulation can temporarily be placed on hold due to an audit requirement or slowed due to market conditions. However, our professionals are actively managing information and working diligently with REO Sellers to provide our clients with real product, unparallel options and successful closing results

Sample Example Letter of Intent (LOI) Components

1. LOI Components.  These are the components we highly recommend a buyer use to communicate their order in detail to the REO Seller. 
   1. Dollar Order Amount.  Example $USD 20 Million.
   2. Offering Price.  Based on availability and order amount Buyer offers to pay a "realistic" percentage of the "current value" of property based on Broker Price Opinion ( BPO ) held by the REO seller.  BPOs are typically less than 30 days old.  Pricing is stated as a range of BPO value. Based upon completed orders Valor can provide current pricing trends.
   3. BPO Delivery Range.  Actual BPO value range of the total property portfolio being purchased. Such as $30.7 Million to $40 Million ($0.50 to $0.65 cents on the dollar equivalent)
   4. Property Type.  Example: single family residential.
   5. Price Range ( LTV ).  This is the range of pricing based on current BPO value that the Buyer is targeting for individual property value. Buyer will be paying a percentage of this value such as $0.50 to $0.65 cents on the dollar or 50% to 65 % LTV of current BPO .
   6. Property Condition.  Identify the condition of property you are willing to accept. Example: Minor cosmetic to light rehab.
   7. Occupancy.  Provide the occupancy requirements for the property portfolio.
   8. Title.  Buyer states how they would like to accept title.
   9. Proof of Funds.  Buyer states the type of funds that will be utilized: Cash, BLOC, etc. 
   10. Requested Geographical Location.  List the geographical locations and percentages of properties in each location to be purchased. Use "Exhibits" if necessary to detail locations.
   11. TAPE Delivery Time Requested.  Buyer states how soon they need the tape, typically between 24 to 72 hours.  However, all orders are filled subject to availability.
   12. Initial TAPE Review Period Requested.  Typically 24 to 72 hours.  This represents the Buyer's "free look" period.
   13. Refundable Deposit: Sometimes requested by Financial Institution or Government Sponsored Entity when beginning "due diligence" (takes the property off the market exclusively for Buyer)
   14. Due Diligence Period: Typically - residential a 3 to 7 days; commercial 20 days
   15. Closing:  Two calendar days after the expiration of the due diligence period the full amount of the deposit becomes non refundable. Closing to be coordinated with title & escrow.
   16. Title: To be determined by the Buyer
   17. Escrow Company.  To be determined by the Buyer. Contact Information A Must!
   18. Commission: Buyer shall pay 3% (or 4% for orders under $30 Million)
   19. Closing Paragraph.  This is a brief paragraph describing your purchase.

Sample REO Bulk Purchase Process (Countrywide/ Bank of America )

The Buyer submits a current letter of Intent (LOI) and Proof of Funds (POF).

• The LOI is made out directly to the bank: Countrywide/ Bank of America.
  • Contains a detailed description of the purchase request
  • Includes geographical description of properties wanted by State, County, City, and Zip Code
• The POF is a current bank letter from the buyer's bank to Countrywide/ Bank of America:
  • Stating the buyer has cash/ cash equivalents in the amount of the LOI.
    • Is submitted with either a tear sheet or bank statement
    • If a Letter of Credit provides for conditions to close an REO portfolio
    • Is signed by a bank officer
  • Provides Countrywide/ Bank of America with the buyer's bank contact information
  • Provides permission for a designated Countrywide/ Bank of America employee (to be provided after the buyer returns NCND & NCND Fee Addendum) to call the bank to verify funds.

The Buyer typically receives the REO portfolio (TAPE) from Countrywide/ Bank of America within 72 hours.

• Buyer reviews TAPE (Buyer typically receives a 24 to 48 hour "free look" period.)
  • The TAPE will be accepted/declined in total (the properties will not be "cherry picked"). 
• Buyer and Seller enter negotiations and agree to a enter into a purchase contract
• Buyer and Seller open escrow (Buyer's Choice).  Typically a 10% refundable deposit is made at the open of escrow held during the due diligence period.  At the completion of the due diligence period the Buyer accepts or declines the properties (again, in total) and the deposit becomes non-refundable. When the Buyer proceeds with the TAPE purchase, the transfer of money and property occur in the Buyer's escrow.

 Once the Buyer's initial transaction is completed with Countrywide/ Bank of America, the Buyer can return to the Seller as often as their business model and market conditions allow.

 Importantly, there are  several dozen sources for REO residential and commercial properties to complete a buyer's order as needed.  We provide our buyers the opportunity to purchase in order sizes from $5 Million to $1.5 Billion direct to platform.

 We hope this protocol statement enriches your understanding of our REO bulk purchase process. There is an abundant amount of REO properties available. However, due to current banking conditions a buyer must be patient - all the banks are in crisis management and many are under audit or preparing for audit. Delay's can occur - sometimes a platform will temporarily shut down due to funding, reorganizations, or emergency company meetings. Additionally, LOI accumulation can temporarily be placed on hold due to an audit requirement or slowed due to market conditions. However, our professionals are actively managing information and working diligently with REO Sellers to provide our clients with real product, unparallel options and successful closing results.  

I have posted a few blogs and I have come up with a great idea!   I am likely foolish for posting this and I am likely not the first to think of it.   Many of you can agree the Foreclosures especially in areas like Sacramento, Riverside, Las Vegas, and Florida to name a few are increasing drastically.  While loans have changed and we are seeing a refinance boom for traditional conforming limits many people can not afford nor qualify.   Especially in higher markets.  I have seen many properties that require jumbo financing just sit for months. So what's new?  It's been like this for the last few years.  Many of you Realtors have pounded on my e-mail (assuming I still was employed with Countrywide) harder than any spam that I get.   You are trying hard to get "In" to be approved with lenders like Countrywide because buyers want REOs. So who's making good money?  Either the Superstar Realtors who always make great money, but face it not as much as they used to, or the Realtors approved to sell REOs.  Well in the BULK SALES we help investors buy REOs from the banks between 40-50% on average. Some resell for 50-70% and others are Brokers buying for the resell at less than market 70-90%.  Would you like to sell these?  Unless of course they are providing them to their own agents why not create a sub-market for our BULK Process. What do you think?  Would you work for me or an associate if I can arrange some business for you?? In mortgage ops the latest software always required a work-around. If the banks won't approve you why not! 

Andrew T. Clemente

949-677-6394 Cell

mme2000b@yahoo.com

I wrote an article regarding BULK REO SALES ( http://activerain.com/blogsview/344381/NO-BULK-REO-SALES) and the rest is history.  

With the BULK SALES You find four types.  People with money, People who know people with money, REO SELLERS, and People who know REO SELLERS.

For awhile I just knew people with money and knew people who knew REO SELLERS.  Now regardless of what happens, this is fun I will admit.   I recently flew back east and met a great guy has found success in this endeavor. I have met many people and have been told I am somewhat of a celebrity in this arena.   Who would have thought? 

FOR BULK SELLERS ONLY:  Should you have stumpled accross this I suggest the following.

1. I KNOW SOMEONE WITH MONEY INTERESTED IN REOS:  Don't waste time trying being greedy!  Stop trying to get half or multiple points.  Your not in the game and may never get in.  Unless you know someone with REALLY DEEP POCKETS that trusts you chances are you only get ONE CRACK at this. Take a substantial finders fee (more than you may ever see) and let the BULK SALE VETS move the TAPE.

2. INVESTORS (PEOPLE WITH MONEY):  Be cautious!  There are so many frauds and speculators you may waste your time and the opportunity will either pass you buy or you won't know it if you see it.  You shouldn't give anything more than a scrubbed asset account or evidence of funds. By scrubbed I mean remove account number and name/address info.  Also state what you are looking for. (ie: Acceptable Regions, Investment amount, and what is an acceptable percentage range (30%, 40%, .50 per $) The assets or scrubbed POF is then presented to Seller's. 

3. REO SELLERS:  Its simple these people are the banks, lenders, investors with large property holdings. They call the shots.  Chances are unless they are comfortable working with an individual they may allow a Realtor to sell a few REOs.  BULK is typically reserved for clearing houses.  The clearing houses are the ones who distribute. (aka: sellers mandates, sellers agent)

4. PEOPLE WHO KNOW BULK SELLERS:  These people typically are insiders or have been speaking with friends who open their mouths.  I have seen employees working in an REO Dept. or Loss Mitigation Dept. for larger companies who are trying to make a fast buck with the info they know (shame on them). Be careful of these folk, most do not know what they are doing, but think they do.  However they do come with valuable info if they can lead you to the source.  This means nothing unless the REAL seller chooses to work with you.

GOODLUCK!!!

ANDREW T. CLEMENTE

mme2000b@yahoo.com

Just wanted to drop a line with regards to my research since this all began in July 2007.   As many of you have seen I was/am a Mortgage Broker.  Back around May 2007 I started noticing the trend with regards to Direct Lenders vs. Mortgage Brokers.  The lenders were looking to minimize costs, many wholesale operations were either being consolidated or eliminated.  Also the guidelines were less friendly to wholesale.  Even the rates favored Retail Lending. I decided that if I couldn't beat them I would join them.  I started working for Countrywide Home Loans ("CHL") under a great manager. We focused on distributing and training product and knowledge of CHL REOs / Shortsales.  I tried to get as many Realtors approved but things started going downhill too fast.  CHL changed the terms and soon only those with big pipelines and already approved with CHL would get REOs.  How could a new agent recruit Realtors with empty promises. It just got tougher.  We already knew as an industry which direction things were heading and then the sub-prime crisis unfolded.  Wholesale was now almost eliminated and the damage now effected the "Big Guys".   Being an honorable person I was to refrain from working as a Realtor so a choice had to be made: Focus on the dying loan industry with empty promises or go back to being a broker, but also sell property.  So I left CHL and picked up some short sales and specialized Real Estate. 

I wrote an article regarding BULK REO SALES ( http://activerain.com/blogsview/344381/NO-BULK-REO-SALES) and the rest is history.  

With the BULK SALES You find four types.  People with money, People who know people with money, REO SELLERS, and People who know REO SELLERS.

For awhile I just knew people with money and knew people who knew REO SELLERS.  Now regardless of what happens, this is fun I will admit.   I recently flew back east and met a great guy has found success in this endeavor. I have met many people and have been told I am somewhat of a celebrity in this arena.   Who would have thought? 

FOR BULK SALES ONLY:  Should you have stumpled accross this I suggest the following.

1. I KNOW SOMEONE WITH MONEY INTERESTED IN REOS:  Don't waste time trying being greedy!  Stop trying to get half or multiple points.  Your not in the game and may never get in.  Unless you know someone with REALLY DEEP POCKETS that trusts you chances are you only get ONE CRACK at this. Take a substantial finders fee (more than you may ever see) and let the BULK SALE VETS move the TAPE.

2. INVESTORS (PEOPLE WITH MONEY):  Be cautious!  There are so many frauds and speculators you may waste your time and the opportunity will either pass you buy or you won't know it if you see it.  You shouldn't give anything more than a scrubbed asset account or evidence of funds. By scrubbed I mean remove account number and name/address info.  Also state what you are looking for. (ie: Acceptable Regions, Investment amount, and what is an acceptable percentage range (30%, 40%, .50 per $) The assets or scrubbed POF is then presented to Seller's. 

3. REO SELLERS:  Its simple these people are the banks, lenders, investors with large property holdings. They call the shots.  Chances are unless they are comfortable working with an individual they may allow a Realtor to sell a few REOs.  BULK is typically reserved for clearing houses.  The clearing houses are the ones who distribute. (aka: sellers mandates, sellers agent)

4. PEOPLE WHO KNOW BULK SELLERS:  These people typically are insiders or have been speaking with friends who open their mouths.  I have seen employees working in an REO Dept. or Loss Mitigation Dept. for larger companies who are trying to make a fast buck with the info they know (shame on them). Be careful of these folk, most do not know what they are doing, but think they do.  However they do come with valuable info if they can lead you to the source.  This means nothing unless the REAL seller chooses to work with you.

After careful consideration of my career path I made a decision to leave Countrywide.  Not because of any rocky roads ahead, we are all in this together.  Not because of the company or team I was with.  They were great!  And not because BofA bought Countrywide. Coincidentally I planned to resign that Friday, January 11,2008, unaware of what was to take place.  My opinion, it's a good thing which will start a trend creating a wave of mergers and acquisitions from the biggest banks competing to survive.  I went to Countrywide because 2007 brought uncertainty for mortgage brokers.  It seemed the big banks were restructuring guidelines to cut us out of the picture. They were also offering MSA programs to lease office space for big bucks to capture an in-house advantage. I figured if I couldn't beat them I'd join them. Things were changing too fast and too often.  How was an agent to survive? Eventually I found even the big boys couln't figure it out.  It has taken some time and much bleeding but I found my niche and I am working it.  In order to work it effectively I had to leave Countrywide.  You see I could be go against company policy and work both, being a Realtor/Broker and leading a double life at Countrywide. However, that is not me.  I run an honest business! So I have put the broker hat back on and I am off to a winning year!  Re-invent yourself find your niche and make it work!  Goodluck!

UPDATED STORY 1/2009 : http://activerain.com/blogsview/875972/COUNTRYWIDE-REO-STORY

Between Active rain and a few other sources I get many requests for help to find an agent or even get people approved.  I wish I had the the time help everyone that asks find an agent.  Unfortunately Countrywide will not let me work with Realtors that are not local with me on the REO side.  CW wants to keep the relationships local.  Some of you have thought I am the decision maker of who gets on the list.  I am not.  All I can do, as all Countrywide agents can do, is make a recommendation.  Our management does have a close tie to the Mitigation Team that is true.  I only wish I could capitalize on out of state REO relationships which would allow me the additional time to help all of you. 

It is important to realize that in order to get approved the Retail Management is the key barrier.  Management WANTS Loans in the pipeline.  The key is working with a Countrywide Agent and establishing a working partnership.  Management will look at the number of loans being generated from this relationship.  If the number is small to none it is not likely you will have a  chance.  For the struggling agent looking to get business where they have none this is not the answer.  I hope this helps.  I suggest forming a team of agents, one that is a broker and has REO experience.  Start submitting loans to a CW rep.  Most of us are good at what we do so why not develop the relationship.  And our rates and guidelines are getting harder to beat so why not try us.

As always I wish you luck if this is what you want.

An Account Rep. send me this link.  I took the time to read through the proposed BILL and while some clear points on reform are made I do believe without a more careful structure this bill will be harmful to independent mortgage brokers.   The industry has taken it's toll on the mortgage broker.  I will not persuade you to vote "No" and sign this petition as I have.  That is up to you.  This may or may not have a deep impact on how some of you do business and generate income so I do encourage you to follow the links I have provide.  Should you feel strongly against the proposed HR3915 Legislation you may wish to add your signature.

This link is to a petition opposing the new legislation being voted on next Tuesday that would eliminate Broker Rebates (YSP), among other things.  Please sign it and pass it along to anyone else you think would be interested.

http://www.petitiononline.com/HR3915/petition.html    LINK TO SIGN AGAINST PROPOSED BILL

HERE IS SOME ADDITIONAL INFORMATION I FOUND THAT MAY HELP YOU DECIDE.

http://www.afsaonline.org/cms/filerepository/FrankBillTestimonyOct2007.pdf    INDEPT. STUDY / EVALUATION