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.
Top perfomers will get more homes to manage
By Inman News
Monday, February 7, 2011
Need-to-knows before you buy
There are obvious decisions that need to be made before embarking on a home purchase. How much can you afford to pay? How much do you feel comfortable paying? Which neighborhoods offer the kinds of homes and amenities -- like good schools, shops and transportation nearby -- that you want? How secure is your employment? Do you have enough cash reserves for emergencies?
In addition to these practical considerations, you should find out as much as possible about the local area. Does it have a strong and diversified economic base? Is employment improving or are employers laying workers off? Are businesses moving into or out of the area?
Are new facilities planned that will impact the community, like a freeway that might change the character of a neighborhood by creating unwanted noise? This could negatively impact property values.
However, a new rapid transit station under construction within walking distance of where you want to buy could make commuting to the closest urban center easier. This might have a positive impact on local property values and cut your commute time considerably.
HOUSE HUNTING TIP: Residential real estate is a localized business. Home prices differ from one area to the next. State laws governing home-sale transactions also differ. Federal law requires sellers to disclose lead-based-paint hazards. But, state laws differ on whether or not sellers need to disclose other defects, like a drainage problem. Many states have mandatory seller disclosure requirements. In other states, seller disclosures are voluntary, not mandatory.
Agency relationships also vary from state to state. For example, dual agency, where one broker represents both the buyer and seller, is illegal in many states. It's legal in others. In states where dual agency is legal, like California, the broker has a split loyalty to the buyer and seller. However, in states like Massachusetts, Michigan and North Carolina, designated agency is an option. With designated agency, both buyer and seller are represented by the same broker, but by different agents. Each agent owes loyalty to the party he or she is representing.
It's important that your real estate agent explain the different agency relationships recognized in your state, particularly if you're coming from another state where different agency relationships are recognized. You should also find out how much disclosure about property defects you can expect to receive from the sellers. You should always have a property you're considering buying thoroughly inspected by qualified professionals. Include an inspection contingency in the contract even if the sellers have provided presale inspection reports.
Work with a knowledgeable, experienced local real estate agent that can inform you about issues, statutes and ordinances that will affect you when you buy or sell a home in the area. Many real estate companies require buyers and sellers to sign generic disclosures, sometimes 10-18 pages long, covering such things as ordinances, disclosures and agency laws, rent control and schools.
THE CLOSING: Be sure to read these and ask your agent if you have any questions. Most buyers and sellers don't take the time.
Local economy, seller disclosures can impact resale value
By Dian Hymer
Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author.
In addition to these practical considerations, you should find out as much as possible about the local area. Does it have a strong and diversified economic base? Is employment improving or are employers laying workers off? Are businesses moving into or out of the area?
Are new facilities planned that will impact the community, like a freeway that might change the character of a neighborhood by creating unwanted noise? This could negatively impact property values.
However, a new rapid transit station under construction within walking distance of where you want to buy could make commuting to the closest urban center easier. This might have a positive impact on local property values and cut your commute time considerably.
HOUSE HUNTING TIP: Residential real estate is a localized business. Home prices differ from one area to the next. State laws governing home-sale transactions also differ. Federal law requires sellers to disclose lead-based-paint hazards. But, state laws differ on whether or not sellers need to disclose other defects, like a drainage problem. Many states have mandatory seller disclosure requirements. In other states, seller disclosures are voluntary, not mandatory.
Agency relationships also vary from state to state. For example, dual agency, where one broker represents both the buyer and seller, is illegal in many states. It's legal in others. In states where dual agency is legal, like California, the broker has a split loyalty to the buyer and seller. However, in states like Massachusetts, Michigan and North Carolina, designated agency is an option. With designated agency, both buyer and seller are represented by the same broker, but by different agents. Each agent owes loyalty to the party he or she is representing.
It's important that your real estate agent explain the different agency relationships recognized in your state, particularly if you're coming from another state where different agency relationships are recognized. You should also find out how much disclosure about property defects you can expect to receive from the sellers. You should always have a property you're considering buying thoroughly inspected by qualified professionals. Include an inspection contingency in the contract even if the sellers have provided presale inspection reports.
Work with a knowledgeable, experienced local real estate agent that can inform you about issues, statutes and ordinances that will affect you when you buy or sell a home in the area. Many real estate companies require buyers and sellers to sign generic disclosures, sometimes 10-18 pages long, covering such things as ordinances, disclosures and agency laws, rent control and schools.
THE CLOSING: Be sure to read these and ask your agent if you have any questions. Most buyers and sellers don't take the time.
Local economy, seller disclosures can impact resale value
By Dian Hymer
Dian Hymer, a real estate broker with more than 30 years' experience, is a nationally syndicated real estate columnist and author.
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