NATIONAL ASSOCIATION OF REO BROKERS

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TABLE OF CONTENTS

•A.  Introduction.

•B.  NAREOB's History.

•C.  NAREOB’s Commitment.

•D.  NAREOB's Organization.

•E.  NAREOB Results.

•F.  NAREOB Members.

•G.  Fast Track Service-NAREOB's Residential REO Program begun in 1988.

•H.  Fast Track Service II-NAREOB's Commercial REO Disposition Program.

•I.  NAREOB's Broker Price Opinion Service.

•J.  NAREOB's Conferences.

 

A.      Introduction

 

The National Association of REO Brokers (NAREOB) limits its services to

the areas of foreclosure real estate and non-performing real estate loans.

This includes traditional services in the marketing and disposition of foreclosed real estate, as well as related areas of default management. The Association works with Sellers, Buyers, Real Estate Licensees and Vendors involved in the foreclosure real estate market. Foreclosed properties assigned to NAREOB by REO sellers include land, residential, commercial and industrial real estate.

 

NAREOB's network of real estate licensees exceeds 1,800 professionals. Collectively, these real estate brokers and agents have listed in excess of 150,000 REOs (real estate owned foreclosures). The average licensee has 14 years of real estate sales experience, with 4 years of REO marketing experience. NAREOB matches the licensee's qualifications to the property type to insure the REO seller or buyer has the right person for the job.

 

NAREOB's REO Sellers are real estate lenders and government agencies. Since our first referral from California Federal Savings Bank in Los Angeles, California in 1988, the Association has worked with over 160 sellers. For the past twenty two years, we have referred more than 25,500 requests for services to our network of brokers and vendors.

NAREOB continually refers buyers for individual REOs to our network of NAREOB Brokers. In 1992, NAREOB experienced a significant increase in Buyers purchasing large pools of non-performing loans and real estate foreclosures. The Association has provided these institutional Buyers with custom services to assist in due diligence, acquisition and disposition of pools of assets.

 

B. NAREOB's History

 

The history of the Association dates back to 1984, when Walter R. Barnes, NAREOB's Executive Director, became the first REO Manager to establish a network of real estate licensees. Mr. Barnes provided these agents with semi-annual training workshops, and written procedures to dispose of real estate foreclosures. These procedures and the broker network concept were quickly adopted by many REO departments nationwide.

 

In 1987, the National Association of REO Brokers was incorporated. NAREOB formed the first national REO Broker Network. The Directors of the Association brought to NAREOB a unique blend of real estate marketing, real estate lending and business backgrounds. Their years of experience in serving the needs of corporate America, combined with extensive experience in REO management and marketing, assured REO sellers that their needs were thoroughly understood. Over the years, NAREOB and the NAREOB Brokers have worked diligently to insure the REO seller and buyer is being well served.

 

Since its beginning, NAREOB has been an industry leader in providing buyers and sellers with:

 

1.  The most experienced and productive group of REO Brokers and Vendors in the nation.

2.  Standard procedures to ensure consistent and high quality service.

3.  Comprehensive software programs designed to manage and market REOs.

4.  Contracts, contract addendums and other documentation designed to safeguard the seller.

5.  A pool of expert technical consultants to solve special problems.

6.  Educational workshops and conferences for REO sellers and institutional buyers.

7.  A NAREOB REO Hotline for immediate response and fast service.

 

C. NAREOB's Commitment

 

NAREOB's KNOWLEDGE WORKS TO THE REO SELLER'S AND BUYER'S ADVANTAGE. The knowledge and expertise of our NAREOB staff and its Brokers and Vendors benefits REO sellers and buyers in both the actual marketing of the REO and in defining problems that must be solved to make the property marketable. Whenever legal, structural, geological or environmental issues are involved, NAREOB can refer buyers and sellers to the required expert consultants.

 

NAREOB PROVIDES SUCCESSFUL RESULTS. As REO disposition experts, NAREOB Brokers achieve efficient and cost-effective results for our clients. The years of first-hand REO disposition experience enables NAREOB Brokers to prepare a property for market at minimum expense. NAREOB's goal is to achieve a sale which will result in a solid investment for the buyer while maximizing the recovery for the REO seller within the shortest possible time period.

 

NAREOB DELIVERS SPECIFICALLY WHAT THE REO SELLER NEEDS. By following standardized problem-solving procedures, NAREOB Brokers routinely meet the recovery objectives of REO sellers. Upon request, NAREOB will concentrate on the specific needs of related services, such as short sales.

 

NAREOB IS DEDICATED TO SERVICE. NAREOB and our Brokers are dedicated to providing the finest REO disposition service in the nation. REO Sellers and Buyers can be confident their interests are being serviced by 'America's Leaders in REO Disposition'.

 

D. NAREOB's Organization

 

The National Association of REO Brokers is a nationwide network of real estate professionals dedicated to serving the needs of the real estate foreclosure industry. Our goal is to provide our clients with a top quality, nationwide REO disposition service that is unmatched in:

 

1. Prompt and proper disposition with a minimum loss of time and money.

2. Maximizing recovery in relation to the disposition time.

3. Minimizing expenses.

4. Providing information which enhances the decision making process.

5. Providing a source for expert consultants.

6. Protecting the interests of the REO buyer and seller.

7.  Improving the REO seller's profitability by eliminating non-earning assets.

8.  Enabling the seller's REO staff to make the best use of their time and resources.

 

E.  NAREOB’s Results

 

With the experience and expertise of our NAREOB Members, REO sellers and buyers receive top quality REO disposition services nationwide. The results include:

 

1. Decisions made with greater confidence based on accurate, timely and relevant information.

2. Improved profitability.

3. Expedited closings.

4. Maximized asset recovery.

 

Face the challenges of today's REO Market with a NAREOB Broker on your side. Begin by calling the Association or contacting a participating NAREOB Broker.

 

F. NAREOB Members

 

The NAREOB Members are a select group of highly qualified real estate professionals who have been carefully chosen for their REO disposition expertise and leadership in their specific geographical marketing areas. They are individuals who, either as brokers or agents of reputable real estate companies, have been selected from the best in the business without restriction to any particular company or franchise affiliation. Throughout their membership in NAREOB, they receive additional training, guidance, tools and support to ensure that each REO buyer and seller receives consistent, high quality service.

 

G. Fast Track Service-NAREOB's Residential REO Program

Fast Track Service, NAREOB's comprehensive residential REO disposition program since 1988, is designed to expedite the marketing of REOs. The service commences when the Seller's REO staff notifies NAREOB of a new REO. NAREOB's staff assigns the REO to a NAREOB Broker, in the property's local market area, and coordinates the following services.

 

•1.   Initial Inspection

Within 48 hours of receiving the assignment from NAREOB, the NAREOB Broker will determine occupancy status and provide preliminary details regarding the property condition. In addition, the Broker will determine whether the property is owner or tenant occupied. The agent will attempt to obtain the names of the occupants and notify the client or the client's attorney of the occupants' names.

 

•2.   Negotiated Occupant Move-Out

Where governing statutes permit, the client or client's attorney may authorize the NAREOB Broker to negotiate a move-out date with the occupant. The occupant will be offered a cash incentive to vacate the property on an agreed-upon date. As a condition of payment, the occupant must agree to leave the premises in a clean and sanitary condition. The NAREOB Broker will advance the funds on the client's behalf if and when the conditions are met.

 

•3.   Evictions

When requested, NAREOB or the NAREOB Broker will assist in the eviction process by recommending a local eviction attorney or legal service specializing in evictions. The decision to initiate an eviction proceeding will remain with the client. The NAREOB Broker will meet the authorized law enforcement agency at the lock out.

 

•4.   Secure, Re-key, Clean up, and Winterization

Once the REO property is vacant, the client may authorize the NAREOB Broker to spend a pre-approved amount of money to secure, winterize (if applicable), change locks, replace broken windows, remove trash, mow the lawn, broom sweep and clean up the interior of the property.

 

•5.  Appraisal

When requested, NAREOB or a NAREOB Broker will assist in obtaining an appraisal by recommending a local appraiser or an appraisal service. The decision to order an appraisal remains with the client. The NAREOB Broker will assist the selected appraiser in gaining access to the REO property.

 

   6.  Broker Price Opinion

Provided the property is reasonably accessible, the NAREOB Broker will complete a BPO and deliver it to the REO Seller or Buyer within five (5) working days from the date of assignment. The NAREOB Broker will attempt an interior/exterior inspection of the REO at the time of the initial inspection. If the occupants are uncooperative, the NAREOB Broker will provide a drive-by BPO initially and an interior inspection BPO once the client has possession of the REO.

 

The Broker Price Opinion will consist of the following information on NAREOB's BPO form:

 

1. Narrative description of the property.

2. Occupancy data.

3. Comparable sales and valuation factors.

4. Three opinions of value.

a. The "quick sale" value - the probable sales price with no repairs in 30 days or less.

b. The "as is" value- the probable sales price with no repairs in a normal marketing time.

c. The "repaired" value - the probable sales price with completed repairs in a normal marketing time.

5. Condition of improvements and grounds.

6. Estimate of initial cleanup cost and repairs to secure the REO.

7. List of urgent repairs needed to prevent further damage to the REO.

8. List of repairs necessary to obtain ""repaired" value sales price.

9. List of recommended monthly maintenance services and estimated costs.

10. Photos of the exterior of the REO and other photos of conditions affecting the market value.

11. Recommendations for list price, financing and marketing incentives.

 

•7.   Hazardous Conditions, Materials, and/or Elements

If and when the NAREOB Broker discovers suspected hazardous conditions, materials and/or elements, the client will be notified immediately. If requested, NAREOB or the NAREOB Broker will assist in obtaining bids for proper and safe correction.

 

•8.   Utilities

Recommendations for utility service will be made by the NAREOB Broker on a case-by-case basis. If requested, the NAREOB Broker will have the utilities connected in the Broker's name and will advance payment on behalf of the client for these utility services.

 

•9.   Repair Bids and Contracts

The NAREOB Broker will obtain written repair bids for the client. With client approval, the NAREOB Broker will authorize and supervise the repair work.

The NAREOB Broker will follow a prescribed procedure to insure satisfactory completion of the work and/or services requested. Statements of expenses and vendor bills submitted to the client for payment will reflect the NAREOB Broker's written approval that the work has been done in a satisfactory and workman-like condition.

 

•10.Property Inspections

The REO will be inspected at least twice a month by the NAREOB Broker to insure the property is secure and properly maintained. These inspections will continue until the property is sold and closed.

 

•11.Written Status Reports

The client will be provided a written monthly status report for REO properties assigned to NAREOB and its network of Brokers by the 25th of each month. The NAREOB Broker will include the number of showings, copies of advertising and recommendations which will help move the REO to a quick sale.

 

•12.Seller Protection Documents

On an ongoing basis, NAREOB Brokers will submit listing and purchase offer addendums specifically designed to further protect the Seller in an REO transaction.

The Addendum to the Listing Contract states, among other terms and conditions of the listing agreement, that: the REO is to be sold as marketed; there is no broker protection period; and advises the licensee the listing is subject to cancellation (for which no sales commission will be paid) due to a Mortgage Insurance Company's, investor's and/or government's first right of refusal.

 

The Addendum to the Purchase Offer states, among other terms and conditions of the purchase offer, that: the buyer acknowledges the REO is sold as marketed; a "due diligence" inspection of the property is to be completed by the buyer at the buyer's cost within ten (l0) days of seller's acceptance of the purchase offer; the buyer is to select a lender and lender's financing program within five (5) days of seller's acceptance; and the buyer is to qualify for a real estate loan within 45 days of seller's acceptance.

 

•13.Buyer's Loan Monitoring

With the proper authorization, the NAREOB Broker will monitor the processing of the buyer's loan application. This service will ensure that the processing of the loan is progressing as scheduled.

 

•14.Settlement (Escrow) Monitoring

NAREOB or the NAREOB Broker will select a settlement agent or attorney having REO closing experience, unless otherwise instructed by the client. The NAREOB Broker will monitor the settlement to insure an expedited closing.

 

•15.Reimbursement for Expenses

The NAREOB Broker will advance, on behalf of the client, monies to pay for minor REO expenses approved by the client. When these expenses exceed $100.00, the NAREOB Broker will submit to the client a statement of expenses with paid receipts attached. The client agrees to pay these expenses upon receipt of the invoice.

 

Major expenses shall be submitted directly to the client with the NAREOB Broker's written approval for payment. The NAREOB Broker is not expected to advance these monies.

The NAREOB Broker can submit, with the client's approval, REO expenses and estimated utility expenses to a settlement agent for payment at closing. Unless the NAREOB Broker has received the client's prior approval to do so, expenses submitted by the NAREOB Broker for payment after the settlement date may be reimbursable at the client's option.

 

•16.Fee Schedule

The following is the Fast Track Service fee schedule for NAREOB Broker services rendered exclusive of the real estate commission for residential properties.

A. The fee for items 1 through 9 is $ 500.00. *

B. The fee for items 10 and 11, Property inspections & status report, is $100.00 per month.

C. The fee for preparing item 12, Seller Protection Documents, is $50.00 per document.

D. The fee for items 13, 14 and 15 is $100.00 per hour.

 

As consideration for a client referring an REO listing to NAREOB, the NAREOB Broker assigned to market the property, may (but is not obligated to) discount or waive all fees for Fast Track Services rendered by the Broker as outlined in items A, B, C and D of the fee schedule.

 

The Broker's decision to discount or waive the fees will be based on acceptable terms and conditions to the NAREOB Broker including a negotiated real estate commission mutually agreeable to Broker and Client.

 

* NAREOB and the NAREOB Broker reserve the right to charge additional fees for properties requiring extensive structural repair, title, geological, or environmental problem resolution oversight. The rate is $100.00 per hour and requires the client's prior approval before commencement. Appraisal Fees are an additional charge.

 

H. Fast Track Service II - Commercial REO Disposition Program

 

NAREOB offers a modified Fast Track REO disposition program for Commercial, Industrial and Land REOs. The service commences when the Seller's REO staff notifies NAREOB of a new REO. NAREOB's staff assigns the REO to a qualified network Broker and coordinates the services with the Broker. The program is unique in that it is tailored to the needs of the REO Seller. For more information on the program, contact NAREOB at 1-714-526-4829.

 

I. NAREOB's Broker Price Opinion Service

 

Information is the key to successful REO management. Obtaining Broker Price Opinions (BPO) can be a time consuming task for a busy REO Seller or their foreclosure department. Direct access to NAREOB's BPO Hotline quickly gets the needed information to the seller or buyer.

 

No matter where the property is located, NAREOB's network of qualified brokers and agents are available to provide BPOs quickly; NAREOB Brokers have the experience that creates results. NAREOB has carefully screened its brokers to insure that you will deal with qualified professionals. By contacting NAREOB, you will receive the same outstanding results hundreds of other REO sellers and buyers have achieved with these successful professionals.

 

NAREOB has designed forms for residential and commercial Broker Price Opinions. We can also use a client's form. NAREOB offers two Broker Price Opinion Services.

The first service is an exterior-only Drive-by BPO. The NAREOB Broker does not gain access to the property or attempt to make contact with the occupants. In this case, the Broker provides the following services: one (l) photo of the front exterior of the building; "quick sale" and "as is" values; recent comparable sales; current listings information; neighborhood data; and a brief description of local marketing conditions. It normally takes five working days to complete the assignment, yet it can be done in as little as one day. NAREOB charges an additional fee for a BPO requested to be done in less than two working days.

 

The second type of BPO is a Broker Price Opinion and Property Condition Report. The Broker reports on key property data, including a detailed examination of the interior and exterior property condition. Also included in the report are suggestions on marketing strategy, recommendations and estimates for costs of clean up and repairs to secure the property, lists of urgent repairs, repairs necessary to sell at the "repaired" value sales price, and required property inspection reports to sell the property. For a more comprehensive outline of this BPO, refer to section 6, Broker Price Opinion, under the Fast Track Service, residential program. Expect a five (5) working day turnaround time for the BPO.

 

To order a BPO call NAREOB's BPO Hotline at 1 714 526-4829. A single call to the NAREOB Hotline puts a NAREOB Broker on the job immediately. NAREOB's BPO Hotline is convenient to both buyers and sellers because it saves the caller time and money.

 

J. Nareob REO Conferences

 

There are no crash courses on how to manage a residential or commercial REO portfolio. In fact, most managers have little formal educational training in this discipline.

Since 1984, Walter Barnes, NAREOB's Executive Director, has been producing professional development workshops that address issues of concern to institutional REO Managers and REO professionals. Mr. Barnes founded the nation's largest trade organization composed solely of qualified REO Brokers. Typical issues addressed at NAREOB conferences include: ways to lower seller-paid sales costs; techniques to improve the efficiency of foreclosure marketing programs; review of regional foreclosure trends; and new tools to communicate with today's Real Estate Buyers and Sellers.

 

More than twelve hundred participants have attended REO conferences offered by NAREOB's management. These professionals know that attending conferences is essential for keeping well informed in these changing times. The timeliness of the topics and caliber of speakers clearly demonstrate NAREOB's commitment to knowledge and excellence through education.

 

•K.      NAREOB’s Client List

 

The following is a list of former clients of the National Association of REO Brokers, Inc.

Abacus Federal Savings Bank	Accu Bank Mortgage	Advanta Mortgage USA	Aegon Realty Advisors
American Home Funding	American Mortgage & Inv	American R.E. Group	Anchor Mortgage
Arcs Mortgage	Associates Financial Service	Association National Mtge.	Baltimore Federal Financial
Bank Atlantic	Bank Smith Mortgage	Bank of Boston	Bank of Hawaii
Barnett Banks, Inc.	Beneficial Finance	Benjamin Franklin S & L	Berkeley Federal
Beverly Hills Securities	Boston Five Savings Bank	Brazos Asset Management	Butte Savings and Loan
CS First Boston Corporation	California Federal Bank	Carteret Savings Bank	CenTrust Mortgage
Cenlar Federal Savings Bank	Chase Manhattan	Chemical Bank	Citicorp Mortgage
Citizens National Mortgage	Collective Federal Savings	Comfed Savings Bank	Commerce Mortgage
Commercial Credit Corp.	Commonwealth Mortgage	Comnet Mortgage	Connecticut National Bank
Continental Savings of Amer.	Countrywide	Delta Funding	Dime Savings Bank of NY
Dollar Mortgage Corp	EMC Mortgage	Eastern Savings Bank	Empire of America
Essex Mortgage	Express America Mortgage	F.H.L. Financial	FBS Mortgage
FDIC	FGB Realty Advisor	Farm & Home Savings	First Denver Mortgage
First Nationwide Bank	1st Federal Santa Monica	First Financial Savings	First Interstate Mortgage
First Los Angeles Bank	First National Bank of AZ	First National Bank	First Union Mortgage
Fleet Mortgage	Fleet Real Estate Funding	Ford Consumer Finance	Foremost Servicing Company
Founders Savings & Loan	Freddie Mac	GE Capital Asset	Glendale Federal Bank
Goldome Realty Credit	Greenpoint Bank	Greenthal Realty Partners	Harold A Dawson
Home Savings of America	Home Star Industries, Inc	Household Finance	IMCO Realty Service
Imperial Savings Bank	Investors Mortgage Ins	J.E. Robert Company	Key Bank of New York
Key Corp	Kilburn-Young Asset	Kliman & Associates	Knutson Mortgage
Leader Federal Savings & Loan	Lender Service Bureau	Liberty Capital Company	Liberty Savings Bank
Lincoln Service Corp	Loan America	Loansmith	Lomas Mortgage USA
Lone Star Field Service	Long Beach Mortgage	M & T Mortgage	Medallion Mortgage
Meridian Mortgage	Metmor Financial Services	Metropolitan Mortgage	MidCoast Mortgage
Miller Mortgage	Money Store	Mortgage Industry Advisor	National First Mortgage
National Home Mortgage	National Mortgage Corp	National Stonehedge	Nations Credit
Nationsbank	New Dartmouth Bank	Niagara Asset Corp	North American Mortgage
North Carolina National Bank	Nova Financial Services	Numerica Savings	PCI Companies
PMI Mortgage Insurance	Portfolio Acceptance Corp	Prudential Home Mortgage	RTC
RealEcon	Resource Financial Group	Roosevelt Bank of St. Louis	Standard Federal Savings
San Francisco Federal S & L	San Jacinto S.& L	Santa Paula S.& L	Savings of America
Shorewood Financial Inc	Sibley Real Estate Services	Signet Mortgage Corp	Simmons First Mortgage
Sun belt Savings & Loan	Summit Securities	The Beverly Group	Trust America Resources
The Clayton Group, Inc	Transworld Mortgage	Travelers Mortgage	Verex Service
U. S. Loan Corporation	Union Planters National	United Guarantee	Wendover Funding
Weyerhaeuser Mortgage