As you get more and more involved in the REO industry it becomes more clear that there are sophisticated operations that trigger the source of REO listings which we (real estate professionals) aren’t always apprised of.  Decisions are made at the corporate and government level of real estate that effect your business as a real estate agent or broker.  Unlike traditional real estate, REO specialists must be savvy in national and global economics rather than local economies.

In this article I will demonstrate how Fannie Mae, a government-sponsored enterprise (or GSE) has impacted REO listings and why you should educate yourself with Fannie Mae.  Fannie Mae is a name that was made up using the letters that represent it’s initials.  FNMA stands for the Federal National Mortgage Association.  This should immediately tip you off as to who they are and what their overall agenda is.

Federal = national government of the United States of America

National = covers the entire country

Mortgage = the financing sector of real estate

Association = an organized entity established by and for professionals within that particular sector

Fannie Mae was NEVER designed to be the owner of property, let alone thousands of properties.  FNMA was designed to protect us from the flaws of thrifts, which we saw in the Savings & Loan (S&L) crash starting in 2007.  So, if you’re a GSE which is not designed to own and list real estate for sale who just happened to inherit thousands of defunct notes on real estate throughout the country, what would you do?  The answer:  get someone who does know how to sell real estate to help you at a discount so you don’t go bankrupt trying to unload this huge inventory.

Finally, we have the “How” part of this equation.  HOW does FNMA list their properties, and, more importantly, HOW can you become one of the specialists they rely upon to help them?  The answers are simple, but the process is complicated.  The answer is that you locate the outsourcers used to manage these assets, otherwise known as asset management companies.  The process to being selected by an asset management company is the complicated part.  I’ve listed some of the major outsources FNMA uses to list their REO’s for you below (the easy part).  Now, it’s your job to get selected.  Here are a few steps to assist you in the selection process:

1. Ensure that all of your licenses, resume, references, insurances, and entities are up to date.  Asset Management companies are conveyor systems and anything that slows down the process will likely get ejected.
2. Get your certifications.  Not just any certifications.  Get the industry’s best:  NFSTI, NRBA, REOMAC, CDPE, SFR, and Five Star to mention a few.  Don’t spare a dime, it’s worth every penny!
3. Build up your references.  Any references that you can obtain from the finance sector is a huge perk.  If you’ve never listed REO before, get a lender who helped you close a deal to write you a letter of recommendation.
4. Network with your peers.  There are many great networks that exist for you to get informed and acquire potential leads.  NFSTI, REO Network, REOPro, and the BPO University.
5. Apply for REO Associations.  Apply for acceptance in organizations such as REOMAC and NRBA.  The acceptance process can take a while, so the sooner you start the better.
6. Execute a minimum of 100 BPO’s before getting frustrated.  Anything less than 100 and you are still inexperienced in the industry’s eyes.

As always, don’t expect immediate results in REO.   Now, once you’ve begun the process of checking these 6 steps off your checklist, you can begin applying for the following TOP OUTSOURCERS FOR FANNIE MAE:

PMH

New Vista Asset Management

Atlas

Green River Capital

Equity Pointe

National Default Servicing

Chrisley Asset Management

24 Asset Management

VRM

Final Word:  If you skipped the reading material above and immediately began clicking the links to the asset management companies, I’m going to assume 1 of 2 things:  1.  You’re already ahead of the game and are on your way to being an REO specialist with great success, or 2.  You’re very impatient and don’t like putting in the work required for success and I’ll anticipate your comments on how this article was not helpful and you’re not getting anywhere.  The choice is yours.

Nationstar Mortgage is here to help you be more successful.  (A snippet taken from the Nationstar website for Realtors)

You need to partner with a respected national lender specializing in REO financing You need Nationstar Mortgage.

Our dedicated REO Finance teams are comprised of experienced loan officers, processors, underwriters and closers dedicated to the REO Financing process who are trained to identify issues before they become roadblocks. We specialize in working with all types of buyers, especially first time home buyers.

As both a national lender and servicer of over 400,000 accounts totaling over $70 billion, Nationstar Mortgage is uniquely qualified to support REO financing. We partner with thousands of realtors to list, sell and finance our own REO properties. We understand the importance that financing plays in selling REO properties as quickly as possible.

Bottom Line: Nationstar Mortgage has the strength, talent, programs and tools to help both you and your customers!

Nationstar HomePath Realtor Tools

Nationstar Mortgage understands how important HomePath financing is to your business and we’re here to help you be even more successful. Use these flyers to refer potential buyers to Natiosntar Mortgage to help control dead-end offers and move your HomePath listing quickly.

We also service over 400,000 accounts nationally totaling over $70 billion.

Want to become an approved listing agent for our REO properties?

LINK DIRECTLY TO THE NATIONSTAR REO LISTING PAGE

Step-by-Step Guide for applying as a Fannie Mae REO Agent:

1. Go to www.homepath.com/realestate.html
2. Scroll to the “Apply to Become a HomePath Listing Agent” button.
3. Read all instructions carefully.
4. Click REO Real Estate Brokers registration link
5. Fill out the form completely.
6. Receive the SAP login – this will arrive by email.  It does not guarantee that you are an approved REO agent
7. Round 2 for the application process includes a phone interview.  Be ready for this and don’t blow it!
8. If you’re given an opportunity to work with Fannie Mae, it’s important to know that they are watching and scoring at all times.  Your scorecard is what determines your future with Fannie.
9. If you are accepted, you’ll receive a “Vendor Packet”.  It will provide full instructions, contact information, and documents that you will need.
10. Receive a Vendor ID
11. Login information to AMN (the Fannie Mae portal)

TIPS to a strong application:

• Focus on helping the asset management team by reducing holding time, carrying costs, and overall management overheard.
• Emphasize your effective owner-occupied Cash-For-Keys abilities and techniques.
• Reiterate your thorough knowledge of the region, marketing statistics, Homeowners Association guidelines, local code enforcement guidelines.
• Membership of REO organizations, credentials & training, and continued education within the default servicing industry.
• Most importantly, don’t give up!  This process has taken some agents months and months to go through.  But, when you are accepted, the rewards are very good.

Are you ready for 2012?

2011 has been an amazing year for real estate, politics, Wall Street, Main Street, and every bit of real estate.  NFSTI has become a virtual social networking environment for default servicing experts around the country and has a long history in the REO arena.  Since the subprime mortgage meltdown NFSTI has become a one-man operation.  I (Dan) enjoy keeping NFSTI operating because of all the REO history that I’ve had, the experiences of traveling around the country doing 2-day seminars, participating the REO expos and conventions, and the great people I’ve met along the way.

My commitment to you is that I will continue to manage and monitor the system, add fresh content as it arises, and assist members however I can with their NFSTI membership accounts.  I hope that you enjoy the content and take it for what it’s worth.  The material within the Member Groups (DS Core, SEO, Social Media Marketing, and others) comes from real-life experience, research, and trials.  The content is not only my experiences (which I later built an entire enterprise around that still thrives to this day), but also the expertise of many colleagues, friends, coworkers, and experts from throughout the industry.

As a reminder, many memberships will be updating in January, February, and March of 2012.  Many members will be automatically charged the annual fee of either $25 or $50, depending on your membership level.  If you do not intend to renew your membership, that’s OK.  Please visit your PayPal or credit card account and discontinue the automatic payment.  Otherwise, simply enjoy your holidays and know that NFSTI will continue to strive for excellence in serving our members.

I wish you a very Happy Holiday Season, a Happy New Year, and all the best to you and your families.

Sincerely,

Dan Waterman

Yes, it’s true…over 10 million homes may fall into the foreclosure conveyor belt in the next 6 months unless the government takes more drastic measures.  Between homeowners being in default, properties currently in the foreclosure process, and the ever-popular shadow inventory, we’re looking at approximately 10.4 million homes in default.  If this were to happen our country would have 3 years of inventory on our hands given the current rate of liquidation.

Investors appear to be the answer to the governments dilemma.  When Congress asked housing experts how to trim back this massive inventory the answer they got back was “private investors”.  Rehab programs are looking like the wave of the future and could help our country climb out of debt.

What does this mean?

1. Get your hands on some asset management/REO accounts.  How do you do this?  WORK, WORK, WORK.  And, read the NFSTI DS Core Instruction Manual
2. Start networking in local investor groups.
3. Get educated on rehab loan programs.

For more information you can read this article:  10 Million more mortgages set to default, expert says.