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Purchasing REO Packages - Problems and Remedies Buyers, in their pursuit to purchase bulk REO packages and notes, come across many chains of intermediary brokers that know someone who can refer some other broker. Bulk REO properties are limited and selling consultants/brokers are numerous. Many of these intermediary brokers do not know their buyer or seller. Verified REO packages are not easily found as well as verified banks and REO sellers. A recent real estate dip has promoted real estate agents, investors, brokers and anyone with an email database of investors and email blast technology to become an REO broker overnight. Sales of these REO packages can range from 10 million to multi billions of dollars. Long broker chains of agents, investors and brokers are all looking to bring high dollar REO buyers to sellers so they can supposedly collect large commissions. Fraudulent brokered loans with changing variable rates are the driving force that promotes the present day foreclosure scenario. Due to predatory lending, bad loans were made to many people who could not afford to pay them back. Other depressed housing market factors, besides increased defaulted loans, include tightening lending regulations and fewer loans to feed buyers to purchase homes. During January 07 - January 08, over 100 mortgage companies, banks and credit unions have gone out of business. Over the last year, distributed media reports have highlighted sub prime lenders like New Century Financial and Freemont Bank that are going out of business, thus, feeding the fire for bulk asset lender liquidations. In between the buyer and the seller are long broker chains. These intermediaries are hesitant about releasing information about their selling and buying sources and communication to the seller is blocked. It is hard for buyers to speak to sellers to accomplish a simple sale. Many times sales exist on misinformation. To make the situation harder, buyer's funds are not easily proven. Sellers are not easily verified as true sellers. And most important, buyer's financials are exposed to multiple intermediaries with the possibility of having orders shopped to more than one unverified source. Many buyers set themselves up for failure from the start by sending multiple purchase requests to different broker chains. Many selling sources/banks will not work with them thinking the buyer is "shopping" for better prices when they can barely find verified product to begin with. Finding product can be a vicious circle. Buyers should
beware of sellers. For the buyer it is like finding a needle in the
haystack. Buyers must be direct or as close to the banks as possible
to purchase affectively. Buyer's proof of funds and personal
information should be confidential and guarded. Buyers should keep
their credibility intact and orders carefully limited to prevent
sellers from identifying the buyer as a shopper who can't make a
decision to act when the time really comes. Buyers should look for
spreadsheets (tape) of product that are exclusive to the sellers.
Verified tape that is exclusive is rare but can be found. The buyer
needs to make sure the tape is not shopped through multiple email
brokers. Only then will the buyer have the opportunity to purchase
product without confusion. The final way to purchase is to find a
selling entity or bank that can provide tape, then do a "custom
order". This will be the second way you will you get exclusivity to
your purchase with no other buyers competing for the same
product. Good Luck! |