REO Industry Day Q and A.pdf

Real Estate Owned (REO) Industry Day

Question and Answer

Question 1. Can we use our own attorney network for evictions and property threats?

Answer Yes, you can use your own attorneys. You will provide us a list of your attorneys to our national practice group and they will approve the attorneys.

Question 2. Are there cases where you have to go to the DOJ to go through foreclosure?

Answer Yes, DOJ handles for Foreclosures for national loans and then return to us. This is on the servicing side. Once finished with the foreclosure it will come back to us.

Question 3. Do you know your percentage of foreclosures? How many properties are taken?

Answer No, we don’t have the percentage. However, the VASP delinquencies will come to VA. We’re averaging 800-900 acquisitions a month. This is not a guarantee of volume, but can give you an estimate of what we’re currently averaging.

Question 4. Since partial claims will come back, do you think your liquidities will start lowering if they go to partial claims? Previously you stated you had 1000 REOs, and now you have 80.

Answer The low number was due to the National Pandemic Moratorium, so there weren’t any foreclosures. The one caveat to that is during the holiday season, typically right before Thanksgiving through right after the first of the year. The VA says nothing and there generally aren’t any foreclosures or evictions.

Question 5. Will relocation assistance be involved?

Answer Yes. Currently we are offering $3500 for relocation/”cash for keys.”

Question 6. As far as preservation work, I saw there is a flat fee. Is that reoccurring cut?

Answer Yes Question 7. Is there a methodology for as is repair strategies?

Answer That is for the contractor to suggest. You will include this in a BPA or appraisal whether it’s repaired or if we should consider reimbursable expense for capital repairs over a certain threshold before the VA has to approve the expenditure.

Question 8. Do you anticipate repairs?

Answer It’s dependent on the market. If the market shows repairs, then yes.

Contractor will suggest as is or repair.

Question 9. What is the inherently governmental functions (IGF) trigger like for REO?

Answer Any capital repairs over a certain threshold and demolitions are IGF.

There is a list in the PWS.

Question 10. Is an ATO required for the system?

Answer An ATO will be required.

Question 11. What if at time of inspection there are repairs that are guaranteed to exceed the not to exceed threshold (flooded basement, sump-pump needs repair, etc.)?

Answer That is an emergency repair and would be approved.

Question 12. Who orders the Title?

Answer We do not order a title because NPG reviews our title. Our national title group will review the title. The servicer will order a title and submit for review. Contractor can list before title. We may sell before you have the title, but you can’t warranty it before you have the title. If the lender requires a special warranty, then you’ll have to wait to get the title package.

Question 13. Would we be able to work with your team or whoever with title insurance, and things of that sort?

Answer You do the type of curative or work with the former servicer. If it’s not a marketable title, we will do a reconveyance and send it back to the servicer.

Question 14. Do you have a claims process to review a claim if the lender is trying to convey a property to you and it’s in terrible condition?

Answer It has to have value. If it comes to us and there is no value, we can’t recoup our claims money. We have a claims process to review and determine if it can be reconveyed. Fire for example.

Question 15. How are the acquisitions received?

Answer When they convey it back to us, we push it back to the contractor.

This is processed through the Valorie system. A transfer of custody.

Question 16. Are the contractors responsible for holding the original paperwork from the previous contract?

Answer No. However, you are responsible for retaining your records for government retention standards.

Question 17. What comes with the push file?

Answer Property address, full mortgage, hidden social, mapping data, etc. It’s based on the contractor’s system. If we know occupancy or vacancy, that may be included, but we don’t always know.

Question 18. Is there a standard format for BPO and appraisals?

Answer BPO’s no, but the appraisals, yes.

Question 19. There wasn’t a pricing sheet attached. What do you anticipate for pricing?

Answer This is up to the contractor to propose costs and breakout. Pricing and valuation are considered reimbursable

Question 20. Can we tell you what we think the price for the reimbursable should be for the appraisals and by area?

For the marketing plan, can we modify that by area as well as how we’ll do our pricing and our price reductions?

Do you follow the guaranteed pricing?

Answer For reimbursable appraisals and marketing plan, yes, it’s however you propose, since everyone might do it differently.

For the Guaranteed pricing, no we do not follow the guaranteed pricing. We do not require you to use the appraisers from the VA.

These are your appraisers.

The idea here is, your performance is based on what you propose.

You are not bound by our liquidation appraisal. We use the liquidation appraisal to pay the claim and complete tasks on the servicing side.

Once you receive it, you are scored on how you value the property, list it, and sell it. All the performance metrics are your own

Question 21. Is VA exempt from using the new appraisal form coming out in October?

Answer We do not know the answer to this, right now, but we will find out a post a response.

Question 22. What are the reimbursable timelines for utilities, etc.?

Answer We do not pay out reimbursements as we go. We expect an invoice 60 days after the property closes. This invoice will include all reimbursables. There are two invoices in total – the after sale invoice (60 days after closing) and a supplemental invoice at 90 days for any outlying reimbursables related to the property itself. This invoice does not include the sales closings (commission, etc.) which gets paid out at closing. That is not considered an invoice, it’s settlement.

Question 23. Does property preservation get paid out at 60 days as well?

Answer No, that is an upfront fixed fee and will be paid when the property is assigned to you. There are many activities tied to property preservation and are identified in the property preservation attachment.

Question 24. In case of emergency, like a flood, etc. If the costs exceed what was initially assigned, how is that paid? Is that a reimbursable?

Answer You will get bids (the number is dependent on cost) and submit it as a reimbursable. This is also based on your SOPs and what we approved when the contract is awarded. Additionally, each invoice has to have the supporting documentation/proof of payment for these costs.

Question 25. So, to clarify, if there are multiple reimbursables, we bill all at 60 days?

Answer Yes. All reimbursables are

Question 26. As far as advancements go on the servicing side, does that carry over to the REO?

Answer No. These are completely separate contracts. There could be two different vendors, one for each contract. Expenditures on each contract are different, so they will be completely separate.

Question 27. What is the delinquency rate?

Answer In the 50% range overall, not just the back-sheet.

Question 28. What are the average days from start to close not including evictions?

Answer ~170 days

Question 29. What is the invoice payment rate Answer 7 days.

Question 30. Evictions Answer We’re working to reset the standard to a much lower place than it is right now. Cash for keys is in the 20% range.

Question 31. What is the average historical sales price?

Answer ~$227K Question 32. Of the top 10 identified in the presentation how much does that represent?

Answer A little over 50% of the 4000 on the report. These are in the big areas and around where the bases are, Ft. Benning, Ft. Stuart, etc.

Question 33. Do you automate your properties? Or is that something we suggest?

Answer That would be something you would propose when planning and how you would do that.

Question 34. You expect the RFP to come out early FY27. Do you have a better date?

Answer This is our top priority, but we don’t have an exact timeline. It won’t be in the current FY, but it is our expectation for early FY27.

Question 35. Do you have a set commission you want to see?

Answer We typically see 6% but you can propose something different.

Question 36. Past Performance, is this 5 years? 3 years?

Answer We have not decided how many years at the moment, but we will have it identified in the solicitation.

Question 37. Can we have a combination of Government past performance, commercial, and CPARS?

Answer All information will be included in the solicitation.