| By :
Frank Patrick
REO Agents and Brokers Should Prepare for Huge Opportunity Lender Processing Services (LPS), the country’s leading provider of mortgage processing services and the company that most of the largest U.S banks rely on for data, says the boom in REO listings is very far from over. Kyle Lundstedt, managing director of LPS applied analytics, stated that the foreclosure crisis probably won’t be over until late 2013, when he spoke to 1600 people in the REO, mortgage and default servicing industry on August 18th. Using 15 years of data (from 1996-2010), Lundstedt looked at the housing market bubble and the impact of that bubble bursting. He also commented on the foreclosure timeline, which is becoming a longer and longer process, due to the sheer volume of REO homes that need to be dealt with. “Today, if you entered foreclosure,” said Lundstedt, “it would be 16 months before you got out. How many people think that is a good thing? It’s tragic.” He blamed some of those delays on well-intentioned efforts to help people keep their homes – even though, in many cases, it’s just putting off the inevitable and creating further obstructions to speedy processing. He also said REO professionals need to be prepared for the massive amount of listings that will continue to come on to the market. REO homes are some of the most sought-after values in real estate today, both by seasoned investors and first-time home buyers. Besides the current huge number of REO homes on the market, Lundstedt also pointed to the fact that home mortgages that are 90 days or more delinquent, in foreclosure, or already in REO, will continue to rise. “We are going to see delinquencies above today’s levels out into early 2012 if not late 2013. It suggests this problem is here to stay.” Adding to the incredible REO opportunity is the “shadow inventory” of foreclosures yet to be officially recorded on the books. Experts still disagree on the exact number of REO homes that fall into this category. Thomas Lawler, an economist and housing consultant, estimates that as of the first quarter of this year, banks owned $14.5 billion worth of REO properties. As banks aren’t required to report the number of homes they own that are on their books but not yet reported as foreclosures, an exact figure is hard to come by. “My best guess right now is that REO held by Fannie, Freddie, and FHA, and other government entities, and banks and thrifts is just under 600,000, but unfortunately it is on the rise,” says Lawler. Again, this means more and more REO agents and brokers will be needed by these financial institutions to handle these properties for them, making it an opportune time to become an REO agent and find out how to get REO listings.
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