property deals require
Mortgage brokers and origina- tors who work with prospec- tive real estate owned (rEO)
property buyers should know what has
been done with these homes before
they go on the market. a property’s
maintenance can vary with servicers’
desires, the home’s location and how
long the property is expected to be on
the market. by understanding these
maintenance issues, brokers can be
sure that clients get the home they desire — and that financing isn’t stalled
because of appraisal problems.
The best perspective on these
issues may be held by the property-maintenance specialists hired by servicers and the listing real estate agents.
by partnering with these professionals,
brokers can ensure that their rEO deals
One challenge with an rEO property
is to make it fit in with the surrounding
area, while being an attractive standout. There should be no odors of mold
or cigarette smoke, and any prominent
stains on carpeting should be cleaned.
The interior should have a fresh smell,
even if from air fresheners, as long as
they are not overpowering attempts to
mask musty or moldy odors. These are
red flags for prospective buyers.
When an rEO property is on the market, servicers ultimately decide what
is done to the property based on the
amount of money they want to invest in
the home. There are multiple solutions
for these problem properties. Property-maintenance professionals often give
options based on price, outcome, and
both short- and long-term impacts.
When there is mold, remediation
paths are reviewed. Some servicers like
to have spot cleaning done; they’re not
interested in a full remediation if they
are aware the property is going to sell
in an as-is condition. Others want a full
remediation so mold does not come
back. Originators, their appraisers and
potential purchasers need to determine
which path was taken.
another thing to examine is the main-
tenance of the property’s yard. first
impressions come from the front yard
and entranceway, which should look
appealing to potential buyers, lenders
and appraisers. a property should ap-
pear welcoming on the outside not only
when it is newly marketed, but also
when it has been on the market for a
month or more.
The lawn and the home’s exterior
should be well-maintained and other
actions should be taken to make sure
that the property is still up to par, espe-
cially for those that remain longer on the
market. Such properties may need a bit
more attention because they are often
in mortgage-stressed neighborhoods.
another issue to monitor is whether
a home has been winterized. Typically,
these are expenses that servicers try to
avoid, especially if the property is being
readied for marketing in spring, sum-
mer or fall. for potential buyers, their
lenders and the properties’ appraisers,
these steps must be taken when winter
is approaching, however.
By Suzanne Ball
America’s InfoMart Inc.
There also may be liens, fees and
fines imposed on an rEO property.
These often are the result of code violations or emergency work performed by
These should be resolved by the
time the home is marketed, but that is
not always the case. Often they can be
cleared simply by bringing a home up to
code, after which fines and fees may be
reduced. Municipalities’ major concern
is maintaining the value of rEO homes
and other homes in the neighborhood.
They especially want vacant properties
sold and occupied. Mortgage brokers
and originators must ensure that there
no longer are any liens, fees or fines levied on a home before purchase.
by working closely with property-preservation professionals, mortgage
brokers and originators can uncover
any potential issues with a property
and ensure a successful rEO sale. •
Suzanne Ball is president of america’s
InfoMart Inc. in allen, Texas, a nationwide
field-services company that provides
property preservation, inspections and real
estate services to the mortgage industry
throughout the U. S. reach ball at (972) 727-
9500 or suzanneball@aimyour way.com.
By Elizabeth Karwowski
Get Credit Healthy Inc.
3 New Types of Consumer Credit Notifications
Familiarize yourself with new notices and help clients better understand their credit
In order to demystify the business of credit for consumers, this past summer the board of Governors of
the federal reserve System introduced
new notification rules. Now consumers
will have broader access to information in their credit file, allowing them
to check and correct any recorded inaccuracies while also understanding why
those inaccuracies occurred.
although these changes were made
with the consumer in mind, mortgage
originators should make themselves
familiar with the changes as well. Stay
up-to-date and learn about these new
types of consumer notifications:
1. Credit Score Notice
When some consumers apply for credit,
they’ll now expect a Credit Score Notice
to be received. This document lists the
consumer’s credit score and outlines
how it compares to the scores of other
individuals who are applying for the
same type of loan.
Lenders need to provide this notice
to all applicants regardless of the type
of credit being sought. If a consumer
doesn’t have a credit score, the notice
from the lender should include the
name of the credit reporting agency that
has no score on file for the consumer.
2. Adverse Action Notice
If a consumer’s credit score is reviewed
and subsequently declined, that consumer will need to receive an adverse
action Notice. The contents of this document include the consumer’s credit
score and any pertinent information related to that number.
Should inaccuracies be found, applicants have the ability to check their
scores and dispute the information
with the credit bureau. These inaccuracies can include any of the following:
• incorrect personal information
• tradelines and collection accounts
• payment history
• information recorded as public
• mixing of files and identities of
• re-aging of debt
• information still on file that’s past
the statute of limitations
3. Risk-Based Pricing Notice
If consumers feel that they’re being offered new credit less favorable than
that of other consumers applying for
the same loan, it’s incumbent upon
lenders to send their clients a risk-based Pricing Notice.
This notification alerts consumers to
the possibility of inaccurate or disputable information in their credit files. an
investigation resulting in the removal of
inaccurate information can save consumers money while also making it easier to
acquire credit on more favorable terms.
a lender also must send an account
review risk-based Pricing Notice to a
consumer who has an existing credit
account where the annual percentage
rate is increased by the lender upon review of the credit report and score. This
notice delineates the factors used in
determining the rate increase in order
to make it easier for consumers to understand why their rate has changed.
• • •
all of these new notifications are in-
tended to allow consumers to check
the accuracy of their reports and better
enable them to respond to the credit
reporting agency should any changes
Elizabeth Kar wowski founded Get Credit
Healthy Inc., a consumer-advocacy organization, to help individuals improve their credit
health. She has fICO and fair Credit reporting act certifications. Get Credit Healthy has
been featured on NbC and fox News and
has helped hundreds of people restore their
credit. In 2010, Karwowski began volunteering as a counselor with S.C.O.r.E., a nonprofit
resource partner with the U.S. Small business
administration. reach her at (877) 850-3444,
ext. 1, or email@example.com.