The REO landscape is not what it used to be six years ago at the height of the foreclosure wave—and many will say it is not the same as it was even two years or a year ago.
The best in the REO space gathered on Tuesday for the REO Lab at the2016 Five Star Conference and Expo to discuss ways to survive and grow business in the evolving REO landscape, which has seen volumes decline to just a fraction of what they were in 2010 when foreclosures peaked.
A standing room only crowd listened as experts provided insight on how to best take on the new REO marketplace, covering such topics as better branding your company in front of asset managers, servicers, and investors, developing a well-thought out business plan to increase listings, asset management, diversification and converting leads to listings, becoming indispensable, using technology to expand your business, and alternative disposition. The lab was co-directed by Mercedes Henriksson, Director of Loss Mitigation with Fannie Mae, and Lisa Shepherd, Executive Director of Property Preservation, Assero 24. The host of the lab was Jon Miko, CEO of Alacrity Services.
“The market has changed and real estate has changed,” Henrikkson said. “A lot of the folks here at the Five Star Conference, the majority of their business is concentrated on REOs, so when you see that inventory decline so drastically, it’s scary for them. Part of it is reinventing what they do to do it better, and the other part is looking and finding other channels for disposition of properties that they can become part of, whether that be the auction space, whether that be the HECM space, whether that be the single-family rental space. To some of those folks, those were new opportunities, and that’s what they’re looking to do—in some ways replace some, if not all of what they’ve lost on the REO side, with something else.”
The lab included an update on Fannie Mae from Mark Arnold, Sales Director with Fannie Mae; an update on the Residential REO Market from Mary Best Brill, managing partner, U.S. REO Partners; meaningful data analytics in an Equator update from George Roletter, VP digital products and marketing, Equator; outsourcing, asset management, and mortgage servicing solutions in an update on VRM Mortgage Services from Brandon Kirkham, SVP of business expansion, VRM; and an REO update from Sharon Bartlett, executive director of industry relations with the Five Star Institute.
“I think that people are realizing the market may shift again, and if you’re ahead of your game and paying attention now, if it shifts, and your knowledge is there, you’ll be able to handle that industry, I think REOs will come back—not the way they were when the market shifted in 2008, 2009, and 2010,” said Joyce Essex-Harvey, an agent with Coldwell Banker Residential Brokerage and one of the speakers in the lab. “But I think the inventory will go up in a year or two. Property values, at least where we are (in Los Angeles), have jumped so high in the last two to three years—in some places, 20 percent in a year. When you have that kind of shift that quickly, usually there has to be some kind of adjustment. You can tell already in the really high end in Los Angeles that it’s slowing down a little bit, and sometimes that’s an indicator that it’s shifting a little bit.”
Speakers included (in addition to those listed above) were Garrett Mays, RES.NET; Chris McMahon, REO Management Solutions; Rebecca Smith, Green River Capital; Steve Salimbas, Allyconnect; Carla Ulufanua, LRC Asset Management; Rochelle Jones, Alta Realty Company; Erica Jade, Realty One Group; Clay Lehman, Resolute Asset Management; Michael Harris, Exceleras; JP Ackerman, HouseCanary; Shawn Miller, Hudson & Marshall; Tyler Smith, Wells Fargo, Rick Sharga, Ten-X; and Ted Weinstein, Castle Rock Realty Group.
“The biggest thing overall from the presentation is the diversity that an agent needs to have now,” said Lisa Shepherd, Executive Director of Property Preservation, Assero 24, and lab co-director. “That’s really the theme we’ve heard across the last couple of days. REO agents need to be more diverse. In the past, REO agents have focused solely on REO. Now you’re hearing a lot more about REO agents doing more in the property preservation space, you heard a lot about reverse mortgages, a lot more about auctions, so they’re really almost re-invented themselves.”