The Five Star Institute, in partnership with NRBA (National REO Brokers Association), recently presented a webinar titled, “Are You Ready for the Next REO Spike?” as part of the Five Star Institute Webinar Series.
The Five Star Institute Webinar Series aims to broaden the horizons of the mortgage industry, serving as a source for complimentary insights and education about critical industry topics led by subject-matter experts and company sponsors.
Much has changed in the decade time span since the Great Recession and its corresponding REO wave. The webinar, geared toward servicers, lenders, asset managers, real estate professionals, and other REO professionals featured a panel of experts discussing the next wave of REO volume and just how prepared the industry is to handle this influx of activity.
A panel of experts from NRBA discussed some practical approaches to the strategic and operational elements that REO experts will need in order to master to process any increase in volume, while continuing to meet or exceed their clients’ satisfaction.
Speakers who took part in the event included Michael Krein, President, Executive Board of the NRBA; Michael S. Olszewski, VP, Executive Board of the NRBA; Shaylene Ernisse, Director, Executive Board for the NRBA; and NRBA Directors Sarah Lin, Kimberlee McClellan, Chris Nelson, Cliff Ponte, and Henry Vega.
NRBA Director Ernisse, the Designated Principal Broker of Keller Williams, LLC in Oregon, and Managing Broker of Keller Williams Olympic in Washington, assisted Moderator David Wharton, Editor-in-Chief of MortgagePoint magazine, by fielding questions from the audience.
Krein kicked things off, detailing the role the NRBA has played in the industry over the past 25 years, and how members of the group assist one another in trying times. As President of NRBA, Krein has personally listed and sold in excess of 25,000 single-family rental (SFR) units over the course of his career. He was the owner of numerous multi-office brokerage companies, both independent and franchised, including owning regions for national brands. He also serves as CEO of RIO Software Solutions, provider of RIO Genesis Software, and Managing Partner for House Karma, a digital ecosystem created to facilitate affordable homeownership and neighborhoods.
He described the association’s membership requirements, noting that “if you are looking to get into REO and have never done it before, I am going to tell you we are not for you. We only approve about 2% of applicants, which is about one in 50.”
While discussing the role REO plays in the housing ecosystem, the conversation turned to how REO brokers prevent homes from falling into shambles, combating blight, and protecting the values of homes around the surrounding area of the REO property, and the opportunities that lie within the REO space.
“An REO property is really a pot of gold,” described Olszewski, a 20-plus-year member of NRBA. “It’s a tremendous opportunity to stabilize a community, improve property values, and most of all, promote homeownership.”
Since 1997, Olszewski has sold more than 18,000 REO properties (residential and commercial) with sales reported in excess of $2.1 billion. He leverages state-of-the-art marketing for each of his properties to reach any and all interested parties, by providing property valuations, short sale work, eviction and relocation assistance, and property preservation services. He has working relationships with a number of cities and municipalities, including with the city of Chicago, for which he has been a court-appointed receiver charged with rehabilitating distressed properties for more than 15 years.
Nelson, a 23-year veteran of the real estate industry and Director on the Board for NRBA, continued, and described “The Broken Window Thesis” and how REO brokers can help remove that stigma from neighborhoods with dilapidated properties.
“It’s referred to as ‘The Broken Window Thesis,’” explains Nelson. “If you drive through a community, and all the windows are broken and there is litter all over the place, most people would draw the conclusion that this is not a safe and welcoming place. When we have the opportunity to come in and clean up a property that people have driven by, and that property on the block has been an eyesore, we can come in, provide some value, and change the way that looks.”
When gauging who exactly are buying REO properties in a challenging housing market, Vega, an NRBA Board member and bilingual REO broker with more than 25 years of experience in the space, spoke of his experiences throughout Southern California, including the Los Angeles Central Valley region, and a number of rural areas, as he specializes primarily in distressed assets, short pay, foreclosure prevention, and REOs in the region. He currently partners with numerous banks, GSEs, and private institutions for the disposition of REOs, and other assets. Over the course of his career, Vega has sold hundreds of commercial and residential REO assets.
McClellan, a Broker Owner/Operator in the real estate industry since 2002, addressed the topic everyday operations of an REO brokerage. Under her leadership, McClelland’s teams consistently manage high-volume production in multiple markets for HUD, GSEs, REO, REITs, corporate, outsourcers, hedge funds, short sales, retail residential, management for institutional and private clients. A Director on the Board for NRBA, she is an experienced resource for clients that count on her to implement process changes, participate in pilots, and deliver market-performance measures.
In a crowded marketplace with stiff competition, REO brokers are always leveraging new techniques and methods to stand out from the competition. Lin discussed how some social media techniques that REO brokers can utilize to capture new prospects and propel their business to the next level.
“If you can be all over social media, we encourage that,” explained Lin, who serves as a Director on the Board for NRBA.
A regular top producer in her community, Lin’s properties consistently achieve top-dollar values. Her multi-market expertise, strategic thinking, and commitment to excellence result in optimal results for her clients on a regular basis.
Ponte warned of the perils of learning the industry from unqualified sources. He noted that as REOs begin to uptick, there may be some offering education in the industry who truly lack the knowledge and are looking to make a quick buck. In addition to owning an iconic diner and coffee shop in Massachusetts, Ponte is a Real Estate Broker and Owner with a Keller Williams Franchise in Massachusetts and Rhode Island, and serves as a Director on the Board for NRBA. Leading one of the largest teams on the East Coast, Ponte has overseen more than $60 million in sales each of the past four years. A real estate and mortgage default veteran of more than 15 years, he is routinely recognized among the top-performing brokers in the country. Ponte has served his community as an Acting Mayor, as well as City Council President for four years.