REO Basics
A Training Seminar
Presented by
• This Presentation Will Cover the basic “need to
know” items in an REO transaction from contract
to closing
• We’ll address issues and problems throughout
the transaction and after close
• We will NOT address specific seller issues
• Goal is to give all involved parties a better
understanding of how they can service their
customer better to provide for a smoother
transaction for all
Why REO?
• % of current sales/listings
• Held inventory
• Cash buyers
• Investors
• First Time Home Buyers
Why West Title?
• In down economy and challenging market
West continues to grow
• FNMA Preferred Vendor
• LPS Asset Management Services “2009
National Title Vendor of the Year”
• We do not have “contracts” with our
sellers, they choose us more often
because of our expertise, experience and
customer service.
Outline of Presentation
• How Property Becomes REO
• File Process
• Purchase Agreements and Addendums
• Code Violations, Assessments, Water & Utility
Bills
• Title Commitments and Final Policies
• Legalities of What Title Does and Doesn’t Cover
• Closing and Closing Costs
• Questions and Comments
• How Property Becomes REO
– When Property is Transferred
– Who orders Title
– What else Title Company does
• Overview Of The File Process
– Seller Orders Title
– REO Addendums Often Name Preferred Title Company
• Preliminary Title
• Transaction Completed Quickly
• Funds
• Cost Savings
– MN is Buyer’s Choice State
• Determines if Seller Will or Will Not Pay
• New Disclosure Laws for All Loans
– Other Seller Requirements of West Title
• “Behind the Scenes” Responsibilities
– “Preferred Vendor” Status
Purchase Agreements and
REO Contracts
• REO is Different Than Traditional Sales
• Important to Read & Understand Addendum
– FNMA addendum included in handout
• Addendum Supersedes MN PA
– Sets Final Terms
– Changes Responsibilities & Obligations of All Parties
REO Addendums:
– Purchasing Property “As Is, Where Is”
– Sets Closing Date, Penalties & Closing
Agent
– Allocation of Closing Costs & Pror