Cartus Network® Asset Recovery Specialist (CNARS)

How to Maximize Your Success as a Certified CARTUS Network

Deed in Lieu Specialist

2010

Program Agenda• Overview of Deed In Lieu Plus (DIL+)• Contacting the Customer – 2 Critical Paths• Broker’s Price Opinion (BPO)• Program approval

o Client Approvalo Customer Execution of DILo Listing the propertyo Marketing the property

• Fannie Mae DIL acceptanceo Cash For Keyso Vacant Property Reporto Rekeying the propertyo Relisting REO

Cartus Asset Recovery Announces:Deed in Lieu Plus!

• Alternative to foreclosure for financial institutions• Property Deeded to investor by borrower =

Customer • Helps to eliminate expensive and adversarial

foreclosures• Cartus manages resale of the asset• Utilizes resources of the Cartus Broker Network

Benefits to Financial Institutions

• Saves costs of:– Foreclosing– Selling a distressed property at a low price– Extended property maintenance

• Removes a non-performing asset from its books– Reduces reserve capital requirements– Frees up funds for other investments

Benefits to the Customer

• Minimize adverse impact on his/her credit• Eliminate a stressful financial situation• Offers a means of transitioning to a more

affordable, long term housing solution• Faster transaction than awaiting foreclosure

proceedings

Benefits to the Broker

• New stream of referrals• Commission is paid at reasonable and

customary rate (5.5% - 2.5% - listing agent; 3% to buyer’s agent)

• The fee is 35% (paid on your split) • Cartus and the lender are backing an

aggressive strategy to sell and close quickly

Agent Requirements• Must be certified in Cartus Network Asset Recovery

Specialist (CNARS)

• Must be a full time residential Real Estate Agent

• Must understand the DIL+

• Must have strong influencing skills

• Must be able to provide an accurate and timely Broker Price Opinion (BPO)

• Must agree to follow the strict Fannie Mae operating procedures and complete all reports in the required timeframes.

The Deed in Lieu Plus Program• Cartus will obtain an independent Broker’s Price Opinion

(iBPO) and a BPO from Cartus Broker Network member• Cartus will complete a title search on the property• Cartus and Fannie Mae determine eligibility for program and

offer Customer Deed In Lieuhe property• Cartus will work with Network agent to list the property• Title passes from customer to Fannie Mae upon DIL

Acceptance• Cartus and Network Broker Market REO property to obtain

sale

Day 5 Initiation Process - Cartus offers Deed in Lieu (DIL) to Customer – or – Cartus orders Door Knock from Broker

Day 20 Customer approved for program

Day 25 Customer executes Deed In Lieu package

Day 45-60 Customer vacates property, Broker delivers Cash for Keys, Cartus re-lists property and begins REO Marketing

Day 1 Cartus receives authorization from client

Day 10 Customer provides verbal authorization to proceed

Day 10 Cartus orders Title Search, Broker BPO, and independent BPO

Day 20 Cartus notifies Broker to list property and obtain executed DIL

DIL+ Time Line

Initiation Process

Path One – Cartus Initiates Contact

Path Two – Door Knock Services (Agent Initiates Contact)

Cartus will receive authorizations from Fannie Mae for Customers identified as potentially benefiting from the program. There are two ways a Customer is initiated into the program.

Path One - Cartus Initiates Contact

• The ARC will: – Mail Customer Welcome Package– Review the program with the Customer– Complete Needs Analysis– Obtain verbal permission to complete a BPO – Place referral/order for BPO with Network Broker – Order independent BPO– Place Title Order

The Cartus Asset Recovery Consultant (ARC) makes several attempts to contact the Customer.

Path One – Agent Contact

• Assigned Agent to make contact with Customer and to complete BPO

• Use a positive, upbeat greeting to introduce yourself and your company

• Explain your role• Explain the BPO Process

Once ARC makes contact and obtains permission to proceed, they will place referral via Broker Center requesting BPO

Path Two – Door Knock ServiceThe Assigned Agent will make two attempts to make face to face contact with the Customer to introduce the DIL+ program. Assigned Agent will:

•Use a positive, upbeat greeting to introduce yourself and your company

•Introduce Cartus Asset Recovery, client and the DIL program•Determine if the Customer has an attorney already involved•Provide the Customer with the sample Fannie Mae DIL+ Customer Introduction Welcome Package (Handout 2)

Path Two – Door Knock Service• Utilize the DIL+ Agent Door Knock Scripting (Handout 3)• Ask permission from Customer to proceed • Provide background on Cartus • Highlight the benefits to the Customer of working with Cartus

1. No cost to Customer

2. Experienced Real Estate Agent

3. Dedicated Asset Recovery Consultant

• Customer to agree to move forward with program• Update your Relocation Department on the outcome Door Knock

attempts• Relocation to update ARC on outcome of Door Knock Service

Path Two – Door Knock Service

Breakout Opportunity: Break class into teams of 2 and have teams role play. Have one team member play the Customer, and the other team member play the agent. Utilizing the scripting the agent should approach the Customer to introduce the program, anticipate objections, and overcome those objections.

Obtain objective, expert opinion of the value and condition of the property

• Critical Function of the process– Critical in mitigating credit losses– Critical in setting marketing strategy– Critical in negotiating sales– Critical in measuring Cartus and Brokers performance

Broker Price Opinion (BPO)

MultiForms Software

• MultiForms is electronic forms software housing all Fannie Mae REO management documents

• MultiForms is required to service Fannie Mae REO properties and allows for auto upload into Fannie Mae’s asset management system

• Cartus will only request Brokers purchase the MultiForms software at the point of placing a referral

• Brokers obtain MultiForms by calling 800-235-1600

Broker Price Opinion (BPO)• The BPO provides critical information to setting the marketing

strategy for the property determine if the Customer and the home qualifies for the DIL program

• The completed BPO is due to Cartus within 3 days of the appointment date

• Agent submits BPO with digital photos of interior and exterior to Relocation Department

• BPO forms must be reviewed by the Relocation Department before sending to Cartus

• The BPO is not to be shared with the Customer

Key Components of the BPO

• Current Market Conditions• Subject Marketability• Competitive Closed Sales• Competitive Listings • Marketing Strategy• Recommended Repairs and Improvements• Market Value• Comments• Photos

BPO – General Marketing Conditions

•Reflective of current marketing conditions

•Provide any additional detail in the Comments section

BPO – Subject Marketability

• Pay specific attention to the Unit Type

• Provide any additional detail in the Comments section

BPO – Selecting Comparables

Relevant selection– 3 Sold Comps

» Most recent - sold within last 6 months– 3 Listed Comps

» Most recent– Properties should be similar

» Size

» Room count

» Amenities

» Age– DO NOT use REO properties unless they are

predominant

Adjustments are adequate– Consistent and reflective of market– Repairs indicated in separate section

Include at least one “As Is” and one “Repaired” comparable

BPO – Marketing Strategy

Opinion should be based on • Target buyer needs• “Dollar for Dollar” investment strategy

Other considerations• Owner-occupancy ratio• Under/Over improvement• Supply• Average Days on Market• Financing• Condition

BPO – Repairs

Include those repairs you recommend• Return property to “average marketable condition”

Itemize and provide cost estimates

DO NOT Include• Maintenance items• Debris removal• Landscaping• Initial clean

BPO – Market Value

Provide both “As Is” and “As Repaired” values

“As Is” market value should fall within the indicated adjusted value of the competitive comps

• State whether most weight is on the sold or listed comps

Range of values not acceptable

BPO - Comments

Be descriptive

Inform reader of nuances not covered elsewhere in the form

Common REO Environmental Issues

• Lead-based paint• Asbestos• Discoloration• Oil Releases

• Methamphetamine Labs• Bio-Hazardous Conditions• Drywall• Miscellaneous

Lead-Based Paint

Which action to take depends on factsPrimary Concerns

oChildren under 7oCourt OrderoMust Disclose

Asbestos

Which action to take depends on facts

Concerns o Friable asbestoso Location of the asbestos

Discoloration

Three Options1. Sell As-Is

2. Clean

3. Remediate

Primary Concernso More than 100 contiguous square feet

~ (remove lockbox/sign waiver & release)o Condo/shared wall situationo Must disclose - can’t disclose as “remediated” if only

cleaned

Oil Release

No Option/Must Remediate Primary Concerns

oReporting requirementsoNo further action letter from state, if requiredoThreatened litigationoState agency involvedoClearance from EBIoMust disclose

Methamphetamine Labs

Primary Concerns o Noticeo Remove lockbox/no entry until clearedo Don’t complete eviction/trash out until clearedo Must disclose

Bio-Hazardous Conditions

No Option/Must Remediate

Primary Concernso Potentially infectious material (PIM)o Hypodermic needleso Blood/suicides – murders

Miscellaneouso Marijuana Houseso Urnso Buried Bodies

BPO - Photos

Exterior and back of subject property

Include street scene

Interior photographs – all rooms

Point out issues or needs for repair

Exterior photographs of comps (both sale and listing)

Anything that may affect the market value

Assistance in prepping your BPO

BPO Checklist• Ensure all required

details are captured

Additional AssistanceBPO Completion Aid

Broker Price Opinion (BPO) Relocation Department Review

• Must be consistent with current market conditions• Fully explain any market changes in the last 6 months• Must be typed• Must be thorough – no blanks - use “n/a” if appropriate• Include the appropriate market time and associated

value as indicated in the initial instructions• Must include data that supports the most likely probable

sales price • Must support the anticipated sale price, not influence

from the Customer’s expectations or needs

Broker Price Opinion (BPO) Relocation Department Review

• The BPO includes recent (closed within 6 months) comparable sales that support value

• If closed comparable sales are not available, explain why• The BPO must include recommended strategies• The BPO must include support for recommended

strategies, i.e., if you do X, the payback would be Y.• The BPO must include 3 competing listings and a

discussion of the current absorption rate

Cartus notifies Broker to list property and obtain executed

Deed In Lieu (DIL)

In this section: • Customer Approved for DIL+ • Customer to Execute Deed In Lieu • Customer and Broker Execute Listing Agreement• Marketing the Property

• Negotiating a Sale pre DIL Acceptances

Customer Approved for Program

• Title Search complete and clear• Deed In Lieu sent by Title Resources Group

(TRG) to the Broker • Cartus will notify the Broker if the Customer

and house have been approved by the client• Cartus will instruct the Broker to contact the

Customer to list the home• Cartus will communicate the approved

marketing strategy to the Broker

Executing the Deed In Lieu (DIL)

• Deed In Lieu Package (Handout 11) sent by title company to the Broker

• Agent to set appointment to deliver DIL to Customer and list the home

• Offer assistance in helping Customer notarize DIL• Send executed Deed back to Title Resources

Group (TRG)

Listing Agreement

• Utilize local Listing Agreement• Executed between Customer and Broker• Must execute Broker Exclusion Clause

(Handout 12)

Marketing the Property

• Initial list price established by Cartus Asset Recovery Consultant (CARC)

• Enter into local MLS and provide copy of MLS listing to CARC

• Customer listed as Seller• Place lockbox on property and set showing

procedures with Customer• Place and maintain signage• Schedule a Brokers open house and a public open

house• Place Listing on all applicable websites

Marketing the Property

MLS and Website postings• Include positive comments to describe the

property• Do not refer to property as Bank Owned, REO,

Foreclosure, or Short Sale in the comments• Utilize appealing inviting words to describe the

property• Take multiple and good photos – minimum 6

Marketing the Property

Marketing Updates are due every 2 weeks from listing date and must include:

• Advertising efforts• Number of showings• Buyer feedback• Recommendations on marketing and pricing• Changes in property or market conditions

Marketing the Property

• Lawn maintenance, weed removal, shrub trimming, and snow removal as necessary

• Interior should be clean and uncluttered• Kitchen appliances, bathrooms, windows and

mirrors should be kept clean and sparkling• Working light bulbs should be in all sockets

Inspect the property once a week and encourage the Customer to make the property as appealing as possible. Recommend:

What if I get an Offer?

Customer should negotiate all offers to the fullest extent• Utilize local real estate contract• The sale must be made subject to review, approval,

and assignment to Fannie Mae• The Fannie Mae Assigned Real Estate Purchase

Addendum (Handout 14) must be included as part of the contract

• Must include any required disclosures• Fannie Mae’s Lead Paint Disclosure (Handout 15) if

built prior to 1978

Fannie Mae Acquisition

In this section:• Cash for Keys (CFK)• Re-Key • Vacant Property Report• Reimbursement Procedures• Supplemental Listing Agreement

REO marketing begins!

Cash for Keys (CFK)Provide financial relocation assistance to customer resulting in the following benefits:

•Minimize the high costs associated with the eviction process

•Expedite Fannie Mae’s ability to take possession of the property

•Encourage ongoing maintenance until vacate date

•Encourages the customer to exit the premises with more dignity and in the least confrontational manner as possible.

•Leave the property in broom swept condition

Cash for Keys Process

1. Deed in Lieu signed by Customer

2. Cartus will send CFK check to broker (made out to customer) 5-7 days before DIL contract vacate date.

3. Agent to set an appointment with the Customer on date of vacate

4. Agent to confirm property has been left in broom clean condition and completes the Vacant Property Report (Handout 16) walk through

5. Agent to have the Customer sign the Deed In Lieu Receipt (Handout 17)

6. Agent delivers CFK check once verified property is in broom clean condition

7. Relocation Department notifies Cartus property vacated and fax/email CFK Receipt to CARC with customer’s new address

Cash for Keys ProcessThis is not broom clean …

This is broom clean …

Re-Key Process Steps

• Coordinate with Locksmith to re-key the property at the vacate date if broom clean

• Place a combination lock box on the property• Locksmith costs will be reimbursed up to

$120• All locks should be re-keyed• Please utilize your areas standard lockbox

(i.e., electronic) for co-brokerage showings

Vacant Property Report

• To be submitted to Cartus within 7 days of vacate date• Provide photos of each room• Provide photos of all defects• Note overall condition of the property• Review and note personal property remaining• Note if property is in broom clean condition • Note if appliances are clean and in working order

Vacant Properties

• Verify all major systems are operational (i.e., heat/air conditioning)

• Pick up any residual mail or newspapers• Inspect property weekly• Notify neighbors

– Ask to keep an eye on the property– Contact you immediately if necessary.

• Make sure all windows and doors are locked.• Disconnect or unplug automatic garage door opener,

remove garage door controls from property.

Vacant Properties – cont’d

• Make sure pools are not accessible.• Having shades, blinds or coverings on windows

promotes appearance of occupancy• Check for signs intruders:

– Damaged shrubs or flowers– Cracked glass panes– Torn or misaligned screens– Visible tampering of doors or windows– Update internet listing and pictures as necessary.

Reimbursement Instructions

• Submit invoices for Door Knock Services to CARC1. Utilize the Billing Invoice (Handout 20) found in

CartusNetworks.com within 3 days of completing Door Knock service

• Submit Expense Reimbursement for Re-Key on the Monthly Expense Statement (Handout 22) found in CartusNetworks.com with in 3 days of Re-Key 1. Invoices and proof of payment must be included

to receive reimbursement2. Re-Key expense limited to $120

Supplemental Re-List Agreement

• Cartus will deliver supplemental listing agreement to relocation department including;1. Commission

2. Commission Split

3. Listing Duration

REO marketing begins!