nlb training
TRANSCRIPT
7/12/2011
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Presented By
Cynthia Leek ClevelandOutreach Marketing Manager – Ofori & Associates, REO
www.oforireo.com1
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This presentation is being conducted by Ofori & Associates, REO and is intended for sole use of the Ofori Neighborhood Listing Broker network. The intended users are Ofori & Associates personnel and approved real estate listing brokers and sales agents in the Ofori Neighborhood Listing Broker network. Information in this presentation is subject to change at any time by the Ofori Quality Control staff.
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Presentation Format
} Questions will be answered midway and at the end of the presentation.
} To ask a question, click the “Ask Question” button on your screen.
} For Audio/Technology questions, click on the “Help” button.
Supporting Material
} A copy of this PowerPoint presentation.
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} Highlights of M&M III Changes
} Where HUD Properties Come From & Where to Find Them
} Who Can Buy and Sell a HUD Home
} Roles & Responsibilities of an Ofori Neighborhood Listing Broker (NLB)
} Broker Registration Process
} HUDHomestore.com
} Bidding Process
} Preparing & Submitting the Contract
} The Closing Process
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} Separate contractors responsible for property management and marketing/sales
} One web site for everything - HUDHomestore.com
} New Broker registration process
} New Commissions – 50/50 Split for Listing Broker and Selling Agent (up to 3% each)
} Exclusive owner occupant bid period changes
} Earnest money submitted with the contract
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HUD HOCS
Asset Managers
HUD Designated
Closing Agent
Field Service
Managers
MortgageeCompliance
Manager
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} Performs a variety of pre and post conveyance services to protect HUD’s interests.
} Reviews the title package to ensure that the title is clear of any known encumbrances.
Mortgagee Compliance Manager (MCM)
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} Contractors that provide property maintenance and preservation services such as:� Perform Initial Cleaning
� Conduct Inspections
� Secure Properties
� Conduct Routine Maintenance and Repairs
� Contact to activate utilities
Field Service Manager (FSM)
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} Markets and sells HUD properties
} Selects Neighborhood Listing Brokers and assigns Listings
} Reviews all bids submitted through HUDHomestore.com
} Serves as your main contact in every HUD sale
Asset Manager (AM) (i.e., OFORI, PEMCO, HOMETELOS)
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• Newest Asset Management Contractor selected by HUD to market and sell its single-family homes.
•Ofori & Associates, PC is the parent company ofOfori & Associates, REO
• Ofori & Associates, PC was established in 1991as a CPA and management consulting firmin Washington, DC.
• Offers a full scope of accounting, auditing, financial, computer design and automationsupport services to a wide range of clients.
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Atlanta, GA
For Contract Areas 1A & 2A
2000 RiverEdge ParkwaySuite 300Atlanta, GA 30328
770.955.5880
Hartford, CT
For Contract Areas 2P & 3P
10 Columbus Blvd.3rd FloorHartford, CT 06106
860.246.7700
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Ofori Contract Areas Include: 1A, 2A, 2P, and 3PTotal: 25 States, plus Puerto Rico and USVI
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A HUD-owned property. . .
} had a FHA insured loan,
} was foreclosed by the lender,
} lender transferred ownership to HUD in return for payment of the insurance claim.
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Øwww.oforireo.com- Listings & Bids- Property Listings & Bid Results- Click on State- Search by city, zip code or Property Case Number
Øwww.hudhomestore.com
ØMLS
HUDHomestore.com is the FINAL word!
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You can click on the state or use the “Search” function to locate HUD homes.
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• Myth: HUD will pay for you to totally remodel and update your HUD Home.
• Fact: HUD Homes are
SOLD AS-IS16
• Myth: HUD Homes are low-end housing.
• Fact: HUD homes are available in a variety neighborhoods, condition and prices ranges.
• Myth: HUD Homes are not worth the low-end housing.
• Fact: HUD homes are offered at fair market value based on a recent appraisal.
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ü HUD does not make or offer warranties or guarantees on a property.
ü HUD will not make any repairs to the property after the property has been deemed safe secure and marketable.
ü Buyers are strongly encouraged to get independent home inspections.
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1. Owner-Occupants
2. Investors
3. Government Agencies & HUD Approved Non-Profit Organizations
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• Owner Occupantsq Given priority during certain bid cyclesqMust occupy the house for 1 yearq Cannot participate in future HUD sales for 2 years
• Investorsq Cannot bid until Day 31q No restriction on purchase quantity
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• Government Agencies & HUD Approved Non-Profits
q Programs designed to stabilize and revitalize communities by offering special incentives to home buyers.
q The Good Neighbor Next Door (GNND) program offers firefighters, EMTs, police officers and teachers significant discounts for purchasing homes in in designated revitalization areas.
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• HUD offers 50% discount off of the list price to eligible buyers.
• Buyer cannot own another home for one year after closing.
• Buyer must occupy home as primary residence for a period of 3 years.
• Eligible participants must work in the same area as the location of the home.
• Properties must be located in HUD designated revitalization areas.
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• Buyer must bid 100% of the list price.
• Can utilize any type of financing or cash deal.
• When using FHA…• Buyer must qualify for entire contract amount prior to discount• Can finance into mortgage all reasonable and customary
closing costs
• HUD will not pay any closing costs or real estate commissions.
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Ø Special incentive program to sell HUD foreclosedhomes for owner-occupants only.
Ø Available to owner-occupants who qualify for FHA financing.
Ø Property does not have to be in a revitalization area
Ø Buyer must live in the home as primary residence.
Ø Excellent program for first-time homebuyers.
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Ø Market and sell Ofori property listings;
Ø Real estate professionals who know the communities they serve well;
Ø Act as Ofori representatives in the community; and
Ø Partner with our Outreach Marketing Team to organize and present community outreach programs.
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Core NLB Roles & Responsibilities . . .
An Ofori NLB is expected to have:
ü Experience in listing single-family homes
ü Extensive knowledge of the neighborhood of the listed homes
ü An office in close proximity to the listed home.
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Core NLB Roles & Responsibilities. . .An Ofori NLB shall provide and maintain:
ü At all times, Monday – Friday from 8:00 AM – 5:00 PM, a designated administrative person to take listings assignments, issue timely performance of required tasks and track the progress of listings, contracts and closings.
ü At all times, 7 days a week, from 8:00 AM – 5:00 PM, a licensed real estate agent available to accept calls from interested parties and other real estate agents and give appropriate information on all listed homes.
ü A designated administrative person to respond to emergency calls at all times, 24 hours a day, 7 days a week
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Core NLB Roles & Responsibilities (Cont’d) . . .
ü Prepare Broker Price Opinions (BPOs) and input it in Ofori’s database within 48 hours of listing assignment.
ü Enter listings into MLS and other advertising and marketing media
ü Complete 3 key inspections: § Initial Inspection Report within 24 hours of assignment§ Ready to List Inspection Report, and § Ready to Close Inspection Report (not sooner than 5 days prior to closing).
ü Answer inquiries relating to the listed properties
ü Perform all other customary duties required from the listing date until post closing.
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Property Valuations: Preparing the Listing Broker Opinion
• Comparable Sale and Listings Selection Criteria• Similar Property – style, age, type of property, site, condition, etc.
• Close Proximity – within subdivision and/or up to one mile depending on market (i.e., urban, rural, etc.)
• Recently Sold – within 6 months or within 90 days for declining market.
• Adjustments• Market Driven
• Based on value not cost
Ofori NLB Scope of Work Highlights
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Ofori NLB Scope of Work Highlights
Tips to keep in mind when preparing property valuations. . .
Ø Basement area does not count as gross living area (GLA)
Ø Bedrooms and baths in basement are not included in the bed/bath count
Ø Similar properties include type of property. (Ex., comparable sale selection for manufactured housing should only be other manufactured houses in most cases.)
Ø FHA REO Appraisals are valid for 120 days from effective date of appraisal for lending purposes. If the M&M Contractor’s Appraisal has expired, the lender is required to request a new one and the borrower may be charged for a new FHA “As-Is” appraisal.
Ø Ofori & Associates does not provide updated appraisals for lending purposes.
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For a full description of Ofori NLB Roles and Responsibilities and
Scope of Work, go to www.oforireo.com
and click “Brokers” tab.
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Ø Go to www.oforireo.com• Click on “Brokers” tab.
- Click on “Neighborhood Listing Brokers” forregistration link.
Ø Read the instructions.
Ø Complete the forms.
Ø Send to Ofori.
Ø Can take up to 30 days to process.
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Ø Go to www.oforireo.com• Click on “Brokers” tab.
- Click on “Neighborhood Listing Brokers” forregistration link.
Ø Read the instructions.
Ø Complete the forms.
Ø Send to Ofori.
Ø Can take up to 30 days to process.
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Note: Currently not accepting new NLB applications, however this is how the process works . . .
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Procedures Neighborhood Listing Brokers Industry Meetings Closing Agents Forms
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NAID = Name Address Identifier
Ø To apply, go to www.hudhomestore.com; send your completed package to the area HOC for processing – not the AMs.
Ø If you are an Agent and don’t know your NAID number, ask your Broker.
Ø If you are a Broker and don’t know your NAID, click on the “Check Current NAID Registration” status button and enter your company SSN/EIN or call your HOC.
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ØYou must have a NAID in order to submit bids.
ØAllow sufficient time to process your NAID application; it could take 4-6 weeks.
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FHA Loan Financing CodesCode Description
IN Insurable Appraisal indicates the property meets 203b minimum property requirements (MPR), finance requirements, no obvious repairs necessary.
IE Insurable with Escrow Property eligible for 203b FHA loan; necessary repairs total less than $5,000.
UI Uninsurable Appraisal indicates property does not meet minimum property requirements (MPR) and/or requires more than $5,000 in MPR repairs.
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• Any licensed real estate agent can show any available HUD property.
• HUD registered listing brokers or selling brokers may advertise HUD properties and hold open houses. However you must first gain approval from the appropriate Asset Manager to do so.
• All brokers and agents must adhere to advertising and showing guidelines.
• Non-compliance could result in your brokerage’s NAID number being suspended!
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• All agents must sign-in when showing a property.
• All advertising should be done in a professional ethical manner.q Do not destroy, damage or remove the advertising
signage of another HUD-registered selling or listing agent on a HUD property.
• Do not false advertise by implying that you or your company is HUD or a division of a Government entity.
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• Do not refer to HUD properties in a negative manner (i.e., “Distressed”, “Foreclosed”, “Must Sell”, or “Repossessed”).
• Acceptable References to HUD Homes include…“HUD-Owned”, “HUD Acquired” or “For Sale”
• Only an Ofori NLB can place signage in an Ofori property’s yard.
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• Do not refer to HUD properties in a negative manner (i.e., “Distressed”, “Foreclosed”, “Must Sell”, or “Repossessed”).
• Acceptable References to HUD Homes include…“HUD-Owned”, “HUD Acquired” or “For Sale”
• Only an Ofori NLB can place signage in an Ofori property’s yard.
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An example of Incorrect Yard Sign
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Acceptable Yard Sign
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Acceptable Yard Sign
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• HUD Homes can be purchased by any qualified buyer. Decisions are not based on: race, color, religion, national origin, gender, handicap (mental or physical), sexual orientation, familial status or disability.
• Always adhere to federal, state, county city and real estate commission advertising regulations as well as the Truth in Lending Act when advertising HUD listings.
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Ofori & Associates, REO
www.oforireo.com | 877.331.4391
Q & A
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} Go to www.hudhomestore.com
} Print the confirmation page.
} Ensure that the information on the bid sheet matches what is entered on the contract.
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How much $$ is needed?
} $500 if sales price is $50,000 or less
} $1,000 if sales price is over $50,000
} 50% of Listing Price for vacant lots
} Earnest Money forfeited or refunded in whole or part for failure to close.
Earnest Money
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What to do with the money?} Funds are to be submitted with the contract.
} Funds need to be in the form of a cashiers check, certified check or money order made payable to: HUD
Earnest Money (Cont’d)
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} IMMEDIATELY Notify Ofori when a deal falls apart!
} NEVER allow anyone to perform any work of any kind before closing!
} DO NOT give a HUD key to prospective purchasers or inspectors.
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NO REPAIRS BEFORE
CLOSING!
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COMPLETE THE CONTRACT
FIRST!
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Properties list daily!
Ø Lottery Properties – 7 calendar days for special buyer types (ex., GNND, HUD Approved Non-profits & Government Agencies)
Ø New Listings§ Insurable & Insurable with Escrow
o 30 Days - Exclusive Owner Occupant Bidding- 10 Days - Sealed Bidding- 20 Days – Daily Bidding
(Opened simultaneously)
o All Bidders allowed on Day 31
§ Uninsurableo 5 Days Sealed Exclusive Owner Occupant Bidding o All bidders allowed on Day 6
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Go to:www.hudhomestore.com
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To check results, go to www.oforireo.com- Listings & Bid- Property Listings / Bid Results- Choose State- Real Estate Agent Corner, Click “Bid Results”
When are bids opened:- If your bid is listed in “Bid Results”, Ofori must receive the completed
contract and all addenda within 2 business days of the announcement.
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DO NOT BE LATE!
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THE CONTRACT
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123-123456John Doe and Mary Doe
123 Main Street, Any City, Lake County, State
John Doe and Mary Doe 100,000
1,000
HUD or Closing Agent Payable to HUDX
3,00097,000 360
3,000 (not to exceed 3%)
3,000
91,000
The Contract
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X
3,000
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X
45
XX X
JD
John Doe xxx-xx-xxxx Mary Doe xxx-xx-xxxx 201-555-6789 02/25/2010
XYZ Realty, Inc.234 Main Street, Anycity, ST 22222
55-5555555 XYZRLTY5555
555-222-5555
MD
XYZ Closing Agent, Inc.
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123 Ofori Lane, Your Town, USAJohn Doe & Mary Doe
Donald TrumpJaneMcKay
• Review your contract package to ensure everything is correct before submitting it.
• Feel free to contact the NLB assigned to the property to ask questions you may have before sending in your contract package.
• The role of an Ofori NLB is the help ensure that contracts get submitted correctly the first time.
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Forms can be downloaded from. . .
www.oforireo.com
Ø Sales Contract Forms fillable in PDF format
Ø Most required Addenda
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Atlanta, GA
For Contract Areas 1A & 2A
2000 RiverEdge ParkwaySuite 300Atlanta, GA 30328
770.955.5880
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Hartford, CT
For Contract Areas 2P & 3P
10 Columbus Blvd.3rd FloorHartford, CT 06106
860.246.7700
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If you use overnight delivery service. . .
ØKeep the air bill or tracking number.
ØTrack delivery progress on the delivery service company’s web site.
Ø If you have tracking problems, call the delivery service company to verify delivery.
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DON’T PANIC!
GET YOUR TRACKING NUMBER ANDCALL OFORI BEFORE THE DEADLINE!!!
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Correction must be received within
24 hours!
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Ø OFORI, as HUD’s representative, keeps the original.
§ A copy is sent to the Sales Agent.
§ A copy is sent to the NLB to add info. to MLS.
§ A copy is sent to the Closing Agent.
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Ø Ofori sends a letter with the contract indicating who the Closing Agent will be.
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Ø Closing Agents are under contract with HUD, with contractual obligations and restrictions.
Ø Don’t ask to change names, extend closing dates, etc. without documentation and Ofori approval.
Don’t Ask Closing Agents to do what they are not supposed to do!
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Ø Contact your local Ofori office for specific requirements.
Ø Write “Amendment” on the top of the contract (9548) or addendum:
- state what the contract currently says,- state the requested changes, also - include the phrase “All other terms to remain the
same.”
Ø The document MUST be signed by everyone involved in the transaction (i.e., Broker, Agent, ALL Buyers, etc.)
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Ø Send the document with the proposed changes to Ofori.
Ø Ofori will:1. Review the request,2. Sign the document, if approved, and3. Send copies to both the Broker and the
Closing Agent
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IMMEDIATELYafter the need for the change is
identified!
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Closing Timeframe
All sales are expected to close within
45 days (For all contracts in 2P and 3P)
(Line 9 of the contract)
after the date Ofori signed the contract.60 days for 203K FHA Loans (For 1A and 2A)
But things happen sometimes . . .
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Extension Requests
Send to Closing Agent . . .Ø The “Request For Extension of Closing Date” form
Ø The appropriate documentation
Ø The Closing Extension Fee
BEFORE THE CONTRACT EXPIRES!
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Extension Requests (Cont’d)
• Ofori & Associates, as HUD’s Representative, may grant an extension of closing time in increments of 15 days.
• Extension Request and all supporting documents need to be to HUD’s Closing Agent no later than 48 Hours prior to expiration of the sales contract.
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Contract Sales Price Extension Fee Cost Per Day
Equal to or less than $25,000
$150.00 $10.00
$25,001 to $50,000 $225.00 $15.00
Over $50,000 $375.00 $25.00
Some Approved Fees Waived.
On Day 46
WITHOUT AN APPROVED EXTENSION, THE CONTRACT IS DEAD!
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Effective April 1, 2011 HUD is offering a broker bonus to selling brokers for properties that close in:
• 30 calendar days of the date the Sales Contract is executed for properties in Georgia
• 40 calendar days of the date the Sales Contract is executed for properties in Illinois and Indiana.
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$500 Bonus for Sales Price Between$25,000 and $75,000
$750 Bonus for Sales Price Between $75,001 and $150,000
$1,000 Bonusfor Sales Price of
$150,001 and Above
The following conditions must be met in order to receive the broker bonus:• Preliminary bid must be submitted on or after April 1, 2011
• A loan or commitment letter from lender must be submitted with the sales contract if purchase is to be mortgaged, or if paying cash, a certification letter from a financial institution stating sufficient funds are available to complete the sale.
• The words “ Broker Bonus” must be written or typed at the top of the signed Sales Contract.
• The selling broker must complete and sign the HUD Notification regarding the broker bonus sales initiative.
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ü Contact the FSM prior to doing inspections.
ü Encourage homebuyer to get an independent home inspection within first 15 days after contract ratified.
ü Check our web site REGULARLY for news and important messages.
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Ofori & Associates, REO
www.oforireo.com | 877.331.4391
Thank you for being here!
We look forward to working with YOU!
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Ofori & Associates, REO
www.oforireo.com | 877.331.4391
Q & A
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