cathy davis ~ 1-855-487-7367

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Cathy Davis www.usreop.com ~ 1-855-487- 7367

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Cathy Davis

www.usreop.com ~ 1-855-487-7367

Open for Membership – March 2011Open for Membership – March 2011 Top Sponsorship for all major REO Top Sponsorship for all major REO

conferencesconferences Half of Founders are experienced in Half of Founders are experienced in

Servicing or Asset Management and Servicing or Asset Management and many members were asset many members were asset managersmanagers

Members average over 15 years in Members average over 15 years in REO with 33% average over 24 yearsREO with 33% average over 24 years

Experienced members from all sectors of Experienced members from all sectors of the industrythe industry

Reputable members trusted by the Reputable members trusted by the industry clients, partners, peers and industry clients, partners, peers and communitiescommunities

Limited membership based on strict Limited membership based on strict criteria to efficiently assist the needs of criteria to efficiently assist the needs of the industry (over 200 members have met the industry (over 200 members have met our criteria from over 1200 applications)our criteria from over 1200 applications)

HECMHECMHome Equity Conversion MortgageHome Equity Conversion Mortgage

24 CFR 206.12524 CFR 206.125

HECM were established in 1987 by Housing HECM were established in 1987 by Housing and Community Development Actand Community Development Act

Expanded over the next couple of decades Expanded over the next couple of decades and during the past few years, has seen and during the past few years, has seen major overhaul of initial origination rules major overhaul of initial origination rules due to rising default rates. due to rising default rates.

Recent changes include non-borrowing Recent changes include non-borrowing spouses, limitations on initial draws, spouses, limitations on initial draws, requirements for set aside funds for requirements for set aside funds for payment towards taxes, insurance, repairs payment towards taxes, insurance, repairs and requirements on financial ability of the and requirements on financial ability of the borrowerborrower

Basic RulesBasic Rules

Borrower must be 62 years or olderBorrower must be 62 years or older Spouse does not need to be underwritten on loan Spouse does not need to be underwritten on loan

if under 62if under 62 Lender makes monthly payments to borrower up Lender makes monthly payments to borrower up

to a specific LTVto a specific LTV Borrower is responsible for taxes/insurance unless Borrower is responsible for taxes/insurance unless

set aside is usedset aside is used HUD requires a 2HUD requires a 2ndnd Deed of Trust to secure its Deed of Trust to secure its

advances (this must be released if a DIL is advances (this must be released if a DIL is completed)completed)

http://www.ecfr.gov/cgi-bin/text-idx?tpl=/ecfrbrowse/Title24/24cfr206_main_02.tpl

§206.125 Acquisition and sale of the property§206.125 Acquisition and sale of the property

g) g) Sale of the acquired property.Sale of the acquired property. (1) Upon acquisition of the property (1) Upon acquisition of the property by foreclosure or deed in lieu of foreclosure, the mortgagee shall by foreclosure or deed in lieu of foreclosure, the mortgagee shall take possession of, preserve and repair the property and shall take possession of, preserve and repair the property and shall make diligent efforts to sell the property within make diligent efforts to sell the property within six monthssix months from from the date the mortgagee acquired the property. Repairs shall not the date the mortgagee acquired the property. Repairs shall not exceed those required by local law and, in cases where the sale is exceed those required by local law and, in cases where the sale is made with a mortgage insured by the Secretary or guaranteed by made with a mortgage insured by the Secretary or guaranteed by the Secretary of Veterans Affairs, those necessary to meet the the Secretary of Veterans Affairs, those necessary to meet the objectives of the property standards required for mortgages objectives of the property standards required for mortgages insured by the Secretary. No other repairs shall be made without insured by the Secretary. No other repairs shall be made without the specific advance approval of the Secretary. the specific advance approval of the Secretary. The mortgagee The mortgagee shall sell the property for an amount not less than the appraised shall sell the property for an amount not less than the appraised valuevalue (as provided under paragraph (b) of this section) unless (as provided under paragraph (b) of this section) unless written permission is obtained from the Secretary authorizing a written permission is obtained from the Secretary authorizing a sale at a lower price.sale at a lower price.

Whichever occurs the latest:Whichever occurs the latest:

The date the DIL was recordedThe date the DIL was recorded Expiration of Redemption, Ratification and ConfirmationExpiration of Redemption, Ratification and Confirmation Vacancy (Both Humans and Personals)Vacancy (Both Humans and Personals) Foreclosure Deed Recorded Date – transferring the title Foreclosure Deed Recorded Date – transferring the title

from the borrower to the servicerfrom the borrower to the servicer

Marketable Title Definition

HUD GUIDELINES APPLYHUD GUIDELINES APPLY Limit on claimable preservation costsLimit on claimable preservation costs Utilities are not required to be turned onUtilities are not required to be turned on Offers must be at appraised value or higherOffers must be at appraised value or higher No concessions – no repairs, no closing costs, no No concessions – no repairs, no closing costs, no

renegotiationsrenegotiations

Establish values – accuracy is critical for the BPO and appraisal – should be Establish values – accuracy is critical for the BPO and appraisal – should be reconciledreconciled

Property is listed at appraised valueProperty is listed at appraised value Continually re-evaluate marketing planContinually re-evaluate marketing plan Update appraisal, no later than day 165Update appraisal, no later than day 165 Claim filedClaim filed

First 180 Days from Marketable Title

§206.127   Application for insurance benefits.§206.127   Application for insurance benefits. (a) (a) Mortgagee acquires title.Mortgagee acquires title.  

(1) The mortgagee shall apply for the payment of the insurance benefits within 15 (1) The mortgagee shall apply for the payment of the insurance benefits within 15 days after the sale of the property by the mortgagee. Application shall be made by days after the sale of the property by the mortgagee. Application shall be made by notifying the Secretary of the sale of the property, the sale price, and income and notifying the Secretary of the sale of the property, the sale price, and income and expenses incurred in connection with the acquisition, repair and sale of the property. expenses incurred in connection with the acquisition, repair and sale of the property. (2) If the property will not be sold within six months from the date the mortgagee (2) If the property will not be sold within six months from the date the mortgagee acquired title, the mortgagee shall, at least 15 days prior to the expiration of the six acquired title, the mortgagee shall, at least 15 days prior to the expiration of the six month period, request the Secretary to cause another appraisal of the property to be month period, request the Secretary to cause another appraisal of the property to be made. Within 15 days of receipt of the appraisal, the mortgagee shall apply for the made. Within 15 days of receipt of the appraisal, the mortgagee shall apply for the insurance benefits as provided in paragraph (a) of this section, substituting the insurance benefits as provided in paragraph (a) of this section, substituting the appraised value for the sale price. The mortgagee shall bear the cost of the appraisal.appraised value for the sale price. The mortgagee shall bear the cost of the appraisal.

(b) (b) Party other than the mortgagee acquires title.Party other than the mortgagee acquires title. The mortgagee shall apply for the  The mortgagee shall apply for the payment of the insurance benefits within 15 days after a party other than the payment of the insurance benefits within 15 days after a party other than the mortgagee acquires title to the property. Application shall be made by notifying the mortgagee acquires title to the property. Application shall be made by notifying the Secretary of the sale of the property and the sale price.Secretary of the sale of the property and the sale price.

(c) (c) Mortgagee assigns the mortgage.Mortgagee assigns the mortgage. The mortgagee shall file its claim for the  The mortgagee shall file its claim for the payment of the insurance benefits within 15 days after the date the mortgage is payment of the insurance benefits within 15 days after the date the mortgage is assigned for record to the Secretary. The application for the payment of the assigned for record to the Secretary. The application for the payment of the insurance benefits shall include the items listed in §203.351(a) of this chapter and insurance benefits shall include the items listed in §203.351(a) of this chapter and the certification required under §203.353 of this chapter.the certification required under §203.353 of this chapter.

Claim from Sale during pre 180 dayClaim from Sale during pre 180 day

UPB - $150,000UPB - $150,000BPO - $110,000BPO - $110,000Appraised Value (day 1) - $112,000Appraised Value (day 1) - $112,000

UPBUPB $150,000$150,000-Sales Price/Appraised Value-Sales Price/Appraised Value $112,000$112,000HUD paysHUD pays $ 38,000$ 38,000

Investor is whole *Investor is whole *(subject to claim limitations)(subject to claim limitations)

HUD GUIDELINES NO LONGER APPLYHUD GUIDELINES NO LONGER APPLY

Marketing Information is more critical than everMarketing Information is more critical than ever Market Trend InformationMarket Trend Information Number of ShowingsNumber of Showings Feedback – what is negatively impacting the marketing effortsFeedback – what is negatively impacting the marketing efforts Pricing recommendations and communicationPricing recommendations and communication

Post 180 Day from Marketable Title

Day 180 ClaimDay 180 ClaimUPB - $150,000UPB - $150,000

BPO (day 1) - $ 110,000BPO (day 1) - $ 110,000

BPO (day 165) - $90,000BPO (day 165) - $90,000

Appraisal (day 1) - $112,000Appraisal (day 1) - $112,000

Appraisal (day 120) – $115,000Appraisal (day 120) – $115,000

Appraisal (day 165) - $115,000Appraisal (day 165) - $115,000

USBUSB $150,000$150,000

-Appraised Value-Appraised Value$115,000$115,000

HUD paysHUD pays $ 35,000$ 35,000

Post 180 SalePost 180 Sale

UPBUPB $150,000$150,000

Less HUD paymentLess HUD payment $ 35,000$ 35,000

Investor’s New BaseInvestor’s New Base $115,000$115,000

Less Sales PriceLess Sales Price $ 90,000$ 90,000

Investor’s LossInvestor’s Loss $ 25,000$ 25,000

USREOP is a member of the NRMLA USREOP is a member of the NRMLA

Experienced in overseeing the disposition of HECM Experienced in overseeing the disposition of HECM properties since October 2011. USREOP has been involved properties since October 2011. USREOP has been involved in over 12,000 HECM REOs with 6 different servicersin over 12,000 HECM REOs with 6 different servicers

USREOP has been able to assist with training and increasing USREOP has been able to assist with training and increasing agent performance by creating efficient processes to agent performance by creating efficient processes to reduce DOM, increase sales during pre 180 which reduces reduce DOM, increase sales during pre 180 which reduces losses. losses.

USREOP members have been successful in expediting USREOP members have been successful in expediting process and obtaining copies of deeds that are needed to process and obtaining copies of deeds that are needed to establish Marketable Title date. establish Marketable Title date.

COMMITMENT ~ EXPERIENCE ~ REPUTATION