Glossary OF REO Asset Management Related Words
Here are some frequently used terms in REO Asset Management and other terms
that we use at Bankers Asset Management.
Asset Management
Collect and maintain a comprehensive inventory of lender's REO
property holdings. Market properties for sale and reduce holding costs. Deliver
expert and timely real estate sales representation and transaction coordination.
Broker's Price Opinion (BPO)
A local Real Estate Agent's (or Broker's) assessment of a property's
current market value. This report is essential for lenders needing to know the
value of a home in the foreclosure process and for lenders offering home lines
of credit.
A drive-by BPO is a frequently used form of assessment. It is typically done as
the first assessment of the property's value. The report contains basic property
information as well as a few comparables in the area. This is less expensive
than doing a full appraisal or an interior BPO and an agent can provide this
information even if the property is occupied.
An interior BPO is typically done once the property is vacant and serves as a
more detailed and accurate valuation of listing price. With interior property
access the agent can assess a more complete analysis of market value.
Cash-for-Keys
Cash-for-Keys arises if a property is occupied. It refers to offering
current residents of foreclosed properties money in exchange for vacating the
property within a certain period of time.
Curative Process
Some foreclosed properties are in need of repairs. This process
involves the steps to determine what, if any repairs need to be made to the
property and carrying out the work orders.
Direct Expenses
Expenses attributable to the properties, including items such as
utilities, maintenance, repairs, title, transfer expenses, bank wires, taxes,
and attorney fees. Direct Expenses include out-of pocket expenses necessary
to properly manage, market and sale properties.
Determined Value
Value as determined by obtaining a Broker's Price Opinion (BPO) and
an appraisal for the Property. If the BPO and appraisal vary no more than ten
percent (10%), the appraisal will be the Determined Value. If the variance is
greater than ten percent (10%), BAM will speak with the Appraiser and Agent to
try to bring within variance. If this is not possible, a second appraisal on
BPO (client choice) will be ordered prior to determining value.
Marketable
Property is vacant and has no existing encumbrances, which would
hinder transferring clear title. The marketable date begins as of the effective
list date and after receipt of Client "Authority to Market" authorization.
Master Business Plan
Agreement entered into between Bankers Asset Management and client
detailing delegation of authority and procedures, processes and standards for
liquidating property holdings.
REO
"Real Estate Owned". Although property listings that we work with
are also referred to as "Bank-Owned Homes" or "Bank-Owned", the term REO is used
frequently to discuss foreclosed properties.
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