I have been involved in the Bulk REO Portfolio circus for a while now
You hear claims of these multi-million dollar packages, but NONE of them exist. Yes, you may hear someone claim that they are next to the seller, have direct connections, have real tapes, or “the tapes in escrow”, but when the rubber hits the pavement, everyone’s gone in the smoke!!!
Here are some of the reasons as to why these deals don’t close:
- Buyer Misrepresentation (Principal never gets on the phone. You always talk to “his rep”)
- Seller Misrepresentation (Seller is always shielded by brokers)
- Buyer fails to proof up (bogus POF)
- Tapes are fraudulent (no way to know if they are real)
- Everyone throws around a NCND (1st sign of a bogus deal).
- Everyone throws around a Fee Protection Agreement (2nd sign of a bogus deal)
- The banks 90% of the time go through their normal avenues of disposing of REO Assets via asset management companies. They have the time and money to send it to a Realtor and let him try to sell it first, before taking a greater loss on it.