COUNTRYWIDE REO BULK SALE PROCESS

By
Real Estate Mortgage Broker with United American Mortgage Corporation

Sample Example Letter of Intent (LOI) Components

  1. LOI Components.  These are the components we highly recommend a buyer use to communicate their order in detail to the REO Seller. 
    1. Dollar Order Amount.  Example $USD 20 Million.
    2. Offering Price.  Based on availability and order amount Buyer offers to pay a "realistic" percentage of the "current value" of property based on Broker Price Opinion ( BPO ) held by the REO seller.  BPOs are typically less than 30 days old.  Pricing is stated as a range of BPO value. Based upon completed orders Valor can provide current pricing trends.
    3. BPO Delivery Range.  Actual BPO value range of the total property portfolio being purchased. Such as $30.7 Million to $40 Million ($0.50 to $0.65 cents on the dollar equivalent)
    4. Property Type.  Example: single family residential.
    5. Price Range ( LTV ).  This is the range of pricing based on current BPO value that the Buyer is targeting for individual property value. Buyer will be paying a percentage of this value such as $0.50 to $0.65 cents on the dollar or 50% to 65 % LTV of current BPO .
    6. Property Condition.  Identify the condition of property you are willing to accept. Example: Minor cosmetic to light rehab.
    7. Occupancy.  Provide the occupancy requirements for the property portfolio.
    8. Title.  Buyer states how they would like to accept title.
    9. Proof of Funds.  Buyer states the type of funds that will be utilized: Cash, BLOC, etc. 
    10. Requested Geographical Location.  List the geographical locations and percentages of properties in each location to be purchased. Use "Exhibits" if necessary to detail locations.
    11. TAPE Delivery Time Requested.  Buyer states how soon they need the tape, typically between 24 to 72 hours.  However, all orders are filled subject to availability.
    12. Initial TAPE Review Period Requested.  Typically 24 to 72 hours.  This represents the Buyer's "free look" period.
    13. Refundable Deposit: Sometimes requested by Financial Institution or Government Sponsored Entity when beginning "due diligence" (takes the property off the market exclusively for Buyer)
    14. Due Diligence Period: Typically - residential a 3 to 7 days; commercial 20 days
    15. Closing:  Two calendar days after the expiration of the due diligence period the full amount of the deposit becomes non refundable. Closing to be coordinated with title & escrow.
    16. Title: To be determined by the Buyer
    17. Escrow Company.  To be determined by the Buyer. Contact Information A Must!
    18. Commission: Buyer shall pay 3% (or 4% for orders under $30 Million)
    19. Closing Paragraph.  This is a brief paragraph describing your purchase.

 

 

Sample REO Bulk Purchase Process (Countrywide/ Bank of America )

 

The Buyer submits a current letter of Intent (LOI) and Proof of Funds (POF).

  • The LOI is made out directly to the bank: Countrywide/ Bank of America.
    • Contains a detailed description of the purchase request
    • Includes geographical description of properties wanted by State, County, City, and Zip Code
  • The POF is a current bank letter from the buyer's bank to Countrywide/ Bank of America:
    • Stating the buyer has cash/ cash equivalents in the amount of the LOI.
      • Is submitted with either a tear sheet or bank statement
      • If a Letter of Credit provides for conditions to close an REO portfolio
      • Is signed by a bank officer
    • Provides Countrywide/ Bank of America with the buyer's bank contact information
    • Provides permission for a designated Countrywide/ Bank of America employee (to be provided after the buyer returns NCND & NCND Fee Addendum) to call the bank to verify funds.

 

The Buyer typically receives the REO portfolio (TAPE) from Countrywide/ Bank of America within 72 hours.

  • Buyer reviews TAPE (Buyer typically receives a 24 to 48 hour "free look" period.)
    • The TAPE will be accepted/declined in total (the properties will not be "cherry picked"). 
  • Buyer and Seller enter negotiations and agree to a enter into a purchase contract
  • Buyer and Seller open escrow (Buyer's Choice).  Typically a 10% refundable deposit is made at the open of escrow held during the due diligence period.  At the completion of the due diligence period the Buyer accepts or declines the properties (again, in total) and the deposit becomes non-refundable. When the Buyer proceeds with the TAPE purchase, the transfer of money and property occur in the Buyer's escrow.

 Once the Buyer's initial transaction is completed with Countrywide/ Bank of America, the Buyer can return to the Seller as often as their business model and market conditions allow.

 Importantly, there are  several dozen sources for REO residential and commercial properties to complete a buyer's order as needed.  We provide our buyers the opportunity to purchase in order sizes from $5 Million to $1.5 Billion direct to platform.

 We hope this protocol statement enriches your understanding of our REO bulk purchase process. There is an abundant amount of REO properties available. However, due to current banking conditions a buyer must be patient - all the banks are in crisis management and many are under audit or preparing for audit. Delay's can occur - sometimes a platform will temporarily shut down due to funding, reorganizations, or emergency company meetings. Additionally, LOI accumulation can temporarily be placed on hold due to an audit requirement or slowed due to market conditions. However, our professionals are actively managing information and working diligently with REO Sellers to provide our clients with real product, unparallel options and successful closing results

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Topic:
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California Short Sales, REO's, and Foreclosures
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Tags:
countrywide reo
loi
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Comments 37 New Comment

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Anonymous #33
Anonymous
Peter Gribble

I am a director and CEO of an Australian Funds management Group - Quantum Funds Management, who has invested and developed over $1b in property funds in Australia.

We have been active in looking at investments the US for clients and currently are in the final stages to launch an Australian back - US Residential REO Property Fund - called - the "Quantum US Residential Property Fund". 

This fund will target property in 5 states; CA, TX, GA and PA in the US. It will look to purchase REO residential property in bulk from banks and financial companies (say tranches of $3-$5m at between $70-$200k per housing lot). 

At this stage we need to get access to what I understand the term to be as the "Asset Managers" in the particular banks.  I understand that these people within a bank manage REO position (Bank owned properties that have been foreclosure). 

Please email me if you are in a position to help us in the US peterg@quantumgroup.com.au

to see our credintial refer to our web site www.quantumgroup.com.au

 

 

We would like to discuss with these Asset Managers the possibilities of buying a portfolio of property from them on certain conditions, one being that the Bank (or possible another institution) helps our LLC fund the purchase, on normal commercial lending terms, at say 75/80% LVT on the market value of the property.

 

Could you be of assistance in either;

 

•-          Directing me to these asset managers

•-          Acting as a facilitator (if this is part of your role), or

•-          Arrange funding, or assets in the above transactions

January 28, 2011 05:59 PM
Anonymous #34
Anonymous
Ali Rankankan

I have access to 280 REO properties, SFR in California which the BPO adds up to $89,999,670.00. discounted at 67 cents on a dollar. Minimum purchase 5M, if you are interested, please email me a LOI and proof of funds to close and I will forward you the tape.

 Thank you,

Ali Rankankan

510-882-4001

ali@alirankankan.com

March 08, 2011 02:59 PM
Anonymous #35
Anonymous
Diana YangLuo

We are interesting in purchase the REO propertiese under $2m a bundle. Can you provide some info?

April 16, 2011 03:43 PM
Rainer
375
Mickel Larrieux


My business partner and I have a buyer that just proofed up and provided an LOI & POF to Bank of America for a $4Billion dollar purchase on June 10th, 2011 for  SFR's in Southern California.

His  protocol is as follows:


Looking for ONLY Bulk Reo's SFR in Southern California, California Statewide & Arizona.

He is looking to purchase $1Billion or more.

No Fannie Mae or Freddie Mac Product.
We would as IM's have to be on the sellers side of the deal for this to work.
Need to get to the actual REAL seller rep or asset mgr to get papered up and close on this deal no later than Tuesday.

Please make sure you send this to whomever has a REAL source to the asset manager.


It's imperative that we try to get this done ASAP.


He can close as soon as next week.


Only SERIOUS ASSET MANAGERS WITH REAL INVENTORY!!!


Contact me if you have any questions.


--
Best Regards,
Michael Larrieux
MLK Group
M (646)898-7769
F (212)369-4290
E homeslarr@gmail.com

Think like a man of action, act like a man of thought.

CONFIDENTIALITY  DISCLAIMER: Sender is not a United States Securities Dealer or Broker,  or U.S. Investment Adviser. Sender is a Consultant and makes no  warranties or representations as to the Buyer, Seller or Transaction.  All due diligence is the responsibility of the Buyer and the Seller.  This e-mail message and any attachments are intended only for the  addressee. They may be privileged, confidential and protected from  disclosure. If you are not the intended recipient, any dissemination,  distribution, or copying is expressly prohibited.

June 26, 2011 03:12 PM
Anonymous #37
Anonymous
Xavier Bey

Hello, I have REAL tapes 40% below market FDIC. Need LOI/POF

CALL 267 499-6847     11/8/11

November 06, 2011 11:46 AM
Anonymous
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Rainer
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Andrew Clemente

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