Clay Kime, REOM, CREO, CDPE

VIENNA, VA - Nov. 19, 2009 The REO & Distressed Asset Management Division of RE/MAX Preferred Properties today reported that, the nationwide default rate on home loans has risen to, over one in seven (1 in 7) borrowers, according to a Mortgage Bankers Association (MBA) survey released this morning. The MBA survey indicates that the foreclosure rate will likely continue to increase through early to mid 2010 as national unemployment rates are expected to continue to rise.

Unemployment remains "the principal problem," according to the Mortgage Bankers Association, survey. Homeowners in delinquent status now include a larger portion of borrowers previously considered credit-worthy and even includes borrowers with home loans insured by the Federal Housing Administration.

This market syndrome is and has been, for several years, "collateral damage" said Clay Kime, General Manager of the REO and Distressed Asset Management Division of RE/MAX Preferred Properties of Vienna, VA. The "sub-prime" borrowers were washed out a long time ago. We are now dealing with the market consequences of credit-worthy homeowners who, faced with job loss, divorce, illness, relocation, etc. cannot financially extricate themselves from their homes and loans . . . when "forced to sell," said Kime. Everyone . . . homeowners as well as banks, is having a "severe solvency/balance-sheet" problem, Kime went on to say.

Nearly 9.6 percent of borrowers were delinquent on their home loans during the Q-3 09, according to the MBA survey, and another 4.5 percent more were actually some formal stage of the foreclosure process. The MBA survey report shows that, about 14 percent of home loans or 7.4 million households were either in a delinquent status or in the formal foreclosure process during the quarter. This is approximately one-half of the 12-15-million foreclosures predicted by many economic experts over the next 3-5 years.

MBA's Chief Economist, Jay Brinkman, stated "The outlook is that delinquency rates and foreclosure rates will continue to worsen before they improve."

The reported delinquencies are at the highest level recorded ever by the survey, which has been conducted since 1972. This rate of delinquencies is up nearly ten percent (10%) during the same period last year. Year-over-year increases in this index are of great concern to the administration.

MBA's Brinkman said that if, as expected, unemployment rates peak by the middle of 2010, foreclosures could not reach their highest levels toward the end of 2010. He went further to say that even after peaking, foreclosure rates are likely to remain elevated as homeowners that have seen steep market price declines now owe more than their home is worth. There is no margin for error, or adverse financial change for most homeowners.

The late 2008 Credit Suisse study paints a darker potential, as the ALT-A and Option-ARM loans go through the already pre-defined re-set period, which does not climax until early 2011. Kime said that as long as interest rates remain low, the default rates are expected to remain low. But as interest rates rise, the interest rate indices to which these loans are tied will increase to the point that more than fifty percent (50%) of the borrowers for these loans will statistically default.

MBA's survey revealed that the southern states, including California Nevada, Arizona and Florida, accounted for about 43.4 percent of the foreclosures commenced during the third quarter of 2009. Unfortunately both delinquency rates and foreclosure rates also grew in the Washington, DC metropolitan area..

The number of homeowners delinquent or in foreclosure in the District of Columbia rose to 10.3 percent during the third quarter, compared with 7.4 percent during the same period in 2008. In Northern Virginia, 9.9 percent of borrowers were delinquent with their mortgage payments compared with 7.0 percent last year. Suburban Maryland has the highest percentage of borrowers in delinquency or foreclosure, rising to 13.9 percent, up from 9.2 percent in 2008.

Club Tsunami at the Five Star Conference was a great success thanks to everyone's hard work. The REOMasters' executive staff was awesome and most of our membership geared up to support the event. Even if you couldn't attend, the social networking, blogging, Twittering, et al contributed greatly to the success of the event and the visibility of the REOMasters Network.

But Club Tsunami was a pit-stop . . . not the destination. There is great interest in our organization. I had dozens upon dozens upon dozens of people notice the REOMasters lapel pin and ask me about the organization. Everyone that asked was quite interested and intrigued with the whole concept. We are going to grow, and rapidly.

Since we are all, most likely, "Type-A's" we need goals toward which to strive. Club Tsunami was certainly a good goal, and we did it together. But the ultimate goal remains to set a new standard of conduct and performance for REO agents, a standard that will be prized by the corporate client community. We want the client community to know that it is OK to expect and demand excellence from their REO Agents, and that there is no better choice than an REOMasters member.

At the conference and networking events I heard lots of opinions. Some said REOs are going to grow . . . some said they are going to diminish. Whether they do either, the truth is that there will be REOs. No matter what, the pre-marketers and asset managers will be constantly looking for "quick-scan" ways of selecting agent resources that can be trusted to understand, execute and complete "tasks" on-time (with no surprises - thanks, Richard.)

At Five Star, I sat through a presentation by a board member of a prestigious REO brokers association. What I heard him say was that REO "is all about making money." (Yikes!!)

There are those that deliver excellence and are rewarded for it. That is us (REOMasters)! And there are those that seek the reward by delivering the minimum required to gain the reward. That is NOT us! (I hope)

We have an incredible membership, the best agents/brokers I have ever been privileged to meet. I truly mean that!

As a group we can be what we will . . . as individuals we can only be what others allow.

As a group . . . let's Rock!.

The "bar" has been raised.

Lenders and Servicers need REO Agents that can also provide professional Property Management Services, and not just property preservation and maintenance. We have the controls in place to ensure full legal compliance with the PTFA.

The Protecting Tenants at Foreclosure Act of 2009 (PTFA), is included in the Helping Families Save Their Homes Act of 2009 (S. 896 -- Public Law 111-22, approved May 20, 2009.) It requires that tenants residing in foreclosed residential properties be provided notice to vacate at least 90 days in advance of the date by which the immediate successor, generally, the purchaser, seeks to have the tenants vacate the property. **Except where the purchaser will occupy the property as the primary residence, the term of any bona fide lease also remains in effect, which we know our Corporate Clients will not be doing.

This legislation and regulation came into being because, all too often, tenants were caught unaware that the residential property in which they reside was being foreclosed and were given little notice of the need to vacate the property. The objective of these new tenant protections is to ensure that tenants receive appropriate notice of foreclosure and are not abruptly displaced. Requirements are to provide tenants with at least 90 days advance notice to vacate and to preserve the term of any bona fide lease apply to foreclosures on all federally-related mortgage loans or on any dwelling or residential real property.

Our clients depend on the Clay Kime REO team to insulate them from future surprises that could delay asset disposition, property preservation, and timely settlement. Clay is REOM & CREO Certified by NFSTI and serves as the Virginia State Director and Executive Member of the REOMasters Netw...

The REO and Distressed Property Management Division at RE/MAX Preferred Properties has implemented a fully PL 111-22 compliant Property Management Program for our Corporate Clients.

All of our occupancy verifications are conducted immediately upon receipt of every assignment. If the property is found "occupied," verification of the identity of the occupant is required. Verification of the occupancy rights (lease, rental agreement, etc.) is also required, including proof of prior payments to the landlord (previous owner). Immediately thereafter, the results of this interview are assigned to our legal team, and communicated to the Client.

If a Cash for Keys negotiation is explored we work aggressively to obtain agreement with the occupant. We further work to prosecute evictions immediately where occupancy retention rights are misrepresented.

In instances where continued occupancy in compliance PL 111-22 is required, we stand competent and experienced to ensure our Corporate Clients are compliant with full, licensed property management administration throughout the legal requirements.

There is much more to full legal compliance with PL 111-22. Please feel free to give us a call at (703) 625-2652 to discuss how our full range of REO services . . . can help you excel. Or just E-Mail us at TeamKime@MRIS.comYou can also Twitter me at REOVirginia.

Come and meet all the REOMasters professionals at the FiveStar Conference, September 21 -23. I invite you to join me and REOMasters Network at "the" Blow-out charity, fund raiser party "Club Tsunami" (8:00 p.m. - 2:00 a.m) immediately following the RES.NET Community Cookout from 6:30 - 8:30 p.m on September 21^st.

At Club Tsunami, 100% of the ticket sales go to our designated charity partner, The Foreclosure Angel Foundation.

The Foreclosure Angel Foundation is overwhelmed with thousands of desperate cries for help, many from battered spouses, the elderly and infirm, requesting relief from either losing their home, or help finding a new place to live and sleep. Marylin Mock, the Executive Director recently told me that she has well over 3,000 applications for assistance from the most fragile and frail in our society, awaiting assistance.

Come meet Marylin Mock and the REOMasters Network team and celebrate this worthy fund-raiser. The Club Tsunami event will be completely sold-out before the 21st.^st.

I have a some Corporate Clients that cannot attend FiveStar this year. As a result I have few extra pre-paid, VIP tickets available for PMs and AMs. Interested, please let me know.

Regards,

Clay