Fair Housing and REO Part 4 of 4

Recommendations regarding REO and Fair Housing

The National Fair Housing Alliance -NFHA- made the following statement in their April 11, 2011 publication “Here comes the Bank, There goes our Neighborhood”;

“Racial and ethnic disparities in the maintenance, marketing, and sales of Real Estate Owned properties is a civil rights challenge that requires banks, servicers,and investors to change their business models for disposing of REO properties and to establish standards and oversight mechanisms for the third-party real estate brokers and asset managers they hire.  It also requires federal regulators and enforcement agencies to increase their oversight of banks, servicers and investors to ensure they fully comply with federal fair lending laws.

Local governments must address these issues by considering the impact of REOs on neighborhoods as part of their Analyses of impediments to Fair Housing Choice and by taking action to overcome the impediments created by poorly maintained REOs.”

The following items were highlighted as the areas of greater concern:

1. Selection of Brokers. NFHA makes the recommendation that the banks are careful to select a diverse group of brokers. Having brokers that are familiar with the area, involved in the community  as well as ample experience in selling in a particular market is imperative to the proper pricing and marketing of a property. The Banks and Asset Managers also need to be sure that the Broker does not have pending complaints or history of discrimination.

2. Correct pricing:  BPO-Broker Price Opinions – need to include interior review and drive bys not allowed. Or the banks need to seed a second full appraisal.

3. Property Preservation and Repairs- All parties should be held accountable for the Curb appeal of a property. We need to work together and really open up the communication to prevent further deterioration of a property. While not all properties are in similar condition, we do have control over the upkeep during the marketing period.

4. Advertising and Marketing -The same standardized signage should be used for all properties. Agents need to be trained to ensure that they are not steering potential borrowers to specific neighborhoods.

This publication is a great read and full of valuable information. While we are caught in the processing of REO inventory, we need to remember the larger picture, make sure that we abide by the Fair Housing rules and continuously educate ourselves to stay abreast of the constant changes if we are to effectively stabilize our communities.

Information via Gail Buck: http://9dcc1a8.activerain.com/

Fair Housing and REO Part 3 of 4

Pricing and Undervalue effects

In the National Fair Housing Alliance (NFHA) publication “Here comes the Bank, There goes our Neighborhood”, there is  a section entitled “Banks Must Not Undervalue Homes and Must Price REO Properties Properly“. So there are a couple of pieces to this. The property needs to be properly maintained so that the value, or the perceived value is not diminished.

Their report found that in predominately minority low income neighborhoods, often times the banks “failure to adequately maintain a property may be related to an inaccurate perception of the House’s actual value and is also often related to the false belief that a REO in a distressed neighborhood is not worthy of financial investment.” It stands to reason then, that deferring maintenance will assure that the property stays on the market longer – thereby driving down the price even more – the bank loses money, neighborhood has another blighten property and more loss on the tax revenue side. It’s interesting because I see that happen here in a community called Maryvale. There is no real care given to the REO property, it is priced low — but in this case, the investors  are scooping them up and then reselling to potential homeowners (minority) at a much higher price. In all most all cases, they are facilitating this with a hard money loan.

I have heard of multiple scenarios where the hard money loan is 2 to 3 times the price that the investor purchased the property and the loan is pretty much set up for the homeowner to fail payments in the following years. It is very sad. So if the Owner Occupant would have been willing to purchase the home for 60k, why was the investor able to grab it for 15-20 or 30k? There is a loan with US Bank that I am exploring called the American Dream Loan – a blog for another day – if this loan product does what I think it can do, we will be able to facilitate the owner occupant, skipping the investor and his hard money loan and purchasing with a product that benefits all.

Back to the issue of pricing and undervaluing…once again, I believe this lies largely with the listing Broker. As a listing Broker, the bank does not always agree with our pricing strategy and may list higher or lower than our recommendation.That is where it becomes our responsibility to get away from a “turn and burn” mentality and really look at the data, the community and the trends so that we can facilitate the recovery and not delay it. We need to provide accurate data to the banks and plead our case when we believe the bank is missing the mark on pricing.

Virtual school attendence on the rise in Arizona

Virtual school attendence on the rise in Arizona
Class is beginning for more than 4,000 students at Arizona Virtual Academy.

They learn all the same lessons and have the same teachers, but the children are often hundreds of miles apart.

"This offers flexibility for out students and our parents," said Megan Henry, Head of School for Arizona Virtual Academy.

Students can "attend" class from anywhere an internet connection is accessible.

The academy is a charter school funded by tax dollars and no tuition is paid.

If a family cannot afford a computer with internet access, the school will provide one.

Read more: http://www.abc15.com/dpp/news/region_phoenix_metro/central_phoenix/virtual-school-attendence-on-the-rise-in-arizona#ixzz1UBXPyvhE