Field Asset Services is a legitimate, major player in the REO industry. While this DS News story does not explain Field Assets methodology, it does indicate a large sample size of over 17,000 properties were studied over the first half of 2010. From my experience, like most things real estate, this is a local decision. There is no doubt in my mind that the probability of improving a properties turn will be significantly impacted by providing pre-marketing rehabilitation, in certain communities. As we enter a year where projections are for record amounts of foreclosed properties to be gracing the market, the key is identifying where rehab will pay off.
In this regard, it seems to me that there are three options for the institutions holding defaulted mortgages.
- Utilize an experienced broker to assert whether the rehab decision is the correct decision. If it is the correct decision, I think a program like Field Assets is the way to go. The old idea of having a broker run a rehab program was full of problems from lack of experience to outright fraud. But serious rehab programs need to be in the tool box and considered.
- Find financing options to allow the owner occupants, who want to pick out their own paint and floor covering, and are not challenged to see the possibilities and excited by such, to participate in this process. Why do people like to build homes? So they can make their own choices. How can rehab programs be marketed to allow the purchaser to be involved in the selections?
- Or, the property seller/bank, offer programs like the HomePath Renovation Mortgage program from Fannie Mae. Or, educate REO brokers to have an FHA lender ready to help market the 203B or 203K options.
I think it is safe to say that this year is going to see a lot of new foreclosed properties hitting the market, at a time where housing prices are fighting to stay on solid ground. It is the responsibility of all involved in the process to discover how to make these homes attractive to the owner-occupant purchaser and help stabilize the communities so affected by these foreclosures.
Lets start at step on, who is the likely buyer of this foreclosed home if it was made to be in habitable condition? If the answer is an owner-occupant, Field Assets and my recommendations above, are pretty good paths to pursue to rebuild our communities.