If you're an intermediary, the Bulk REO sector is a minefield.

These are large dollar transactions. You will run into unscrupulous players on the buyers side, sellers side and intermediary side. In addition, the profits to be made from these securitized packages is tremendous. The economy is stagnating, banks are being forced to unload inventory, and the stock market is in a trading range. It is easy to see why so many hedge funds and institutional buyers see quick money in bulk reos.

There is a lack of trust in the industry. Unfortunately there are many players that are on the sellers side that claim they can deliver but never do. There are just as many false buyers that are looking for opportunity but don't have the inclination or the resources.

Many buyers are jaded. They are burnt out, they have pursued the elusive REO packages for weeks, months. What follows below are some red flags that the buyer/seller or intermediary you are dealing with is not playing by the rules.

B1. Buyer Is Unwilling to Sign An NCNDA
If the buyer is unwilling to sign an NCND with you, they WILL circumvent you.

Walk Away from the Intimidation Ploy
Buyer(s) will call and tell you they represent billions in buying power and will convince you they are real and grill you. They are interested in putting you on the spot and extracting valuable information from you. If a buyer is not willing to deal with you fairly, they will run circles around you the rest of the way and most likely undervalue your services and not be willing to pay you.

B2. B3. Buyer Wants Proof Of LOA
No seller that is delivering is going to provide an LOA. Currently, demand far outweighs supply and compilers have multiple buyers for legitimate product. They don't need to pursue buyers. A number of buyers will ask for this because they have been burnt, have experienced frustration; unfortunately, sellers are not providing LOAs and it is not likely to change unless the market changes.

S1. Seller Advertises Portfolio Available In Escrow Immediately
Most of these are wild goose chases. This is likely just a ploy to get them to contact you. There is no product. If product is real, it will be sold to existing relationships. In most cases, this type of seller will insist on being given your buyer or buyer mandate contact information so they can contact them directly in a few days. Provide a generic LOI and see if they are willing to deal attorney to attorney, bank to bank, escrow to escrow and willing to verify tape exists.

A follow up ploy - they will tell you the tape was verified but sold to another buyer and ask for your LOI.

B4. Buyer Deploys Existing Relationship Caveat
You may be working with a buyer as a seller rep and the buyer will ask for the name of the seller. The moment you provide the name of the seller, he will indicate that he has an existing relationship and circumvent you. The fact is that the buyer would never have known about the product because he is obviously not communicating with his existing relationships.

S2. Seller Wants to Contact Buyer Directly or Vice Versa
This is okay as long as you are part of the conversation. Arrange a conference call and the seller is okay to have you on the call. If the seller wants to contact the buyer, make sure you have a trusted relationship with the seller, or you are likely just providing the seller with the buyers contact information.

Learn More AboutBulk REO & Notes Investments

OUR PROCESS

STEP1. Buyer Presents Requirements & Signs NCND & Submits LOI
We identify the intermediary parties, review buyer needs. Based on size, characteristics and availability we determine seller source to present. Buyer signs sellers NCND and LOI.

STEP2. Call Between Seller Facilitator & Buyer / Buyer Mandate
Seller walks buyer through the process, discusses recent completed transactions, reviews relationships to REO sources and goes over purchase process. Seller answers any questions buyer may have at this time.

STEP3. Buyer Provides Proof of Funds, Submits Order
Buyer submits Proof Of Funds, Submits Order. Seller will review existing inventory and present a prepack or submit a custom order.

STEP4. Tape is Compiled, Usually 24 hours to 5 Days
Seller provides tape to Buyer for initial review. Production of tape can be same day or 2-5 days depending on availability. Smaller orders may take longer.