Training Realtors to Lower REO Inventory Levels
With RealtyTrac projecting foreclosures to rise for the remainder of this year and into 2012, one strategy that could possibly help the housing industry make a quicker recovery is for companies to consider emphasizing training courses for their employees to help them reduce their bank-owned inventory levels.
Several businesses are offering education courses that teach brokers how to properly dispose REO assets the right way.
Vendor Resource Management established VRM University in 2008 to help corporate sellers manage their growing inventory of foreclosed properties. Cheryl Travis-Crawford, senior vice president of Vendor Resource Management, said working at Freddie Mac for 10 years helped her see that many agents do not fully understand the REO selling process.
When an agent would get a listing, they tried to treat it the same as an owner-occupied residence, Travis-Crawford told this publication. VRM was developed to help brokers make sure they had every opportunity to be successful once they got a listing and conduct the sale the right way.
VRM University is a two-day class that provides REO broker training and certification for experienced Realtors, mortgage brokers, appraisers and anyone interested in fulfilling a career in the mortgage industry.
At the classes, individuals learn to work with a corporate seller, how to generate creative market strategies and set up an office, the right way to produce a broker price opinion, and the importance of customer service to grow and sustain a business.
The classes are available both in-person and online. VRM's live training sessions take place at national mortgage conferences throughout the year and regional courses are also offered based upon a customer's business needs and in areas that have high foreclosure concentration rates.
Realtors should absolutely take continuing education classes after they are REO certified in order to maintain a current knowledge of what is going on in their business, Travis-Crawford said. Law changes and market specific issues can affect how Realtors do their business and those are the types of things you learn through continuing education classes.
The government-sponsored enterprises also require their contracted brokers to take training courses to make sure they know how to do their job appropriately when selling REO assets.
REO training is essential for the business we do because the better trained our employees, vendors and suppliers are, the better end product we will have and the quicker we can move our REOs off the market, said Sharon Bartlett, director of vendor services at Freddie Mac.
Freddie Mac began utilizing a new Web-based module this year called REO Training Solutions that 2,300 brokers have completed through October. Compared to Freddie's previous system, the RTS module is available 24/7 for a broker to access.
Freddie Mac also has a program called Correct Steps to provide brokers with assistance if they are struggling with certain aspects of an REO sale.
Courses that can be utilized in the Correct Steps training includes executing a BPO, handling disclosures, how to prepare contract packages following Freddie's agendas, how to handle multiple offers, expense processing and valuation pitfalls.
We utilize this tool if the listing broker is experiencing performance issues and we feel like they need additional training, Bartlett said.
Bartlett said the RTS training, which all HomeSteps employees are required to take by the end of this year, lasts approximately 21 hours, while the Correct Steps modules usually can be finished in an hour. There are knowledge tests throughout the modules and training program, plus a final exam that the brokers have to pass to fulfill the education requirements, Bartlett said.
She added that Freddie's training program is different than what the rest of the mortgage industry is offering because once a company pays for the class, it is available for everyone within that organization to access including the agents, inspectors and receptionists.
For this training, we are able to walk them through the process from when they receive the acquisition all the way to the end of the closing based on how we want the process to be handled, Bartlett said. We talk about our expectations about what properties should look like, how we want them to work with our other business partners and all aspects of the REO space with the listing broker.
Fannie Mae takes a different approach when educating its contracted brokers. Rather than explaining how to sell REO homes, brokers have to review recorded trainings to learn the proper way to specifically manage a Fannie Mae-owned property.
Julia Dugger, director of training and consumer technology at Fannie Mae, said the GSE hires brokers that have a minimum of two years of experience selling bank-owned properties plus proven success within their market, so there is no need to explain the REO sales process to these individuals.
Randy said Fannie has established a 400-page REO sales guide that outlines specifically how the GSE expects its brokers to sell their properties. This guide is updated quarterly to reflect regulatory changes and can be accessed on the Internet.
There's a difference between understanding how REO fundamentally works, and how Fannie Mae expects you to sell those properties. It may be how do we handle our BPOs, how do you use our system, how do we expect you to list and market a property, Randy said. Fannie Mae has very specific expectations that may be very different than other lenders. So when the new broker comes into the network, the expectation is that they will learn and understand what that sales guide is.
Randy added that the GSE does not intend to keep anyone under contract who is not performing to their standards over an extended period of time.
According to Randy, Fannie is currently in the process of developing a new learning management system that will allow the GSE to do a more comprehensive curriculum-based training for every individual's specific role in selling an REO home. The new platform will be able to assess whether contracted employees reviewed the training courses and subsequently passed the various modules' final exams.According to Dugger, Fannie is currently in the process of developing a new learning management system that will allow the GSE to do a more comprehensive curriculum-based training for every individual's specific role in selling an REO home. The new platform will be able to assess whether contracted employees reviewed the training courses and subsequently passed the various modules' final exams.
We work with a wide variety of vendors, such as field services, property management companies, repair contractors as well as brokers and attorneys. It is my responsibility to make sure they are all trained for things that they need to do their job, Randy said. All of this builds clarity around what our expectations are for our contracted employees. We tell you how to perform as brokers and then can find out if you're meeting that expectation as part of our performance management.We work with a wide variety of vendors, such as field services, property management companies, repair contractors as well as brokers and attorneys. It is my responsibility to make sure they are all trained for things that they need to do their job, Dugger said. All of this builds clarity around what our expectations are for our contracted employees. We tell you how to perform as brokers and then can find out if you're meeting that expectation as part of our performance management.