2. REO Properties: Responsibilities, Education, and Opportunities for Real Estate Professionals WELCOME Page 2

3. Learning Objectives Participate in and take advantage of business opportunities in the REO market—single and multifamily homes “Asset manager” = professional who manages REO transactions 1.The REO Business 2.Opportunities for Real Estate Professionals 3.Listing REO Properties 4.Marketing, Monitoring, Closing 5.Representing the REO Buyer Page 2

4. 1. The REO Business Page 6

5. REO Life Cycle Foreclosure Limbo Page 6

6. Who Owns REOs? Federal Government Entities  GSEs—Fannie Mae, Freddie Mac  HUD, Veterans Administration  U.S. Department of Agriculture  FDIC  Department of Treasury/IRS  U.S. Marshalls Service Banks  The Big 3—Bank of America, Chase, and Wells Fargo Page 7

7. REO Pipeline All the properties moving through the process from foreclosure to a completed sale Not in “foreclosure limbo Page 9 R E O

8. Market Indicators Unemployment Underwater Mortgages High-Risk Mortgages Page 9

9. Shadow Inventory Judicial foreclosure states Mortgage modification programs Moratoria, forbearance Paperwork delays Lack of staffing Page 11

10. Shadow Inventory Facts About 12% of all active mortgages are 30, 60, or 90 days delinquent or in foreclosure About 8% of mortgages are seriously delinquent (90+ days) or in foreclosure Foreclosure starts outnumber foreclosure sales by 3 to 1 Page 13

11. Practitioner Perspective Leo Pareja Reston, Virginia “There's opportunity for everyone … Figure out who you are, what your gifts are, and how to make it work for you.” Page 15

12. Investors Deeply discounted properties, attractive opportunities  Buy and hold in hopes of future value appreciation  Fix and rent for income stream  Fix and flip in hopes of a profit Page 16

13. Home Buyers Opportunities for first- time and repeat home buyers and second- home buyers  Fannie Mae—HomePath®  Freddie Mac—HomeSteps®  HUD—Good Neighbor Next Door Program Page 17

14. Communities and Nonprofits Buy, fix, and rent, or sell as a fundraising opportunity HUD Neighborhood Stabilization Program National Community Stabilization Trust Page 17

15. Community Issues Abandoned, vacant properties Depressed comparable sales Downward pressure on property values Keeping track of the owners, holding them accountable Demolition when beyond repair or the market is overwhelmed Page 18