Welcome to the HUD REO Real Estate Broker

Welcome to the HUD REO Real Estate Broker Webinar Important Changes to HUD Home Sales Scheduled Start: 1: 00 PM Eastern - We will be underway shortly All audio for this webinar is through your computer – there is no separate call-in number Please ensure that you are able to receive sound through your computer and that your speakers are un-muted If you have any technical or audio issues – please review the Support for Technical Issues document by clicking on the Supporting Material Button located just below this screen

Important Changes to HUD Home Sales Presented by the HUD Homeownership Centers March 30, 2011

Important Things to Know n n Question and Answer Format n Utilize “Ask a Question” button on your screen n Audio/Technology questions utilize the “Help” button n Questions will be answered at the end of the presentation Supporting Material n A copy of this Power Point presentation n A PDF version of the presentation n Frequently Asked Questions related to technical Ifissues (PDF) you have audio issues or the slides stop advancing – simply refresh or reload the page displaying the webinar

Important Things to Know Web Site Pop-ups During Presentation n Several helpful web sites will be provided to you for bookmarking during the presentation. You will need to disable your pop-up blocker to receive this information n Archive Version (POP-UP) n http: //www. hud. gov/offices/hsg/sfh/talk/parc/phiarch. cf m

Introduction Ivery Himes, Acting Director Office of Single Family Asset Management HUD/FHA n n HUD REO Homeownership Center Directors n Patrick Sicilia, Today’s Presenter

Overview of Changes n n n n Separate contractors responsible for property management and marketing/sales. www. hud. gov/hudhomes – one site for everything. Listing Brokers. Selling Brokers. New Broker Registration process. Bid and Bid Results Exclusive Owner Occupant period changes. Earnest $ submitted with the contract.

Asset Managers § AM’s are contractors responsible for the marketing and sales of HUD properties. § The AM’s (not HUD) are responsible for selecting the Listing Brokers. § All bids are submitted through HUD’s central bidding site (www. hud. gov/hudhomes) and reviewed by the AM’s. § The AM is your main contact in every HUD sale.

Contract Area Map

Atlanta Homeownership Center Contract Area 1 A 2 A States IL, IN, KY, NC, SC, TN AL, GA, FL, MS, Puerto Rico Asset Managers PEMCO Ofori Home. Telos Contact Number (800) 881 -9260 (877) 667 -9022 (866) 971 -2212 (800) 881 -9260 (877) 667 -9022 (866) 971 -2214

Denver Homeownership Center Contract Area 1 D States CO, NM, TX (North), UT 2 D AR, KS, LA, MO, OK, TX (South) 3 D IA, MN, MT, ND, NE, SD, WI, WY Asset Managers PEMCO Matt Martin Home. Telos Best. Assets Contact Number (877) 772 -8880 (888) 632 -4482 (866) 971 -2212 (877) 772 -8880 (888) 632 -4481 (866) 971 -2212 (877) 343 -4073

Philadelphia Homeownership Center Contract Area 1 P States Michigan 2 P DC, DE, MD, PA, OH, VA, WV 3 P CT, MA, ME, NH, NJ, NY, RI, VT Asset Managers BLB Cityside Matt Martin Ofori Home. Telos Contact Number (877) 877 -5822 (866) 211 -8313 (888) 632 -4484 (860) 246 -7700 (866) 564 -6637 Ofori (860) 246 -7700 Cityside (877) 289 -7433

Santa Ana Homeownership Center Contract Area States Asset Managers Contact Number 1 S AZ, ID, NV BLB (800) 960 -2526 2 S AK, CA, HI, OR, WA PEMCO (877) 927 -7313 BLB (800) 960 -2526

Listing Brokers n LB’s are subcontracted by the AM’s and are responsible for listing and marketing HUD properties and serve as the “eyes and ears” for the AM’s. n Among other things, LB’s will place properties in the MLS and provide signage on each HUD listing. n Commissions are determined by the AM, but must be split 50/50 with a maximum total of

Becoming a Listing Broker n If you are interested in becoming a Listing Broker you must contact the Asset Manager in your region to receive information, as this is not a function of HUD. n Although, most regions have completed their search and are no longer seeking applications, there is always a chance that their list(s) could be changing.

Selling Brokers n n A selling broker may earn up to 3% commission, but may also choose to reduce their commission to increase the net to HUD. Commission checks are made out to the brokers name and address as it is registered. Selling brokers are responsible for understanding HUD contracts and the entire HUD sale process. You must be able to properly inform and assist your buyer throughout the entire transaction. *See your area AM websites for upcoming training events.

In Addition. . . n HUD registered listing brokers or selling brokers may advertise HUD properties and hold open houses. However, you must first gain approval from the appropriate AM to do so. n Any unauthorized marketing is strictly prohibited and may result in penalties and/or loss of bidding privileges.

False Advertising “False advertising or misuse of names to indicate a Federal agency is a punishable violation” Signage, letterhead, websites, telephone messages, business cards, office literature, etc. … using logos or verbiage such as. . . Department of Housing and Urban Development”, “Federal Housing Administration”, “United States Housing Authority”, or “Public Housing Administration” or the letters “HUD”, “FHA”, “PHA”, or “USHA”, or any combination or variation of those words or the letters “HUD”, “FHA”, “PHA”, or “USHA” alone or with other words or letters reasonably calculated to convey the false impression that such name or business has some connection with, or authorization from, the Department of

Fair Housing Act (Introduction) § The Fair Housing Act prohibits discrimination in the sale, rental, and financing of housing, and in other housing-related transactions and services, based on the following protected classes: race, color, national origin, religion, sex, familial status, and disability. The Fair Housing Act (Title VIII of the Civil Rights Act of 1968), 42 U. S. C. § 3601 et seq. § The Act applies to both public and private housing and applies to many of the tasks commonly performed by listing brokers. § Potential liability under the Act may arise under two major legal theories: disparate treatment and disparate impact. Disparate treatment occurs when members of a protected class are treated differently from nonmembers. Disparate impact occurs when a policy or practice has a disproportionately adverse effect on members of a protected class and is not supported by a legitimate justification or, even if it has a legitimate purpose, that purpose could be satisfied through less discriminatory means.

Punishable Acts Include: 1. Refusal to sell, rent, or negotiate for the sale or rental of, or otherwise making unavailable or denying a dwelling to a person because of his or her membership in a protected class. 42 U. S. C. § 3604(a) and (f)(1). 2. Unequal terms or conditions of a lease or sales contract for housing because of an applicant’s membership in a protected class. 42 U. S. C. § 3604(b) and (f)(2). This includes demanding a higher down payment, additional proof of income or credit history, or other requirements of a renter or buyer based on his or her membership in a protected class. 3. Statements (including verbal statements), notices, and advertisements for housing that indicate a preference, limitation, or discrimination for certain applicants based on their membership in a protected class. 42 U. S. C. § 3604(c). This provision prohibits using words, symbols, or illustrations that an ordinary person would believe indicate such a preference, limitation, or

NAID = Name Address Identification Number n The principle broker must submit Form SAMS 1111 & 1111 A which can be obtained from www. hud. gov/hudhomes or www. hud. gov n Once approved, HUD will issue a NAID number that is good for 1 year and must be renewed annually for recertification n No real estate agent or broker can sell a HUD property if the broker for that office is not a HUD Registered Broker n Forms and supporting documents are sent to the HUD

NAID (cont. ) If you are licensed in multiple states within a HOC and your office address is the same, you should submit 1 NAID application and provide copies of the broker’s license for each state that you are licensed. n If the NAID application is missing a document or if corrections are needed, a HUD Staff member will contact the applicant. n

NAID (cont) After you obtain a NAID, you must go to the www. hud. gov/hudhomes website and click the register bidder button in the top right hand side of the page, and register your NAID on the website. n Should you need assistance, you may view the demonstration video on the web page. Should you require additional assistance, you may call 1 -866 -777 -2034. n

Required Forms Sales Contract - HUD Form 9548 and certification of broker form. n Addendums: Lead Based Paint, Radon & Mold, n n Earnest Money, Forfeiture and Extension Policy, Home Inspection, Owner Occupancy (if applicable). A Pre-Qualification letter from a certified, licensed lender is a requirement on all sales containing a mortgage contingency. *Additional forms may be required depending on locality

IRS Forms/Documents n The IRS Document that is submitted should state the Business Name/Individual Name and Tax Identification Number (TIN) of the entity that has applied for the NAID. The TIN is either the EIN (Employer Identification Number) for your business or the Principal Broker’s SSN (Social Security Number). This information must be clearly identified on the IRS Document. A member of HUD Staff will contact you if the IRS Document is not considered to be adequate

IRS Forms/Documents n The following are acceptable IRS documents: IRS Form 147 C, Tax Return with preprinted label and IRS Payment Coupon. n Need IRS forms? Call the IRS at 1 -800829 -0115. Only the Owner/Principal can make the request.

Registration n Visit www. hud. gov/hudhomes and register! n Brokers, associate brokers and associated selling agents, as well as Nonprofits and Government Agencies are required to register with this site before submitting any bids. n Simply click Register at the upper right hand corner of the home page on www. hud. gov/hudhomes and follow directions.

www. hud. gov/hudhomes n n One web site for the entire country. . . Purchasers will see what brokers see. . . New format with enhanced features . . . AM’s will have the ability to list properties on a daily basis instead of once a week. One stop shopping to view properties nationwide, submit bids and obtain forms

www. hud. gov/hudhomes

www. hud. gov/hudhomes (cont. )

Insurable(IN) and Insurable with Escrow(IE) Exclusive “Owner Occupant” periods are now: n A 30 day exclusive listing period for IN and IE properties for Owner Occupant purchasers. n There will be a 10 day bid period (within the initial 30 days) for all bids to be received. If no offers are accepted, bids will be reviewed daily (up to an additional 20 days) for Owner Occupant purchasers only. n

Uninsurable Properties n For UI properties there will be a 5 day exclusive Owner Occupant period. n After the 5 day exclusive bid period, bidding will be open to all purchasers on a daily basis if an acceptable owner occupant offer was not received.

Owner Occupant Purchasers Owner Occupant buyers must purchase a HUD property as their Primary residence and are required to live in the home for a minimum of 12 months before they can sell or rent the home. n Failure to do so can result in a fine of up to $250, 000. 00 and/or imprisonment up to 2 years. n Brokers and agents need to stress this to their customers, as they are not excluded n

Submitting a Bid n n n On the “property’ screen – click “Submit a Bid”. Complete step by step directions are provided to submit a bid electronically. If your buyer’s bid is accepted you will be notified via email from the AM and the bid information will be posted on the web site. However, you can only view your bid – you cannot view other offers. The clock is now ticking. . .

www. hud. gov/hudhomes

www. hud. gov/hudhomes Find a Property

Submitting a Bid (cont. ) n When a bid has been awarded, brokers will have 2 business days to submit contracts to the AM. This means: Every required document necessary to consummate the transaction must be completely signed, sealed and delivered to the AM, along with the earnest money deposit check made out to HUD, within 2 business days from award notification. n Not doing so may cost the buyer a property and you a commission. We highly recommend that prepare all documents when you place your original bid.

Bids and Bid Results n Bid History: Log in to www. hud. gov/hudhomes and click on Bidder Functions. You can only view bids you have entered yourself. You cannot view any other offers. n Timer on each listing: Does not mean the amount of days remaining for a person to bid. It is counting down the time that remains before an investor can bid. It also does not mean the property is still available. Always check with the AM prior to submitting a bid to make sure a bid hasn’t already been accepted. Remember, after the first 10 days, bids are reviewed daily.

Educational and Training Resources The bidding site (www. hud. gov/hudhomes) has a wide variety of frequently asked questions and has also recently updated the site to add training videos. Brokers can access these videos by pressing the FAQ link at the far right of the menu bar at the top of the web site’s home page. Click Here

Field Service Managers n FSM’s are contractors that provide property maintenance and preservation services consisting of, but not limited to, initial cleanout services, inspections, securing properties, routine maintenance, repairs and the payment of utilities and fees. n The FSM is the first one in the property after it is acquired and is responsible for making sure it is safe and suitable for marketing before assignment to an AM.

Inspections and Utility Activation HUD properties are sold “AS IS” and buyers are strongly encouraged to obtain a Home Inspection from a fully licensed home inspector. n If a buyer elects to conduct a utility inspection, the broker should follow the instructions for coordinating the utility activation with the Field Service Manager. n

Utilities (cont. ) Selling agents are responsible for working with the buyer to properly execute the “Request for Utility Activation” form. n The buyer must complete and sign the Utility Activation form and disclose the dates that they will conduct their inspection. n The buyer is responsible for any activation and deactivation fees from local utility companies. n The buyer is also responsible to pay any fees that the FSM may require for re-winterization. n

Earnest Money n n n Earnest money must be submitted with the sales contract and will be held by HUD’s designated Closing Agents. The AM will advise brokers of the specific Closing Agent holding escrow and overseeing the transaction once the contract is ratified. All EMD money must be in the form of a certified check or the equivalent of. * Remember, the earnest money deposit check gets made out to HUD

Review of Changes n n n Separate contractors responsible for property management and marketing/sales. AM’s and FSM’s www. hud. gov/hudhomes – one site for everything. Listing Brokers. *Up to 3% commissions. Broker Registration process. Exclusive Owner Occupant period changes. Earnest $ submitted with the contract.

Important Reminders n n n n NEVER give a property key to anyone! Absolutely no repairs or occupancy prior to settlement! All HUD homes are sold “AS IS”. Perform Pre-settlement inspections with your buyers! Timely submission of ALL necessary documents required to secure the sale! (2 business days) TRAINING! – It is so important to keep abreast of the many changes that will continue to transpire. PLEASE make it a priority to attend every training opportunity in your area so you are able to best service your current and future customers. Remember your responsibilities, duties and obligations to each and every “party”, as well as to HUD when selling REO properties.

Where to Get More Information HUD Home Sales Site One stop shop for all HUD Home information n http: //www. hud. gov/hudhomes n FHA Frequently Asked Questions (Pop-Up) http: //www. fhaoutreach. gov/FHAFAQ/ n A web site containing almost 1, 400 questions and answers about FHA programs, appraisal, underwriting and processing n Searchable by key word and category n

Where to Get More Information FHA Resource Center TELEPHONE 1 -800 -CALLFHA (1 -800 -225 -5342) Available Monday-Friday from 8: 00 – 8: 00 (Eastern Time) E-MAIL ANSWERS@HUD. GOV Available 24 hours a day – 7 days a week!

Where to Get More Information www. hud. gov/fha The main web site for the latest news on FHA programs http: //www. hud. gov/offices/adm/hudclips/index. cf m HUDCLIPS - the source for FHA policy documents - handbooks, mortgagee letters and notices

Coming Up Now Training evaluation (Pop-Up) n Questions and Answer Session n Archive Site n http: //www. hud. gov/offices/hsg/sfh/talk/parc/phiarch. cfm

Thank you for your time! We very much appreciate your skill and professionalism in selling HUD properties and look forward to working with you Sell