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REO ASSET MANAGEMENT PROGRAM

Exclusive

REO Asset Management Program for Lending Institutions and Investors

It is no secret that many homebuilders (up to 50% according to the December Builder magazine) will go out of business in this severe downturn in the economy. However, the ‘properties’ have not gone away and there are many unfinished projects. The ‘client’ at this juncture, thus may now be a bank or investment fund. In the case of a Bank, it’s likely unwanted REO (Real Estate Owned), a distressed builder, or partially completed or foreclosed property. In the case of an investor (taking the property off the hands of a lender), there is still a need to do whatever is required to sell the property (complete, repair, insure, certify, etc). HMBD has solutions for all of the needs of this current environment.

More Than Just Insurance

HMBD has formed key alliances with builders, building management companies and valuation firms. These services in addition to our “exclusive” insurance and warranty programs offer “turn-key” solutions for banks and investors. We can provide not only the insurance and warranty solutions needed, but ANY service the situation requires. Our research has found that many banks and investors do not understand their liability exposures.

They are in uncharted waters. For example, a number of Banks indicate they simply want to ‘flip’ their REO and get it off their books. However, the bank can create a serious liability exposure with this approach. A Bank has a legal duty to their customer (and shareholders!) to maximize the value of the property/collateral of the borrower. If a bank simply hastily rids itself of an asset, without a proper/thorough evaluation of options, the Bank has created a liability exposure to the Borrower for that lack of effort and the corresponding increased amount due to the Bank.

In addition, Banks and lenders can certainly be subject to the implied warranty laws that builders face. This depends on the particular state, and the facts and circumstances. The bank can also have contingent liability exposures in addition to the Implied Warranty laws. What did the bank know, and when did they know it? Did they inspect the home? Did they find mold? Why didn’t they consider x, y and z? And what if the bank sells the property to, or engages, a relatively weak, inexperienced builder, and this is followed by construction defect claims for many years (10-year statute in California)?

Products and Services available:

• Comprehensive insurance assessment and solutions
  (general liability and property)
• Licensed qualified builders for construction
• Inspection, repair and maintenance
• Market Analysis
• Project Feasibility Study
• Risk management and loss control
• Sales management

For more information, please contact:

Todd Miller
todmil@hmbd.com
Cell: 714-271-5114

Len Miller
lenmil@hmbd.com
Cell: 949-422-0079

Office: 800-272-4594