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FDIC Non-Profit Bulk REO Program Update

UPDATE - This program has drawn some red flags within our company !! On further follow up , we have learned the program is now closed! I was told that the FDIC fulfilled over 3B in orders and will not be taking anymore orders. No further information was given. The non-profits were no disclosed.

This program was developed by the Chairman of the FDIC, Sheila Bair, as a way to benefit non-profit organizations, put money back into communities, generate fees for the FDIC and help failed banks get their non-performing assets off the books and put them back in a position where they’re able to lend again, all of which should help stimulate the economy.

The program entails working with non-profit organizations that are designated to act as the seller in the disposition of these assets. The FDIC has created an asset management platform to facilitate this process.

The program is primarily focused on bulk residential REOs at this point, although commercial properties and Notes will be available soon. Minimum purchase price is 50m and the price point for these assets is 30-40% of market value. Following is the process to acquire these assets:

• Buyer submits LOI with soft POF to register with the non-profit organization. (broker fee agreements need to be completed with buyer separately)

• NCND and MFA will be sent to the buyer to complete and return (2% of purchase price goes to the non-profit organization and 1% to platform)

• FDIC formatted LOI will be sent to the buyer to capture the specifics of their order. At the same time a bank letter will be sent which they will bring to their bank to put on the bank’s letterhead, stating the buyer has funds at least equal to the amount they wish to purchase. Bank letter must be signed by two bank officers and include their Swift #. (funds will be verified through Swift communications.)

• Once all documentation is received, a call will be scheduled for the buyer to speak with an FDIC attorney, and possibly representation from the non-profit organization along with a compiler. The purpose of the call is to make sure the buyer understands the process to move forward, and to ensure that the compiler knows what kind of product they wish to purchase.

• The compiler will pull product and send back to the buyer for review. Typically the buyer will be presented with far more product than they actually plan on purchasing to ensure they will have more than enough to choose from to fill their order.

• Buyer submits list of properties they wish to purchase and requests a purchase contract.

• Buyer completes due diligence on product.

• Purchase contract signed, 10% of purchase goes into escrow, FDIC completes title work in order to present warranty deeds and closing date is identified.

• Process from beginning to end should take less than 30 days.

The FDIC are continuing to work on the backlog of orders already placed and expect new orders can be submitted shortly.

Below is the current list of FDIC Failed Banks:

http://www.fdic.gov/bank/individual/failed/banklist.html

For further information about FDIC and buying assets:

http://www.fdic.gov/buying/index.html

MEMBERS ONLY GET ACCESS TO THE TRAINING CALL (HIDDEN BELOW) ON THE PROGRAM

Where do we get our tapes from?

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