Basic Terminology of Bulk REO Investing
By: Duncan Wierman
Many people are checking out bulk REO investments as a way of building some financial security in these troubling times. For the average reader, however, you may not even be aware of what bulk REO investments means, especially because REO is an acronym that has erupted into contemporary popular usage only recently. If you are one of those people who want a way to navigate the confusing terminologies behind bulk REO investing, here are the basic terminologies that you need to be acquainted with.
What are Bulk REOs?
Bulk REOs is an acronym that stands for 'real estate owned' and is a term that is often used in the banking as well as the lending world. The process of bulk REOs is summed up in the event where a home that is placed on mortgage is placed on a foreclosure because of the homeowner's inability to pay the mortgage or other dues that have been made with the real estate used as the collateral. Bulk has been often added to the REO acronym because investment in this field is most profitable when buying REOs in bulk, since these forms of real estate are much cheaper than others and are thus best when bought in bulk, the way wholesale buying is much more efficient than choosing to purchase goods from retailers. Some institutions will not allow individual REO buying.
What is a POF
The acronym stands for 'proof of funds' and is one of the basic requirements before you as an investor can begin your transactions to have a bulk REO package made. If you have ever bought a house, and you probably have since you are now looking at real estate as an investment option, you have probably realized that to purchase a single house alone requires the participation and help of many entities. Among those that may have been involved in the purchase of your home is the homeowner who intends to sell, you who intend to buy, a bank that may provide some of the funds that you need in order to purchase the house, a lawyer to settle the paperwork, and even an objective home inspector to act as a third party. The same goes with bulk REO investments. Because it entails much work, most banks will need a POF before proceeding.
What is Vetting?
Otherwise known as the critical examination or assessment part of the bulk REO buying process, it is necessary in order for the bank to assess not only the POF of the person who intends to buy the real estate, but also the actual willingness of the person to proceed with the transaction. After all, not everyone who has sufficient POF necessarily has the intent, and may simply be surveying his investment potentials.
What is an LOI?
Also known as the 'letter of intent,' this is the letter which the bank will entertain once you have undergone the vetting of the POF. The LOI will indicate what your exact bulk REO investment request entails, such as what type of property you are looking for, the price range that you desire, as well as the location that you will entertain.
What is a NCND?
The acronym stands for 'non-circumvent, non-disclosure agreement' and is a document signed by all the parties involved to secure the transaction. Here, the basic premise is that all parties involved in the transaction will not interfere with the proceedings of the REO investment and that inform
Information about the Author:
Duncan Wierman is a founding members of "Bank REO Property Deals, his company is connecting sellers of verifiable" product with qualified buyers. If you are interested in learning more about Bulk REO investing, his site also contains great information about how to started, interviews with other experts, along with sample sanitized tapes to review. Visit: http://www.BankREOPropertyDeals.com