PROTOCOL FOR BULK REO PURCHASES
Below are the five to six documents the buyer will be required to submit to the Seller when ordering Bulk REOs. Please review the definition of these documents below. On the next page is the protocol and procedures that are followed when processing a Buyer’s order.
B. SOFT POF (Proof of Funds Bank Letter)
C. MFA (Master Fee Agreement)
D. PROTOCOL
E. NCND
F. BRIDGE AGREEMENT (If Applicable)
A. LOI FORM. Only Principal Buyer must complete and sing this form. Any additional Buyers that provide SOFT POF must sign the LOI FORM and a BRIDGE AGREEMENT.
B. SOFT POF. Soft “Proof of Funds” letter must be from a financial institution that is holding the liquid funds. Lines of credit POFs must indicate that Buyer may use funds to purchase REOs. A POF form a national title or escrow company is also acceptable. A bank statement can be provided with an authorized bank officer’s contact information. International Banks POF must state that funds can be wired and received into a U.S. Bank branch or affiliate within 24 hours. The POF must also provide an authorized bank officer contact that resides in a U.S. Bank branch or affiliate.
C. MFA (Master Fee Agreement). This agreement should be signed by the Principal Buyer, a Buyer Rep and up to two intermediaries / brokers if applicable. Any other parties that feel they should be compensated will need to be compensated directly from whichever signing party they are working with.
D. PROTOCOL. This document must be read and signed by the Buyer so that they are aware of our procedures.
E. NCND (Non-Circumvent Non-Disclosure). Buyer, Buyer Rep., and Brokers / Intermediaries must complete and sign this document. When the Seller receives this document, all parties names and information are registered into our database, whereby a copy is sent to our Seller’s Corporate Office. This document is strictly enforced and is designed to protect each party on the document.
F. BRIDGE AGREEMENT defined: This agreement is only used when an additional Buyer (i.e. Co-Buyer) , is providing their SOFT POF to the Principal Buyer / Buyer Entity. This agreement authorizes the Principal Buyer / Buyer Entity to purchase bulk REOs on the Co-Buyer’s Behalf. This agreement must be signed and notarized by the Co-Buyer when submitting an order.
STEP 1. Submit a Bulk REO order. All buyer, Buyer Representative, Brokers / Intermediaries must provide completed and signed documents A-E, and F if applicable. (Documents listed on top of page 1)
STEP 2. VERIFICATION OF POF. Seller and or Seller Mandate / Attorney will verify “SOFT POF” directly with Buyer’s bank. This process normally takes a couple of days. Once the POF has been Proofed Up / Verified, Seller Mandate / Attorney will compile an REO tape (approx. 3-5 business days) and release the REO tape to the Buyer for their “due-diligence period”.
STEP 3. THE REO TAPE. Upon Buyer receiving the REO tape, Buyer will be required to open an escrow account and may select one of the 25 National banks or Title / Escrow companies to open a Buyer’s escrow account in the Buyer’s Name, otherwise Seller will select an escrow company. The LOI is then sent to escrow. Buyer will have a maximum due-diligence period ten days (10 days) to approve or reject the tape. Once the Buyer has approved the REO tape, Seller will provide a HUD purchase contract (summarizing the transaction) for the Buyer to sign and notarize before submitting to escrow. (Buyer will receive specific instructions for funding.) Buyer is to immediately wire their funds to escrow.
STEP 4. CONFIRMING MFA FEES. Seller will confirm that they have each party’s bank wiring information and fee percentage to forward to escrow prior to closing. (Only those parties that have signed the MFA will be confirmed.)
STEP 5. ESCROW. Buyer is expected to immediately close escrow no more than 72 hours after accepting the REO tape.
REORDERING. The Buyer can place another order by submitting a new LOI FORM and a current SOFT POF with each new order.