Nonprofit Groups See Increase in Donated REO Properties
May 30th, 2012
Servicing Management released an article in their April issue entitled Nonprofit Groups See Increase in Donated REO Properties, quoting Robert Klein.
Nonprofit Groups See Increase in Donated REO Properties
Call it the ultimate act of charity: Nonprofit housing groups are receiving an increased volume of real estate owned (REO) properties, either at steeply discounted prices or as giveaways from servicers.
“We’ve been getting properties from banks since 2002,” says Charles Konkus, president of West Dundee, Ill.-based Real Estate Donations. “But there’s been a rapid increase since the housing crisis began in 2007 and 2008, and that’s because they have too much in their inventories now.”
Wells Fargo Home Mortgage offered 1,246 donated REO properties and about 700 discounted sales to nonprofits in 2011, according to Tyler Smith, vice president. In 2010, by comparison, Wells Fargo made 295 REO property donations and about 1,500 discounted sales.
“Our goal this year is to do 2,000 donations and 1,000 discounted sales,” says Smith. “A lot of that depends on the REO inflow. We don’t really control the properties that we’re getting and the condition and value that they’re in.”
Citigroup’s donations and discounted sales to nonprofits have been “steadily increasing” over the past three years, according to Natalie Abatemarco, managing director of Citi’s Office of Homeownership Preservation. Last year, the bank donated 205 properties and sold 19 properties at a discount to nonprofits.
“I really think the trend will go upbecause there is now really increased capacity for more donations,” she says. “They’ve worked out the kinks on this. In many cases, the real reason the number of properties we have been donating has been increasing is that the nonprofits themselves have developed their internal capacity to understand the system. As they increase their capacity, we’re able to donate or sell at a discount more and more homes.”
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Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with nearly 1,000 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.