Scott Coloney, a lifelong entrepreneur, founded the Foreclosure Response Team
in 2008. Before starting the company, Coloney created Orbitz.com
and sold it to the One World Alliance
. Then, he started the Coloney Group with his father in 2003, and by 2007 it had become the one of the top selling RE/MAX
teams in the state of Florida.
The Foreclosure Response Team assigns real estate agents in its network one point of contact for all of their short sale listings from pre-listing to post-closing. Fresh from speaking on the short sale panel at REO Expo
, Coloney sits down with In This Corner
to explain the new demand for short sales.
There was a lot of buzz about short sales. How important are they going to be going forward?
It's a growing segment of the market. If agents and brokers pass up those listings and just refer them to other agents, they're losing brand recognition and signage. They're losing referrals that can come from those listings if done successfully.
But to do a short sale, agents and brokers need resources in place to handle the transaction. They shouldn't be using paper files. They need to be on some sort of paperless system. They need to be highly organized, document all communication. They need a team, someone to handle loss mitigation, someone to handle title, someone to handle the servicers. They should be looking outside the box at other solutions.
How important are real estate agents to the housing industry?
This is a war on foreclosures. The army on the ground are the real estate agents, and they've been overlooked. I have dedicated my life to short sales and feel like I'm the general arming the troops. We've created a natural solution that works with servicers without having to have a contract with every servicer.
A real estate agent is assigned a loss mitigation representative, a title company representative, and they're all working in same system. Everything's paperless. They have one system to learn. Without this help, you're turning the agents and brokers into processors. They're not processors. They need to be out selling homes.
What else in the liquidation process needs to be streamlined?
The whole waterfall could be streamlined. You don't have to have an iron curtain between modification, short sale, deed-in-lieu, and REO. Right now, you can go through the short sale process, and you can collect all the documents, have an offer in hand for the bank, and if for some reason it didn't go through, it goes into REO and that buyer who would have paid for the short sale isn't notified.
Over and over, they'll turn around and sell to someone else for less than what they could have had from that short sale buyer. There needs to be a streamlining of the short sale to REO process.
The theme of REO Expo seemed to be "REO isn't just REO anymore." Bank of America said they're doing everything they can to put short sales ahead of REO, and they're the biggest lender in the country. How much has the industry changed in the past few years?
Short sales were around a long time ago. It started to creep up and become more popular in 2007, and they've gained momentum since then. Short sales will be the preferred method of liquidation through 2011 and 2012. It's a win for the borrower and servicer and community.
Now, they're very complicated. The volume is just too great. The lenders can't just take a year to foreclose on everything, because the name of game is to sell as fast as possible and limit supply. They have to do both, and they're racing to get rid of the borrowers and credit damage and bad loans.
So, who's buying them?
A lot of people are investors and real homeowners. The problem for the real homeowner or owner-occupant is that they're going to buy a house to move, and they have a timeline. For instance, the kids are going start school in the Fall, and they need to close before then. They're not going to be looking to flip the house. They're living in it.
Our goal is to streamline the process to the point that the homeowner can buy a short sale during the summer and have kids going to school in the Fall. It doesn't have to take longer than that.