Chris Hopkins is executive vice president at Regis Development, a property preservation company based in Phoenix and operating across the Southwest and in California. Hopkins has been with the firm for about a year and heads many of its REO programs. Previously he was senior vice president of operations at D.R. Horton [stock DHI][/stock]. For this edition of In This Corner, Hopkins discusses the benefits of the Department of Housing and Urban Development's 203k rehab program and other issues facing REO. HousingWire: Standard & Poor's recently put the value of the nationwide shadow inventory of homes seriously delinquent, in foreclosure or REO at about $450 billion, representing more than four years supply. How are these properties going to get sold? Chris Hopkins: A large percentage of the Arizona homes sale inventory is comprised of stale and unsellable homes. There is a large number of homebuyers who cannot see past minor and cosmetic changes to a property. Educating the Realtors about the HUD 203K product, provides a selling solution while incorporating the restoration funds in the loan. The HUD 203K loan solution provides the vehicle that will move this REO type of property. HW: What needs to be done to the property to get it suitable to be shown and sold? CH: Most often, these properties need minor repair, paint and appliances. HUD does have some requirements but our experience thus far has shown us that most of the properties we see are well within the HUD guidelines. HW: What products are available for borrowers — homeowners and investors alike — to accurately gauge if a foreclosed properties presents a viable option to purchase? CH: Again, the 203K for the borrower is a great solution and lenders are loosening the purse strings for refinances, which are up slightly.  Although the investor currently does not have the ability to obtain a 203k loan it does give the them the ability to market the property unfinished as a 203k renovation project, without laying out the upfront costs. There is a buzz about expanding this product to investors in the near future. HW: Regis Development was initially a homebuilder in the Phoenix area, and expanded to Las Vegas and Southern California. Those areas have been overwhelmed by foreclosures, as the housing crisis unfolded the past few years. Why? CH: Regis started as a homebuilder in Arizona. Once we switched our focus onto property preservation and renovation we expanded into nine states. Those three markets were highly inflated with a large amount refinancing and of transactions happening at the peak. Each of these markets has been in the top 5 in the nation for default, thus creating their percentages. HW: Where too many homes built? CH: No, the factors are more economic than population driven. If that were the case counties such as Santa Barbara and Ventura would be insulated, which they were clearly not. HW: As the company focuses more on the preservation and sale of distressed properties, what are the biggest challenges Regis Development is seeing when rehabbing a property? CH: Educating the real estate agents on their options and teaching them just how simple a 203K project can be with the right industry partner.  Our systems give clients the information as work is scheduled and completed in real time. The process sends information and provides current status to anyone involved rather than someone calling for updates or hunting down contractors. HW: What can lenders and real estate agents do to make a property attractive for a potential homeowner or investor? CH: Again, education is the key here. If the real estate agents are reluctant to get involved in a renovation project, they are leaving thousands of properties off the radar. Regis enables the loan officer or real estate agent to close a 203k transaction and monitor the project with minimal effort while still providing a superior customer service. Have someone perfect for In This Corner? Email the editor.