# REO Preservation Services



## Guest (Dec 13, 2010)

HELLO CONTRACTOR TALK:

Since business was slow, we decided to join a national REO, Property Preservation company. We are muddling through their many requirements, but work is starting to come in. Pricing is a bit on the low side, and we are reading some horrible stories of charge backs and late payments. Can anyone share any experiences (good and bad) about the business.. Any advise would be GREATLY appreciated!

Thank you,

Office Manager.


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## Guest (Dec 13, 2010)

Best advise?

Wow. :whistling:shutup::shutup::shutup:

The absolute best advise I could give you is to start with an existing contractor that has been in the business for several years and learn the ropes. Otherwise that rope may hang you in the next several years.

Remember HUD or your service company can charge you back for work if *"they feel"* is subpar or they *"think"* its not done right OR another contractor/realtor/inspector *sabatoges* your work OR the service company sends you out to do a lock change *before* the property is in or out of redemption (cost us 5 figures). The chargeback time frame is now up to 5 years from the date you did the work. 

Do your due dilegence. Read your contract and if you do not FULLY understand it than go to a lawyer and have them review it with YOU. 

Most importantly you don't have to have done anything wrong in order for YOU to pay....Read your contract concerning indemnification and defense costs. Example: you did everything by the "book" or the work order but the Service Company "jumped the gun" by a few days and now they are being sued---you pay all their legal defense costs with most companies...its like there is no time frame since you are paying the defense costs so all the vultures (lawyers) line up to collect from you the charity line. :boxing:


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## Guest (Dec 16, 2010)

so you're saying there is no defense to their "allegations" of their feelings and thinkings????? even in our crappy judicial system you are sometimes innocent until proven guilty.....Like me and you talked about before, i've never been charged back for anything...probably because i've never had e/o insurance, but if some company came back to me a year or so later and said we're charging you back i'm pretty sure my response would be to go $%*$ yourself....

the way i feel about it is i have to show pictures to prove the work was done....I mean alot of things can happen after repairs or REO work is done, especially on a foreclosed property, it's vacant and anyone can come in or break in and no one would know.


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## Guest (Dec 16, 2010)

I agree with both Fremont and D&R.


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## Guest (Dec 20, 2010)

I signed on with a company earlier this year after they contacted me. Had to jump through a lot of hoops just to get on the roster. Then there there was the expense of E & O. Thought that with the economy the way it is there would be lots of work. Couldn't be more wrong. The people who assign the work orders have their favorites that they are used to working with. Then there is the cumbersome reporting system and the cost of time for entering data in said system. All for a small payoff. The "budgets" they give you are ridiculous and they take their % off the top. Canceled after 6 months. Just not worth it. Be very careful. Any reason to back charge and they will. 

I don't want to ID the company here but if you want to contact me sen email. [email protected]


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## thanohano44 (Aug 5, 2012)

D&R Services said:


> so you're saying there is no defense to their "allegations" of their feelings and thinkings????? even in our crappy judicial system you are sometimes innocent until proven guilty.....Like me and you talked about before, i've never been charged back for anything...probably because i've never had e/o insurance, but if some company came back to me a year or so later and said we're charging you back i'm pretty sure my response would be to go $%*$ yourself....
> 
> the way i feel about it is i have to show pictures to prove the work was done....I mean alot of things can happen after repairs or REO work is done, especially on a foreclosed property, it's vacant and anyone can come in or break in and no one would know.


 
exactly


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## thanohano44 (Aug 5, 2012)

DBF General said:


> HELLO CONTRACTOR TALK:
> 
> Since business was slow, we decided to join a national REO, Property Preservation company. We are muddling through their many requirements, but work is starting to come in. Pricing is a bit on the low side, and we are reading some horrible stories of charge backs and late payments. Can anyone share any experiences (good and bad) about the business.. Any advise would be GREATLY appreciated!
> 
> ...


 
my advice, take more pictures that neccesary and take pictures at every possible angle. that way, you have a fighting chance in any disputes. stay on top of your book keeping also. get your work done on time and earlier if you can.


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## Guest (Dec 24, 2010)

Hey I don't want to de-rail this thread, but after reading through a few in here, I don't understand why you guys are even working for these companies. Why not go out on your own? What am I missing here? could someone please explain if you don't mind?


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## thanohano44 (Aug 5, 2012)

Some may still be on because they need the work. Also, most nationals have a clause in the contract that you have to give them a 30 day notice otherwise they will hold your receivables. Some stay on to get all of their money. I stay on because it's work and I have more good experiences than bad. I usually win 90% of all disputes I make. I do that with pictures and required documentation on each job and visit to the property. 

I have 2 regionals that o work for that owe me close to $57k in late and non payments that they have no answer for. Just heard one is filing BK and the other didn't have insurance in Arizona and one of their contractors didn't either. Property flooded and froze, causing astronomical damages on a multi million dollar home in northern Arizona. So all of their receivables are on hold till they get that figured out. I'm counting that $38,624 a loss. No insurance will back date and cover their policy. I expect them to file BK too.


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## Guest (Dec 26, 2010)

Crap sorry to hear abt the possible future losses. 

Been there done that. We will never work for any regionals for this exact reason and many other reasons....
Hope New Years brings better luck


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## Guest (Dec 27, 2010)

thanohano44 said:


> Some may still be on because they need the work. Also, most nationals have a clause in the contract that you have to give them a 30 day notice otherwise they will hold your receivables. Some stay on to get all of their money. I stay on because it's work and I have more good experiences than bad. I usually win 90% of all disputes I make. I do that with pictures and required documentation on each job and visit to the property.
> 
> I have 2 regionals that o work for that owe me close to $57k in late and non payments that they have no answer for. Just heard one is filing BK and the other didn't have insurance in Arizona and one of their contractors didn't either. Property flooded and froze, causing astronomical damages on a multi million dollar home in northern Arizona. So all of their receivables are on hold till they get that figured out. I'm counting that $38,624 a loss. No insurance will back date and cover their policy. I expect them to file BK too.


Sorry to hear that.

Have you considered placing liens on the properties? At this point, your probably not getting anything from the regionals. So, maybe, that will get you something a little at a time.


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## Guest (Dec 30, 2010)

i agree...lien the properties


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## Guest (Dec 30, 2010)

plus show up at their bk hearing....they might have items to liquidate.....it's a little bit of work and paperwork on your end but it's better then taking a 57k bath


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## thanohano44 (Aug 5, 2012)

Unfortunately, the contracts I signed do not allow me to place liens on the properties. If I do so, I open myself up to lawsuits as well as forfeiture of monies due. 

I know I know, they're filing a BK so what do I have to lose. I'm researching to see what else I can do.


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## Guest (Dec 31, 2010)

Bankruptcy normally negates a signed contract that places restrictions on you. Go talk to your lawyer. I'm fairly sure he/she will say place leins thus the banks will have to pay you in order for them to sell the property. I would be doing this in a big hurry though and find out what requirements your State has for you to place those leins. good luck


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## Guest (Dec 31, 2010)

I agree 100% with Fremont.

Not to mention, it's going to be pretty %(@%&@$ hard to stand in front of a judge demanding that he / she enforce terms of a contract that they are in direct breach of themselves which is what resulted in the actions you are taking.

You see, their failure to pay is a breach of contract on their part. Thus, all bets are off at that point.

In full disclosure I'm not a lawyer, this shoulds not be construed as legal advice, seek council from a licensed lawyer, and I never played one on T.V.

Happy New Year ya'll.

I truely hope this works out for you. But it will be a tough row to hoe:w00t:


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## thanohano44 (Aug 5, 2012)

DreamWeaver said:


> I agree 100% with Fremont.
> 
> Not to mention, it's going to be pretty %(@%&@$ hard to stand in front of a judge demanding that he / she enforce terms of a contract that they are in direct breach of themselves which is what resulted in the actions you are taking.
> 
> ...


my attorney advised me to contact LPS and Safeguard and attempt to get paid by them. I did that, and they won't even talk to me. what's up with that. Attorney said I could go there and remove those items, but I do not have a work order allowing me to do so, which would make me tresspassing. going off of previous work orders, we have due dates in which to complete work by. so if my visit to the property is no within those time lines, I would be tresspassing. That contractor doesnt own the property, and was given a work order to do a specific scope of work. removing the items I was not paid for doesn't give me the right to be on the property. I can be taken out to the wood shed in a lawsuit by Chase, LPS, Safeguard, Litton etc.

a real tough pill to swallow right now. closed out my books for 2010, total this regional owes me is $87,420. with some pay over 3 months behind.

then theres the other regional who owes me around $11,800 who claims to be fling a BK as well.

The regionals both told me to just 1099 them. as if that makes it all better.


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## Guest (Jan 11, 2011)

thanohano44 I assume the nationals mentioned have approved your invoices for payment. In addition to trying to contact them you need to send them a *final demand letter for payment* one through regular mail and one certified. Make sure you reference the invoice numbers outstanding and that they have been previously approved. Advise them they are in breach of contract and give them seven days to pay. Also inform them if they fail to pay you will pursue additional measures to recoup your amount due. Do not mention anything like suing them. 

Additionally if you know who the client was that assigned the national the job I would contact them as well and inform them that you have not been paid for the work you performed and inquire if the client has paid the national. It may take some fortitude but you can usually get some answers especially when you get to the point of telling them you are going to lean the property.

If nothing else you will set wheels in motion. You might be surprised how fast you receive a phone call.


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## thanohano44 (Aug 5, 2012)

Rich51 said:


> thanohano44 I assume the nationals mentioned have approved your invoices for payment. In addition to trying to contact them you need to send them a *final demand letter for payment* one through regular mail and one certified. Make sure you reference the invoice numbers outstanding and that they have been previously approved. Advise them they are in breach of contract and give them seven days to pay. Also inform them if they fail to pay you will pursue additional measures to recoup your amount due. Do not mention anything like suing them.
> 
> Additionally if you know who the client was that assigned the national the job I would contact them as well and inform them that you have not been paid for the work you performed and inquire if the client has paid the national. It may take some fortitude but you can usually get some answers especially when you get to the point of telling them you are going to lean the property.
> 
> If nothing else you will set wheels in motion. You might be surprised how fast you receive a phone call.


 
thanks!! I will.


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## APlusPPGroup (Apr 14, 2012)

thanohano44 said:


> Just heard .... the other didn't have insurance in Arizona and one of their contractors didn't either.


I have a real problem with this. Why did the national allow them to work without insurance? If they allowed their vendor/contractor to work without insurance, I believe THEY are ultimately responsible for the damages.

Has anyone asked them THAT question yet? Perhaps you'll have recourse at the top of the food chain.

Also, you may not be allowed to place liens but is there a clause that prohibits you from filing a small claims action against EACH PROPERTY they owe you for? 

If you file action against each property, you may eventually get them in front of a judge who shouldn't have a problem awarding your claims. If they don't show up, a default judgement goes against them and you win your claim.

I'm not sure if they can absolve themselves of any small claims judgments in bankruptcy court, however. I'm getting ready to find that out myself since one of my clients recently went belly-up.......... or so I heard. Fortunately, they owe less than $500 so it won't be a huge loss if it's written off.

You've got quite a bit of money at stake. Instead of spending twice that amount on lawyers, try filing small claims first. You can file these on your own and only pay a small fee.

I certainly wish you the best of luck. BTW. Can you name the contractor here so we know who to avoid? Or are you worried about backlash if you identify them?

Linda


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## BPWY (Apr 12, 2012)

I really shouldn't read threads like this. It gets my BP way too high!!!




As for disputing charge backs my experience has been a 1000% exercise in futility. 
Once the national's mind is made up an act of congress won't change it. Your email dispute is only a formality so that if/when they get sued they can claim in court to have investigated the dispute and still found you to be in error.



Thanahano good luck in collections. I'm with the other guys. LIEN and quick like.
They didn't pay you, that voids the contract so go with the lien. Maybe one day these banks will have to wake up and realize that they are only screwing themselves by going with nationals who go with regionals and go back to the way it should be. Using a local real estate agent to make sure the work gets done right.


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## Guest (Jan 16, 2011)

a1propertyclean said:


> I have a real problem with this. Why did the national allow them to work without insurance? If they allowed their vendor/contractor to work without insurance, I believe THEY are ultimately responsible for the damages.
> 
> Has anyone asked them THAT question yet? Perhaps you'll have recourse at the top of the food chain.
> 
> ...


Good idea...

Although, keep in mind, Small claims court is for suits under $9,999.00 if I remember correctly. So if you have a single invoice over that amount it gets kicked into a much more complex arena.


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## APlusPPGroup (Apr 14, 2012)

DreamWeaver said:


> Good idea...
> 
> Although, keep in mind, Small claims court is for suits under $9,999.00 if I remember correctly. So if you have a single invoice over that amount it gets kicked into a much more complex arena.


Those would be the only problems. But I would hazard a guess that the majority of the properties' invoices won't total that much and filing each property as a separate action will avoid suing for the entire balance of everything that's due.

Linda


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## Guest (Jan 17, 2011)

In PA if you are incorporated or an LLC you can not file a small claims on your own, you must be represented by an attorney, so you still end up paying those fees. If the claim is for a small amount it isn't worth it and in a majority of issues you can not collect attorneys fees. Been there.


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## APlusPPGroup (Apr 14, 2012)

Rich51 said:


> In PA if you are incorporated or an LLC you can not file a small claims on your own, you must be represented by an attorney, so you still end up paying those fees. If the claim is for a small amount it isn't worth it and in a majority of issues you can not collect attorneys fees. Been there.


So a sole proprietor can file on his/her own but not any type of corporation? 

Once the filing is completed, are the agents of the corporations allowed to represent the company or does the attorney have to be there, too?

Linda


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## Guest (Jan 17, 2011)

I think Iowa is going the same way on the small claims for the LLC/Corps. We had to refile our LLC's by Jan 1, 11 due to the new law changes and the lawyer said something abt small claims suits and having a lawyer but my eyes/brain was glossed over by the 100th signature:whistling

Just another way for the lawyers to maintain a steady paycheck


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## Guest (Jan 17, 2011)

Yes to the first question a sole proprietor can file on his/her own. As to the second the district justice in our area required us to have an attorney file for us, but the amount was less than $2,500 so we were able to represent ourselves. Had the amount been over $2,500 the attorney would have been required to be there.


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