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Jessica Said:

Want to start a cleanup business on foreclosures. Do I go to Banks or Mortgage Lenders & what do I show them.?

We Answered:

When a borrower defaults on his mortgage and the mortgage company (who is "servicing" the loan on behalf of the lender) forecloses upon the property, the property goes on the lenders books as an REO (Real Estate Owned). Large mortgage companies may have an REO Department which is dedicated to selling these properties and getting back as much of the value for the lender as possible. While they are attempting to sell, they must keep it clean and well-maintained. These mortgage companies usually engage another company called "Property Preservation" companies (or sometimes "Field Services").

These Property Preservation companies take work orders from the mortgage companies and make sure the trash is cleaned out, the branches are trimmed, the pool is cleaned, the house is winterized, etc. These Property Preservation companies engage a group of contractors who actually do the work. It sounds like your company would be one of these contractors.

Based on that information, I suggest that you target these Property Preservation companies. (There are large national ones and smaller, local ones). Go to them and tell them what you do. I doubt you will have to explain it to them since they are probably very familiar with the services that you perform. They will probably be very happy to know of more potential contractors to perform this work; especially since the number of foreclosures (and REOs) is steadily rising and is expected to swell tremendously this summer.

If the Property Preservation company gives you a job and you do it well, they'll continue to give you more jobs. If it doesn't work out well, they'll stop calling. It's that simple.

If you DO call mortgage companies or banks, ask them who handles their REO properties that are in foreclosure. If they don't know what you're talking about, ask for the Mortgage department. Many mortgage companies have alliances with third parties which handle some or all of the default functions (foreclosure, REO sales, property preservation), so they may give you the name and number of another company altogether.

These days, many people are buying up REOs. There are many law firms that buy up REOs. (I'm not even a mortgage company and I've been solicited at least a dozen times from people wanting to buy my REOs). Check with these little guys too. They property engage a property preservation company that they might refer you to.

Regardless of who you talk to, ask about REOs and Property Preservation (or Field Services) and you'll be directed in the proper direction. Again, if you're dealing with these people, you won't have to explain what you; they'll know already.

Good luck!