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Beware of a lender of using an out-of-state contractor to rehab their REO properties.  Last year I had an REO assigned to me in Boise, Idaho.  The lender's asset manager asked for a couple of local contractors to provide rehab bids.  Neither local contractor was selected.  

Instead, the lender used an out-of-state contractor that is based out of NYC area and purportedly travels the country rehabbing properties for this lender.  The contractor basically replaced carpet and painted interior.  The quality of work was substandard and worth no more than $10,000 - $12,000 based on my experience for such rehab work on REO properties..  

I was shocked when I learned the bill was for $46,000.  There were several items on the bill the contractor did not do.  For example, it included a  fee for a trash out, but the home was already in broom swept condition since it was a cash-for-keys.  

The contractor kept calling and asking me to confirm the items on the bill were completed so it could get paid by the lender.  I stated that much of the items were never done and refused to confirm all the work was done.  When I mentioned the problem to asset manager, he seemed indifferent to the matter.

I suspect that there was some kick back going on between the asset manager and contractor.


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There should never be an instance where a contractor roams the country to go where the lender has rehab work.  some contractors do have multiple contractors in various states.  With that being said, you need to report this to the asset management company immediately.  I am assuming this was a government loan that went into foreclosure, therefore, the  lender should have government oversight, since they provide loans.  I would contact the government probably start with Fannie, Freddie, etc or find out who to contact.  This sounds like major kickback to me.  Fannie had an asset manager that was trapped by a Realtor.  The asset manager wanted "kickbacks".  The Realtor called the feds and they set up a sting in CA, at a Starbucks...  It was great!!  So, I would not let this rest.  The bad people need to be removed from the business.  I hope you have before photos of the property.


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