- Business and Employment
Foreclosure Cleaning Biz Advice: What are “Assuming Institutions” & How to Make Money from Them
When banks fail, it’s bad news for communities. And, while no one likes to hear of community banks failing, it’s actually good news for foreclosure cleaning business owners. “But,” you may be wondering, “what does that have to do with ‘assuming institutions’ and how my foreclosure cleanup business can make money from them?” Read on.
Assuming Institutions Defined
When a bank fails, its customers don’t stop being serviced. Payments on car loans are still processed. Applications for small business loans are still reviewed, assessed and approved/denied. And, home loans (mortgage) payments are still credited to consumer accounts.
This is because when a bank fails, its assets fall into the hands of the FDIC, aka, the Federal Deposit Insurance Corporation. After this, these assets are usually bought or taken over by other banks and financial institutions. These are called assuming financial institutions (aka acquiring financial institutions).
FDIC Takes Over Failed Banks & Oversees Their Assets
How to Get Foreclosure Cleaning Jobs from Assuming Institutions
Acquiring financial institutions often contract with larger property preservation companies to handle the maintenance of the failed bank’s real estate assets. Many of these assets are foreclosed properties – commercial and residential.
And this is why it pays for small to mid-sized foreclosure cleanup business owners. You see, these large property preservation companies get drowned in work – especially in the midst of the current financial crisis. They are taking way too long to service all of the properties assigned to them.
Furthermore, these properties can’t sit vacant/abandoned because it leaves them open to things like vandalism, vagrants and squatters taking up residence and all around ruin and disrepair.
So, larger property preservation companies contract with small foreclosure cleaning companies to do things like inspections, cut the grass, shrubs trimmed, winterization, board up windows, etc.
What You Need to Get Foreclosure Cleaning Jobs from Acquiring Institutions
The first thing you need to know is that you must be a proper business. Banks and larger property preservation companies won’t even consider doing business with you if you’re not licensed and insured.
Once you have the proper foreclosure cleaning business insurance and license, then you can start contacting the REO asset managers. It can be the FDIC or the acquiring institution that now handles the assets of the failed bank.
FYI, REO is the acronym for real-estate owned. It’s what banks call their foreclosures (a term they prefer not to use; go figure).