Did you know that just 60 days or so into 2010, over 20 banks had already failed? In 2009, hundreds of banks across the United States failed. While no one likes to hear of banks failing in communities across the country, it can be good news for foreclosure cleanup business owners and others who operate real estate service businesses (eg, plumbers, general contractors, electricians, etc.). Why?
Because these failed banks are often acquired by larger and/or more solvent financial institutions, which means they need the services your company can offer.
To explain, when a bank fails, it falls in the hands of the Federal Deposit Insurance Corporation (aka the FDIC). This is the initial step. Failed banks go on to be acquired by other banks, as mentioned above, because they have customers that still need to be serviced. This is, in part, why you see the FDIC seal in every bank. They protect the everyday consumer in case a bank fails.
Understanding What Happens When a Bank Fails & Why It Helps Real Estate Services Businesses
Oftentimes, once a failed bank falls into the hands of the FDIC, they contract with larger property preservation companies to handle the maintenance of the failed bank’s real estate assets (eg, foreclosed homes, foreclosed commercial properties, etc.).
And this is where it gets interesting for you, the little to mid-sized foreclosure cleanup business owner. You see, these large property preservation companies are, in many cases, simply taking too long to handle all the requests for foreclosure cleanup work because they are just overwhelmed with the number of properties on their roster.
These properties can’t sit idle just because the bank that owned them failed. They need inspections, yard maintenance, winterization, boarding up, lock changes, etc. And, these larger companies simply can’t keep up.
Add to this – the more banks that fail, the more properties fall into the big guys’ laps. So what do they do? The contract with small to mid-sized foreclosure cleaning companies (like yours!) to help them at least try to keep up.
If you’re one of the lucky ones to be properly set up as a foreclosure clean up business – ie, licensed and insured — you can target those handling failed banks to get foreclosure cleaning jobs.
Who to Target When a Bank Fails to Get Ongoing Foreclosure Cleanup Jobs
As a foreclosure cleanup business owner, you would contact the REO asset managers within acquiring institutions (ie, the FDIC or whichever institution took over the assets of the failed bank).
While it may take some elbow grease to get through to them, getting an “in” with just one of these companies can provide you with all the foreclosure cleaning jobs you will ever need. So it’s definitely worth it to put in the time it takes.