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Keith Schlemlein is unfazed as he walks quickl y throughthe wreckage. He makes notezs on a clipboard about each room in the foreclosed home. He has not made an official tallyh ofthe damage, but this much, he is certain: “It will cost the lender a Schlemlein has recently joined a fast-growingy cottage industry. As foreclosures skyrocket acrossthe state, businesses are springing up to watcg over homes for the lenders. For a fee, thesse home tenders will keep theproperties up, prep them for a sale and boarde them up to keep vandalw out. Sometimes they act as middlemen betweejn the lender and the homeowner or builder who lost the propertyyto foreclosure.
Often they call themselves REO assetmanagers — meaning they handlr Real Estate Owned properties, an acronyj for properties reclaimed by Their ranks have been growing nationwide for the past two right along with the rising number of foreclosures. But the industry is hard to largely because the businesses are small and vary widelgy in whatthey do. One local expert estimated there are atleast 1,00p0 such firms nationwide that specialize in the business. The industry’s rapid rise reflect the struggle and costs faced by banks and credir unions as they try to absorvb a tideof foreclosures. It also suggests that the foreclosuree crisis is farfrom over.
In Washington, foreclosur e filings are up 46 percent toabout 9,7000 so far this year compared with the same time perioxd last year, according to national data tracker RealtyTrac. Economistzs widely expect a third waveof foreclosures, as unemployment takesw its toll on incomes. The number of REO propertie is climbing, too. They now represent 35 percent of all foreclosurezs inKing County, compared with 7 percent two yeare ago. Across the state, where images of vandalized, abandonedc homes are still the property-tending industry is just beginning totake off. Many of the new businessea — often small — are former real estate agentse orbuilding inspectors.
They’ve been hard hit by the housinf market’s downturn and are searching for new revenue saidChris Matty, a spokesmann for Bellevue-based DepotPoint, which providezs technology for REO asset managers nationwide and also tracks “Companies have always been in placed doing this, but because of the huge volume of foreclosures, there’sx been an expansion of the industry,” said Schlemlein entered the business for this very reasojn — as a way to bulk up He formed late last year to compensate as revenuwe slowed at his 25-year-old residentiall building inspection business.
As banks largely quit lending to their need for inspectors Revenueat Schlemlein’s inspection business, NorthWest Constructionn Control, slipped to $2.4 million last year from $3.6 millionj in 2007. At the same time, Schlemlei said, clients started askingh him to take care of foreclosedproperties — new homees that were built and unsold when the housintg market tanked. Often the homes weren’ even finished. “No one was really keeping a good eye on said Schlemlein. “The grass was getting tall.
Thesre are maintenance issues thatbanks haven’t had to deal with So Schlemlein, tapping into his vast networjk of local subcontractors, stepped in as a forecloser handyman of sorts. Soon, the REO side of his businesa took off. He formed the new companty latelast year, pulling in $70,000 in the first quarter of this year. He expects revenue of $300,000o this year. Now Schlemlein, a family man who’s also a Pierce County search-and-rescue is on the frontlines of Washington’s foreclosure crisis. He spends many days every monthg driving hundreds of milesaround Pierce, King and Snohomishg counties, checking on foreclosed Sometimes he rides his Harley.
More often than not, he brings his yellowa Labrador, Buddy, as a partner on the lonelgy journey.