Elan Prystowsky's job as a real estate agent and property manager has an unusual aspect. He also helps run an organization called Credit Workshops Inc., a part of the service of Rubin Montgomery Realty on 21st Street in Philadelphia.

What does Credit Workshops do?

It is like an SAT prep course, only instead of helping its students prepare for the college entrance exams, it helps them improve their credit ratings so they can get mortgages on the property Rubin Montgomery wants to sell them.

How does it work? First, Elan's company gets credit reports on the applicants. Then it helps them arrange payments on outstanding debts to improve their credit standing.

This can be as simple as helping to show future lenders that they can be relied upon to meet recurring obligations, such as telephone bills or even layaway plans for consumer durables.

Since most borrowers with bad credit histories fear talking to banks, Credit Workshop helps them do what a bank would have done if the loan was theirs and a debtor had come in to discuss the situation.

In fact, Elan suggests that whenever a bank sees some shakiness in payment, it could do at first blush what his organization does.

Finally, if the potential borrower is ready, Elan's firm helps him or her prep for answering the questions that must be completed in the FHA workbook, if that organization is to guarantee the loan on the property Rubin Montgomery hopes to sell.

The cost: $600, of which $50 is for the credit report and the other $550 is refunded when the house is closed and the loan is sold.

"We have sold 300 homes in two years, so we must be doing something right," Prystowsky says.

How does Rubin Montgomery make its profit?

It serves as the buyers' agency for the people who come in looking for homes. The workshop program, if needed, facilitates the completion of the sale.

Since he also buys and sells distressed property on his own, I asked Elan, "If you were a banker with REO, what could you do to make the profit as large as possible or keep losses as low as possible in its liquidation?"

Elan's answer:

"First, I would try to work with my borrowers as soon as there is any trouble with their payments, to avoid the entire foreclosure situation - helping them the way that our credit workshops do. In sum, having no REO is the best way to handle the REO problem.

"Then, if I wanted to get as much as possible out of the property, I would invest several thousand dollars in fixing it up. We find that we get our investment back many-fold when the property we are selling looks a lot better than when we bought it.

"If the bank wants a quick sale, though, instead of going to brokers who need commissions and whose obtaining of buyers and mortgages will take a considerable amount of time, I suggest the bank develop a network of investors willing to bid on anything you have.

"And another way of gaining immediate sale is to advertise a foreclosure sale. When we do this, the phone rings off the hook.

"Finally, while any FHA-guaranteed loan is a snap - just let the government have it - on the more complicated deals that do not have governmental guarantee, it may be cheaper for the bank to hire a full-time REO agent to handle the entire situation, instead of working one on one with agents, investors, and brokers."

Finally, Elan suggests, "Don't overlook the advantage you have being a bank.

"If you arrange to provide a generous break for the investor, like retaining 30% of the paper to finance the purchase, you may find yourself with a definite advantage over others trying to sell property to the risk- taking investors who work in the REO arena."

Elan acknowledges that this advice, if taken, will take bread and butter out of his own mouth.

But he feels that clearing up delinquent properties and helping neighborhoods recover is a big enough job that there is room for effective direct bank operations as well as the advice and investments that are made by people like him.

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