REO Gets Noticed in Mortgage Field Services Market
Experts say the relatively young mortgage field services industry is fast evolving into a self-regulated marketplace that sees further growth in areas like real estate owned preservation.
"REOs are an emerging area of the mortgage field servicing business in it's own right," Alan W. Bunker, president and CEO of Spectrum Field Services, Inc. and past president of the National Association of Mortgage Field Services told MSN.
An emerging trend within the MFS industry that will continue in 2007 is the consolidation of the REO "as a very defined segment of the marketplace," he said.
"If you go back even one or two years ago, that work was being done but not to the extent where you would say: It is a segment of the industry," he explained. "It is an emerging segment of the industry and that I think is a very significant development."
Until a few years ago, the focus of property preservation was pre-foreclosure work, argued current NAMFS president Paul Magaha, compared to the after-foreclosure or REO preservation trend "that has made foreclosed properties very much part of our industry."
Education is another trend both executives believe will continue in 2007.
"Probably the most important thing regarding the mortgage field services industry in 2007 will be education, training and certification," Mr. Bunker said.
Mr. Magaha agreed the MFS industry has evolved to the level of the industries it interacts with and impacts when it comes to modern technology, quality control, and best business practices. The nonprofit organization was created to connect member firms and offer them opportunities to improve their business and their lives. According to Mr. Bunker even though at 20-25 years old the industry is relatively young, "it is maturing at a very fast paste at this point in time."
Now the most important NAMFS goal is education that ultimately leads to certification in various areas. There are several ways of achieving that goal, including a series of courses offered during NAMFS national and regional conferences and a manual based on member best practices. Part of that process he said is the rewriting of the NAMFS property preservation manual initially created a decade ago. It will be reviewed by committees created by members who have on the job expertise on specific areas, he said. "If you need to educate your membership you need a good starting point!" The areas covered in separate manual chapters include risk management and real estate owned property preservation and maintenance.
"As the individual chapters are completed we'll go ahead and publish them as we go," he said. "So the manual is a work in progress, a living document. I would expect it to maybe always be a living document because as procedures change, the needs change and the industry will always add chapters accordingly."
One significant example, he noted is the REO preservation chapter, which only two years ago would have not been important enough to be part of the manual but now "is an important part" of the mortgage field services business.
He sees creating a NAMFS manual that really becomes the industry standard as a three step process that starts with gathering the best of the industry expertise, using it as a basis for member education and then certification that helps makes sure those who receive the training are acknowledged for what they are doing.
As to legislation however, he does not expect to see specific state, federal or county level regulatory measures being taken in 2007, or MFS industry requirements similar to the attorney or CPA licensing for instance.
"I think what's really happening is that that kind of impetus is coming from within the industry itself," he noted.
NAMFS is a nonprofit that represents 400 member firms, mostly mom-and-pap type businesses across the country. The industry serves mortgage servicers, banks and other parties all of which, Mr. Bunker said, are interested in seeing these efforts take place since it means "the quality of the work we perform for them can only get better."
"We have seen both encouragement and support from the mortgage servicing industry about what our industry is doing to improve the quality of the work we do regarding education and the certification process," he said. "Yet, my perception is that most of the push for that is coming from within the industry itself."
"A couple of years ago the emphasis within our organization was on structuring a central type learning opportunity for our members, which has been a heavy lifting load for the education committee," Mr. Magaha said. The approach is multifaceted, not only what you do in your everyday job, but how to run a business, deal with public relations, operate your office technology."
To serve that purpose, he added, NAMFS is redesigning its website so it features all these learning tools along with testing opportunities that allow members to get different levels of certification.
MFS industry members, he said are a handful of national companies serving as intermediaries linking the industry with the larger banks and government sponsored entities, and regional companies. These MFS national companies engage regional firms that represent "the best quality in the field and select who they want to do business with."
"Here's where the education and certification comes in," he explained. NAMFS' database of regional members, their qualifications and references allows national members to network and cooperate in the state level. (c) 2006 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com