The Right Tools Significantly Improve Productivity
The right technology can strengthen data access and workflow as well as improve communication between REO managers and service providers.
Web-based solutions are available that enable REO managers to automatically loop service providers into the property preservation process, enhancing communication and reducing time lags, which helps dispose of the real estate assets even quicker. That's crucial in today's turbulent market.
Many REO managers have turned to national field services companies to address efficiency and quality control concerns, according to Chad Neel, president and chief operating officer, FIS Asset Management Solutions in Jacksonville, Flor.
By deploying a proven technology solution that includes a rules engine, REO brokers can quickly set up requests to automatically trigger specific activities associated with the time of year, such ad winterization, identify properties in specific geographic areas and determine occupancy status.
"Tasks with detailed instructions are automatically routed to vendor queues that alert partners to assignments as soon as they log into the system. Once outside partners complete their tasks, they can provide any required feedback instantly via the Internet," says Mr. Neel.
"Rules can be preset to automatically track task statuses and provide real-time reporting on a winterization program. REO managers can instantly access any information they may need, including when a work order was completed, who completed it, etc."
It's important to choose the right provider, he adds. Often, REO managers engage real estate brokers to manage winterizations for them in local markets across the country. "However, when working with brokers in this capacity, REO managers can face significant communication and quality control challenges. Staying in touch with busy brokers is difficult and it is nearly impossible to directly ensure the quality of completed work. This can leave REO managers vulnerable to unexpected losses."
A recent example of picking a provider came when Ticor Title Company of Orange, Calif., a real estate title company and subsidiary of Fidelity National Financial, Inc., selected DepotPoint, Inc.'s Default and REO TrackPoint online workflow applications to streamline the tracking and management of thousands of properties in all stages of distress.
TrackPoint, a vertical processing system, collapses the time it takes to move properties through the default process. Ticor customers, typically large mortgage lenders and private equity firms, should benefit from reduced property carrying time and costs as a result.
In addition to detailed property tracking, TrackPoint features electronic calendaring with alerts and digital document processing. Audit-ready 24/7, TrackPoint ensures nationwide compliance to foreclosure guidelines as the only system with state-by-state exception handling for debt disputes, forbearance, loan reinstatement, bankruptcy and other issues.
Default TrackPoint and REO TrackPoint are available on a standalone or integrated basis from DepotPoint, which provides online information and technology services to banks, mortgage servicers, outsource service providers and investment firms.
DepotPoint's integrated TrackPoint service delivers an end-to-end work process solution, starting with a property in default while the bank is still negotiating with the borrower, all the way through disposition of the property if it becomes REO real estate owned by the bank," said John Macias, vice president of Ticor.
"More than 100 law firms, among others, will have access to the service. TrackPoint is an incredibly comprehensive and powerful platform."
Given the high volume of distressed properties today, it's time-consuming and expensive for mortgage lenders, servicers and outsourcers to place them into foreclosure, manage and market them," said Tom Gordon, executive vice president, business solutions, DepotPoint.
"In this environment, servicers and outsourcers are forced to hire more staff, train them and manage them among multiple service centers. With such high support costs, banks and servicers are eager for each team member to handle more properties, and to load-balance between servicing centers."
Mr. Gordon explained that when a property reverts to the bank as an REO asset, it usually takes from six to nine months to assign the property to an REO outsourcer, ready the property for sale, and then market it to a new buyer. Each day that the property is on the books the bank incurs significant cost; more specifically, 1.0 to 1.25 percent of the value of the property per month. This is a direct hit to the bank's earnings.
By collapsing the time required to dispose of the property, the bank can save thousands of dollars on each property.
TrackPoint generates daily task alerts based on each property's individual status. This ensures that processing staff only address the highest priority tasks each day, and that tasks don't fall behind schedule.
Also, the requirements for each state and for each lender differ. Default TrackPoint and REO TrackPoint calendar tasks based on the requirements of each lender and of each state, which dictate schedules from 55 days in Texas to 400 days in New York before a property can be sold as a foreclosure.
The Orange, Calif.-based Fasthold Capital has launched its unique loan advisory Settlement Optimization Process, designed to streamline the often complex process of liquidating distressed assets. (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/