REO & Field Services
As evidence piles up that the economy is finally getting on track, we can stop worrying about foreclosure and REO problems, right? Wrong. Most people in the mortgage servicing industry probably got the right answer to that question ven as economic statistics suggest a rebound may be taking hold, the job market remains weak and expectations are that the rate of home price appreciation has slowed.
That adds up to a potential increase in the number of properties that will come back to a lender through foreclosure, deeds-in-lieu and other circumstances. Delinquency rates are hardly at an alarming level, but the growth in nontraditional mortgage products and the increasing frequency of underwriting exceptions mean there are probably more wobbly loans out there than might have been the case in the past. Until recently, the number of loans in foreclosure was at a record high, according to the Mortgage Bankers Association of America. Mortgage insurers have also reported seeing an increase in defaults and claims. And anecdotally, REO vendors across the country have reported seeing an increase in business inquiries.
Lenders like to manage loans, not real estate. The real estate specialist, especially an inspector, contractor, or real estate agent in the local market, probably has a better handle on what needs to be done to maintain, repair and sell a property than a national lender with offices far away from the property in question. After all, when you have a leak, you call a plumber, not a mortgage lender.
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