According to industry statistics, home values have been rising at a fast clip, helping troubled borrowers dig their way out of a default situation without succumbing to foreclosure.
Just tell that to the people in Cleveland or in the Pocono Mountains region of Pennsylvania. Or anyplace which once relied upon a strong manufacturing base to create jobs (the number of manufacturing jobs has declined 17% in the U.S. since 2000). Despite overall healthy conditions in the housing economy, there are many pockets of economic depression in the country. And those pockets account for the most challenging real estate-owned scenarios.
The field services industry is there to help. In a servicing world that has come under increasing scrutiny, field service companies are there to help lenders manage and preserve REO without running afoul of regulations. That means assessing and repairing damage, winterizing homes where appropriate, making sure the grass is mowed and generally preparing the property for sale. When a loan goes bad and all a lender has left is the collateral, it's doubly important that the condition of the collateral be protected.
In recent years, more attention has been paid to the field services sector of the business than in the past. There are a variety of reasons for that, one of them being the expectation that with new and untested loan products expanding in the marketplace, the number of foreclosures could increase. If home prices stagnate or take a tumble, that increase could be dramatic.
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