Stewart Lender Services Develops REO Services for Community Banks
Stewart Lender Services, a subsidiary of Stewart Title Co., has created a boutique asset management and disposition solution model that offers REO services for community banks.
The focus of the disposition strategy is to maximize the value of a bank's assets in the shortest amount of time by having one-on-one communication with every individual lender to tailor SLS's business practices to meet the specific needs of each customer.
“Community banks have very valid concerns about the disposition of bank-owned properties given current market conditions,” said Michael Harris, senior vice president of Stewart Lender Services. “Stewart's solution provides customers with assurance that all of their assets are handled in the same high-quality manner.”
In order to help its clients save money and time, SLS's new business solution reduces a bank-owned property's days in REO by using a proactive approach starting as early as possible in the preforeclosure process, preserving the property upfront, maintaining its condition and accurately valuing the asset once it becomes REO. The management and disposition strategies can also be sized for each individual lender by using this type of approach.
According to Harris, community banks have “apprehension over value reconciliation” for an REO property. He added that the majority of his clients rely on the appraisal “cost” approach rather the “direct sales” comparison, such as a broker price opinion.
“We value a property accurately from the onset to save time and money for our client,” Harris said.
Harris said the Houston-based servicer's vendor partners are going to be compliant with local laws and regulations regarding vacant properties through this new disposition strategy.
“Stewart bucks the trend of most asset management companies that resist ordering title until a contract has been accepted,” said Landon Smith, senior vice president of Stewart Lender Services REO title division. “Stewart orders title upfront and begins working on issues that could delay the closing. This greatly reduces the overall number of days an asset is on the market and on the bank's balance sheet.”