There is vast speculation among many real estate analysts that short sales will be very prevalent this year as delinquencies and foreclosures continue to be a major problem throughout the country.
According to Lender Processing Services, there are over four million properties nationwide delinquent on their mortgages by 30 or more days and 1.8 million mortgages that are 90 or more days past due. Both are figures that will only entice lender-servicers to try to negotiate a short sale with a distressed borrower.
At the MBA’s National Mortgage Servicing Conference, Brent Taggart, executive vice president of business development at Green River Capital, said he wants to hear more statistics about whether delinquencies are on the rise or if they will be going down in upcoming months.
Taggart told this publication he is specifically looking forward to Fannie Mae and Freddie Mac general sessions. “I want to have a broader consensus from people that short sales is a viable loss mitigation tool that they’re pledging to use it going forward in 2012,” Taggart said. He is curious to learn if delinquencies are happening for subprime products or somewhere else because it not only affects the mortgage business, but the general economy too.
The West Valley, Utah-based asset management company determined that door knocking is one of the “best” tools in order to contact borrowers who are not paying their mortgages. In the third quarter of 2011, GRC had a right party contact rate of 57% by going directly to a borrower’s home and having face-to-face communication. Of that 57%, GRC was able to get slightly more than 14% of these distressed borrowers to do a short sale, 17.5% said they wanted to pursue a repayment or a modification and 1.5% wanted to do a deed-in-lieu.
“We’re getting good contact which is good information to know because we can send that back to the servicer,” Taggart said. “They know that we’ve offered the borrower all of their options to determine whether to pursue a short sale, loan modification, or continue towards foreclosure.”
While at the conference, Taggart said he also wants to speak with others to know what their expectations are for the mortgage industry this year. Taggart stressed that he wants to know what his peers think servicers will be pushing for this year and if they will need help managing whatever this may be.
The conference is a great opportunity to hear from my peers and some of the larger servicers and get feedback from them on what is happening in the industry, he said. It is a chance to “brainstorm ideas” about solutions to the housing crisis.
