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» VISIT US ONLINE @ DSNEWS.COM 25 THE STATE OF SERVICING Default servicers are expecting increased delinquencies in their Federal Housing Administration (FHA) loan portfolios in 2019, according to the annual Altisource 2018 Default Servicers Survey. e reason, the survey revealed, was due to the increase in the size of FHA loan portfolios. e online survey of 200 professionals from across the mortgage default servicing industry indicated that 86 percent of the respondents reported that their organization currently services FHA loans, with 72 percent of these respondents expecting an increase in this particular loan portfolio over the next 12 to 24 months. In fact, 77 percent of these respondents expect their FHA loan portfolio volume to increase by as much as 25 percent. However, servicers said that they encountered difficulties while identifying effective vendors for foreclosure/trustee auction services. Fifty-seven percent of the servicers surveyed said that the current data analytics and modeling within their FHA loans-related Claims Without Conveyance of Title (CWCOT) program management could be better. Among servicers managing FHA loan portfolios, 73 percent said they were using third-party vendors as part of their CWCOT program management. While choosing these vendors, 95 percent stressed on performance as the most important factor in choosing a CWCOT auction vendor, followed by end- to-end capabilities/outside services outside of auction (91 percent), access to broker network (90 percent), access to data and analytics (90 percent) and marketing content and online presence as well as coverage (89 percent). While servicers said that they were using multiple vendors for their servicing needs today, they were also looking at consolidation opportunities in their vendor base in an environment of reduced default volumes, the survey revealed. An increasing number of servicers were open to considering a single-vendor approach for multiple services provided by them, the survey indicated. While 90 percent of the respondents said they were "very" or "somewhat" likely to consider such an approach, more than two-thirds of the respondents said the consistency and efficiency in managing the lifecycle of default/distressed properties were "very important" to them while selecting a single-vendor approach. Some of the other reasons cited by servicers for adopting a single vendor approach included compliance management (68 percent), access to data and analytics to support portfolio decisions (58 percent), stronger point-of- contact relationships (57 percent), and streamlined costs (56 percent). Looking at the attributes that servicers wanted in their single vendor, the survey indicated that 93 percent considered end-to- end default disposition capabilities and REO asset management very or somewhat important when choosing a vendor for managing their default portfolio. RECORD NUMBER OF HOMEBUYERS LOOKING TO CHANGE METROS According to the Redfin Migration Report, migration trend has reached a record high as one in four people searching for a home is looking to change metros. Twenty-five percent of home searchers looked to move to another metro area in the fourth quarter of 2018, up from 23 percent the year before. Nationally, the share of home searchers looking to relocate has been increasing at a steady pace since early 2017, and currently sits at its highest level on record since Redfin began tracking migration trends. e analysis is based on a sample of more than 1 million Redfin.com users who searched for homes across 87 metro areas from October through December. e metros with the highest net outflow in Q 4 2018 are San Francisco, New York, Los Angeles, Washington, D.C., and Denver. Net outflow is defined as the number of people looking to leave the metro minus the number of people looking to move into the metro, the report indicated. Data on outflows reflected an upward trend with San Francisco, New York, Denver and Washington, D.C., outflows up considerably compared to the previous year. Of all San Francisco Bay Area residents using Redfin, 24 percent were searching for homes in another metro, up from 19 percent during the same time period a year earlier. Denver shifted from modest net inflows and outflows in 2017 to strong net outflows toward the end of 2018—making the biggest move up the list. Redfin found that 24 percent of Denverites on Redfin.com searched for homes outside the area, up from 17 percent a year earlier. Seattle has reclaimed its migration- destination status with a surge in net inflow and the fifth-most popular migration destination in the fourth quarter, behind nearby Portland and the relatively affordable metros—Sacramento, Phoenix, and Atlanta. However, the number of home sales in Seattle recorded a sharp decline at the end of the year down by 22 percent in December. e search interest still remains high, the report indicated. "People looking to leave high-tax metros for a city with mountain views and top-notch hiking are more likely to pick Seattle over Denver because Washington State doesn't have an income tax. In fact, the top destination for Denverites looking to leave is Seattle," said Daryl Fairweather, Chief Economist at Redfin.