DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/1265324
28 The Exchange Jesse Roth joined Auction.com in 2012 as the SVP of Business Development and Client Management, where he oversees the business development and strategic initiatives of Auction.com's national real estate disposition business. Roth's leadership has helped build Auction.com into the nation's leading real estate marketplace, with more than 200,000 residential and commercial sales and $46 billion in transactions. Under his leadership, Auction. com's client base increased by over 200% and asset volume increased by over 270%. Before joining Auction.com, Roth held senior management positions in portfolio management, capital markets, and servicing roles with mortgage industry leaders Citigroup, Fannie Mae, and GMAC. What are some of the key challenges you're seeing in getting properties turned around quickly and back into the hands of owner occupants? Most of the properties that have gone through defaults here in the recent past, and that we'd expect to go through default once claims increase, are not suited for owner- occupants. What we have found is that, either our clients, if they take the property back in as an REO property or a local investor acquires the property at the foreclosure sale, as a third- party buyer. Both entities are attempting to solve that problem, and they just have different approaches. e REO department at most clients is looking at it, saying, "How do I best flip this property to an owner-occupant?" But they're generally doing it from a consolidated location, managing properties all over the country. Whereas, this local, third-party investor that bought them at the foreclosure sale knows much more about the neighborhood, about what needs happen to that property to get it back into the hands of the housing stock faster. We've actually seen by going back and looking at data that one year after the foreclosure sale, almost 60% of properties that sell with third- party foreclosure are now owner-occupied versus only 40% of properties that revert to the lender. What factors are in play in the distressed market? ere are a couple of issues driving this. Number one is, just over the last year, we've been making significant investments, not only spending on marketing to drive more people to our online platform, but also in getting better at how we prioritize those assets and being more surgical in our marketing approach. We've also seen that, with the lack of supply, that has pushed people that traditionally wouldn't only buy foreclosure sales. ey've shifted to the online environment just because that's where we do have available inventory for them. e last piece is that many investors over the last few years have pulled out and sat on the sidelines. "Okay, it's getting a little too hot here, a little too frothy in terms of property values. I'm going to sit on the sidelines and wait for the next downturn to start." We've seen a lot of buyers say, "You know what? We think the next downturn is starting now, so I'm going to start looking at making some investments again." Do you think we're going to see more and more of the focus on the online auction side of things? I do. We've known for a very long time that 90% of home buyers start their home search online anyway. is institution that we have of forcing everyone into an offline transaction is antiquated in its approach. Being able to make an offer on a property digitally is just the next evolution of how real estate is going to be bought and sold in this country. You've seen it in other areas. For example, in Australia, 90% of homes are sold via an auction format. Even if it's not purely an auction format, the ability to "Being able to make an offer on a property digitally is just the next evolution of how real estate is going to be bought and sold in this country." Jesse Roth SVP Business Development, Auction.com Get to Know Industry Executives Beyond the Boardroom