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DS News November 2022

DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.

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51 "It doesn't matter if you are managing your own network of workers or relying on regional or national providers, the ability to get the work done in the field according to client/investor specifications is becoming more and more difficult." —Phil Johnsen SVP/General Manager, Servicing & Real Estate Solutions, Altisource One thing we've heard about is an ongoing demographic shift to a higher concentration of rural versus urban properties that go through the foreclosure sale process and are taken by the investors/insurers back into inventory. Have you seen this, and if so, what challenges are presented by this higher concentration of properties in "hard to serve" areas? Absolutely. Starting back in 2013, the GSEs and HUD adopted the use of bulk note sales to investors, where the best properties (metro, good condition) were packaged together and sold as portfolios. e recent run-up in housing demand/prices also drove most of the desirable properties quickly off the market. What is left are the more rural properties and properties in poor condition. ere are far fewer concentrations of properties, even in rural areas. Properties are fewer and farther between, driving vendor demands for extra trip fees. Overlay high inflation and supply chain disruptions and the conditions in the field have never been more challenging. Vendors are demanding higher fees, due to skyrocketing gasoline prices, rapidly increasing dump fees, and wild fluctuations in material costs. Aside from pricing pressures, timeline expectations set back in a time when properties were much more concentrated are now outdated and not considerate of the current wide disbursement of properties. Vendors survive by setting routes and grouping work orders together, so they minimize "windshield time." More-remote properties mean the routes result in less-frequent visits to the properties. Are there any other critical challenges you are facing headed into 2023? If so, how are you navigating and preparing for these? All of these challenges listed above are exacerbated by a labor environment where the rules regarding worker classification (employee versus contractor) are evolving. States are increasingly adding legislation making the classification of workers as contractors ever more difficult. e industry is not keeping pace with the pricing demands of a contractor-based model, let alone a W2 working force.

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