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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 50 July 2024 E X P E R T I N S I G H T S B rian Cullen is CEO and Co-Founder of SingleSource (founded in 2000), a provider of property services support- ing the U.S. housing industry. Brian's responsibilities include daily oversight of all aspects of the company as well as various strategic sales and marketing ini- tiatives. He graduated from John Carroll University with a Bachelor of Science in business administration and received his MBA from the University of Pittsburgh. MortgagePoint recently had the op- portunity to chat with Cullen to discuss the nation's housing shortage issue and actions that can be taken to replenish the housing shortage. Q: With U.S. housing inventory so tight right now, how can vacant properties play a role? Brian Cullen: Vacant properties hold the potential to provide significant relief to today's inventory challenge. Many of these properties can be repaired and listed for sale, resulting in increased inventory and relieving some of the current pricing pressure. Of course, this is not possible with the vast majority of vacant properties available. Roughly half of the approximately 16 million vacant homes in the United States are vacation homes, second homes, or rental properties, and another four million are permanently vacant. In most cases, the owners either do not want to sell or are not able to for various reasons. That leaves vacant units that are fore- closures owned by the bank. Although it is difficult to determine the exact number of foreclosures, we have seen 15,000-20,000 national REO acquisitions per quarter over the last few quarters. By focusing on these properties, and refurbishing them if necessary, we can add viable options for buyers in a market thirsty for more choices. This not only helps potential homeowners, but also strengthens the vitality of local neighbor- hoods and supports the overall health of the real estate market. Q: Why are there so many vacant properties? Cullen: There are many factors at play, but one major reason is the impact of COVID-era foreclosure moratoria on the nation's banks. When these moratoria were put in place, all loans, including loans on vacant properties, were lumped into one moratorium bucket. This goes well beyond borrowers who were unable to afford their payments. It extends into life events like divorce and death, which are other reasons why properties are vacated and subsequently placed into the moratorium bucket. This has created an unnecessary bottleneck, causing properties that could otherwise be available and habitable to sit empty. Even now, four years later, we are still seeing the effects of the foreclosure moratoria. In our view, it becomes a real missed opportunity for a market desperate for inventory. Q: What is the downside of vacant properties? Cullen: Vacant properties present a number of challenges, not only for the housing market, but also for neighborhoods and communities. When a home remains vacant, it is frequently because the mortgage has not been paid for some time. And if the borrower was not paying their mortgage, they probably were not paying property taxes or keeping the property in shape, either. Without regular maintenance, these homes can rapidly deteriorate, which can lead to code violations and legal and financial complications for whoever holds the asset. By itself, neglect is a huge issue with vacant properties. It does not just impact the property in question—it creates a rip- ple effect on the surrounding neighbor- hood and area. When a vacant property is allowed to fall into disrepair, value will decline, and surrounding homeowners may see their property values decline as well. Plus, vacant homes often become HOUSING INVENTORY: HOW DID WE GET HERE? Brian Cullen of SingleSource Property Solutions discusses the nation's hidden housing inventory and how to access it. By E R I C C . P E C K