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52 COVER FEATURE COVER FEATURE PROPERTY RESTORATION KEITH C. HEMMER Chief Business Development Officer, Alacrity Services Now that we are approaching the end of 2015, it behooves us to begin looking to the future and contemplate what trends we will see in 2016. We have seen suggestions that REO is a bubble and that we will continue to see a downward trend in REO and conveyance properties coming to the market, but what does the future really hold? As we saw in the onset of the market decline, the industry can fluctuate with a change in legislation, market conditions or even a natural catastrophe. It might be more accurate to say that we are seeing a decline in the properties originating from the 2008 market decline. e ripple effect in this trend is that larger institutions appear to be consolidating their vendor networks into a handful of large players. It is these large players that will earn the bulk of the REO and conveyance work going forward. With that said, the marketplace will continue with a competitive nature and therefore top performers will earn a larger pool of work. With a stronger housing market we will also see a decline in the restoration work order size. People are willing to invest more money into an individual property, as the local market can support those efforts. at means that institutions may contribute fewer dollars to a property in order to fix and flip it. As properties begin to see increasing days on market, the focus will be to get properties "off the books" during this healthier economic period. With the shortened time frames we will also continue seeing tighter oversight of the restoration process by institutions. ey will continue to use technology and seek out emerging technology to stay informed and aware of the process. is will dial down the need for institutions to have constant physical presences onsite. Technology will force vendor networks to sharpen their skills and maintain tighter controls of their involvement and the overall process. While the REO and conveyance market lends itself to forecasting, there is still a great deal of unknown that could impact the future. Such is the nature of forecasting—only time will tell. COVER FEATURE SERVICING JOHN VELLA Chief Revenue Officer, Altisource In 2016, the servicing industry will see a continued push by large servicers and the government- sponsored enterprises' (GSE's) to sell non- performing loans to mitigate mortgage servicing rights (MSR) related issues and risk associated with carrying non-performing assets. e mid-tier and special servicers will be the beneficiaries of these assets and will have to manage the regulatory and asset challenges that come with the portfolios. Scalability and compliance will be two key priorities for servicers in 2016. While there is general consensus that the coming year will be good for the originations market, there is uncertainty on how strong it will be. Servicers are working hard to be prepared to manage a wide range of volume. In tandem with this, servicers are also committed to compliance. Leading into the new year, we are seeing much more interest in vendors that can provide a consistent, end-to-end experience that is engineered for scalability in each step of the process, and built for compliance that flows throughout the system. Servicers will be required to evaluate their current technology and vendors as they face increasing scrutiny from investors and regulators. e need for sophisticated vendor management, procurement and vendor oversight will increase their cost to service while occupying resources and budgets. Emphasis will be placed upon servicers to engage with proven vendors who can provide multiple services within a disciplined framework. As default volumes normalize and decline, some vendors will exit the space or not properly invest in resources, technology and infrastructure, potentially putting the servicer at risk. Procuring vendors who have been proven, tested and have a strong capital base will be a priority for servicers in 2016. COVER FEATURE TECHNOLOGY EDMOND BUCKLEY President, Aspen Grove Solutions Implementing comprehensive vendor management strategies, regulatory challenges and the speed of delivery for technology companies were hot topics at financial services conferences this year. e status quo does not apply in today's environment, and it certainly won't apply next year as work providers become more demanding and require rapid response. In 2016, regulators and service providers will continue to focus on how the industry hires, manages and processes the work performed by third party vendors. So what does this mean for future technology? In the coming year, there will be a greater focus on background checks, vendor qualifications, training and whether certain services require certifications or licensing. For example, this might mean integrating work orders with vendor management and proof of service – which is exactly the area of focus for the housing industry from regulators, to business, to consumer. It might also mean a "national" vendor may be required to implement additional technology to effectively manage "regional" and/or "local" vendors by collecting compliance data as well as evidence the services were performed. Technology will be the key to successfully navigate through these additional requirements. Service providers are looking for technology that is easy to use and quick to implement, given the numerous regulatory requirements and the speed in which the requirements are changing. As such, technology providers will be challenged to complete faster production release cycles and must remain nimble and flexible to meet service provider's fluctuating transaction volumes as well as the ever-changing regulatory environment. Cover Feature: 30 Top Executives Tell You The Future Cover Feature: 30 Top Executives Tell You The Future Cover Feature: 30 Top Executives Tell You The Future EXPERT OPINION The ripple effect in this trend is that larger institutions appear to be consolidating their vendor networks into a handful of large players. –KEITH C. HEMMER

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