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VISIT US ONLINE @ DSNEWS.COM Mortgage's participation will give investors the opportunity to capitalize on current below-market prices on foreclosures owned by Fannie Mae, while also giving buyers the expanded ability to access financing on up to 20 investment properties." Prospect Mortgage also announced the launch of a Renovation Lending Correspondent Division to help lenders address the needs of their customers looking for home renovation loans. While changes and challenges in the for short sales? Esposito: Probably the biggest DS: What do you see as the biggest obstacles challenge for servicers is engaging the borrower. In some cases, the borrower may be avoiding any contact with the servicer, or you may be dealing with a pool of second homes that are vacant so you've got absentee borrowers, and a lot of times the borrower just doesn't understand short sales. Just like with modifications, it's financial marketplace have driven away some lenders from correspondent lending, Prospect Mortgage hopes to use its new division to help lenders capture new business. The com- pany is currently accepting charter partners for its new division. "With so many REO and foreclosure properties available today, renovation lending has grown from a niche product to one of the best financing solutions in today's market," Long said. According to endorsement data from important to establish right party contact. Once you've engaged the borrower, then it's up to you to essentially "sell" the short sale. For short sales to have strong execution, you have to be able to manage the process effectively because short sales are more complex than REOs and involve a lot more parties. For many servicers, their call centers HUD, Prospect Mortgage is the second-larg- est FHA 203(k) lender in the country. Long says the company achieved that position by focusing on and supporting its renovation lending platform. "Our Prospect Correspondent account managers have a track record of successful retail renovation lending experience," said Jim Ragan, renovation lending manager. "In addition to delivering detailed product train- ing, they will share best practice sales plans to drive new business and provide an ongoing source for product information." Ragan added, "We look forward to partnering with lenders to help them increase their revenue, capture a piece of one of the fastest-growing opportunities in today's market, and positively impact the communi- ties they serve." ServiceLink's Leo Esposito with the Skinny on Short Sales to sit down with Leo Esposito, SVP of loss mitigation and asset disposition for Irvine, California-based ServiceLink. The conversation quickly turned to short sales and the momentum this foreclosure alternative is experiencing in the marketplace. We asked Esposito about obstacles, timelines, and what to look for in the short sale space going forward. Here's what he had to say. DS News recently had the chance THE LEADER IN DEFAULT SERVICING NEWS function like a collections department. At ServiceLink, our call center staff is more like a sales team. They know the ins and outs of short sales and have the knowledge themselves to answer any questions. They are able to explain the credit implications, tax implications, and the incentives tied to a short sale transaction. getting better. Servicers are feeling much more comfortable with short sale transactions, and investors are demanding them. Servicers in general are moving from a reactive model to a proactive one when it comes to short sales, and it's making a difference. From receipt of a short sale offer, DS: Are timelines for short sales improving? Esposito: Timelines are definitely realistically, it's a 65-day process. We shoot for 45 days. If you take into account listing and marketing time as well, 120 days on the market for a short sale property is considered "good." going forward? Esposito: Servicers have realized DS: How will short sales fit into the picture they have different options for pursuing a liquidation strategy with the borrower, which include short sale, deed-in-lieu, or REO. Short sales have gained momentum over the last few years. Servicers have been able to reduce their losses by 10 to 15 percent with a short sale versus moving the borrower into foreclosure. As we go forward, the market will move the pendulum to stop somewhere in the middle between short sale and REO. default servicing in print and online @ dsnews.com 10.2012 Historically shunned by creditors, short sales are becoming the resolution of choice as we make our way out of the crisis. FRAUDULENT SHORT SALE As short sale activity increases, so ANATOMY OF A does the potential for fraud, putting servicers in the precarious position of deciphering between swindles and legitimate flips. HOUSING PAIN HITS THE POLLS Recent study reveals a distinct link between foreclosure rates and voter turnout with default-heavy communities posting softer-than- average figures. SHORT AND SIMPLE Thanks to new rules aimed at easing the process and proce- dural steps servicers can take to avert roadblocks, short sales don't have to be a long shot. Help shape the next issue of DS News. Drop us a line at Editor@DSNews.com. 79