227841 Resource 213695 126221 1 1236432598644 1254091756679 Controlled Key Issues in Special Servicing

Special servicers surveyed at the MBA National Mortgage Servicing Conference rank "Minimizing Recidivism" as top priority for loan modifications.

We recently asked respondents in the mortgage servicing industry to tell us what are the important issues that Special Servicers face, and which possible advances are most important to the Special Servicing process.<br /><br />The daunting numbers are becoming all too familiar and ingrained.&nbsp; The <a title="Hope Now Alliance" href="http://www.hopenow.com/" target="_blank">Hope Now Alliance</a> reported 1 million loan modifications in 2008 and an expected 2 million, or more, in 2009.&nbsp; Many companies, both large and small, have attempted wide-scale &ldquo;mass modifications&rdquo; where all loans are treated the same based on criteria like current DTI ratio.&nbsp; Not surprising to veterans, these efforts have resulted in rates of recidivism on the order of 50%.&nbsp; Clearly, there is demand for large volumes of loan modifications and a need to do them in a way that doesn&rsquo;t soon return the borrower to the crushing vortex of the foreclosure process, in which borrower and lender alike lose.<br /><br />For participants in the Special Servicing industry (servicers, consultants, attorneys, service and technology providers), scalability is the most important challenge they face.&nbsp; They live the numbers that most of us only read about and they know they need to be able to do more.&nbsp; Almost as important is the ability to control the cost per distressed asset and leverage existing systems while doing so.&nbsp; The first is a basic measure of business effectiveness in servicing.&nbsp; The second communicates a fundamental reality.&nbsp; The need to make changes is here, now.&nbsp; We haven&rsquo;t time to change out the large, sophisticated, and brittle servicing systems of record.<br /><br />So what do Special Servicers intend to do?&nbsp; For those we spoke with, the most important thing, in some eyes the ONLY thing, is to find a way to get the borrower into the right modification the first time.&nbsp; Do this and you spend far less time considering and implementing a modification which allows you to immediately scale your business.&nbsp; It also radically lowers your cost per distressed asset.&nbsp; It&rsquo;s the double benefit of scale and efficiency.<br /><br />In order to put borrowers into the right option the first time Special Servicers are looking for ways to have ALL workout options continuously recalculated and compared by NPV.&nbsp; And not by a generic NPV, but by an NPV that reflects the judgment, mod-success and recidivism experience and financial needs of the servicer for each mod-type.&nbsp; But to make the solution complete, once the options are ranked by NPV, the servicing agent needs the capability to optimize the mods, tailoring options to the specific circumstances of the borrower, the servicer and the investor.<br /><br />Overture has built a <a title="Mozart for Special Servicing" href="item/224432">new Special Servicing system</a> that satisfies all these requirements.&nbsp; We hope you investigate.<br /><br /> 9 application/xml false Distressed Assets Homeowner Affordability and Stability Plan Loan Modifications Loss Mitigation Mortgage Finance Servicing Special Servicing Transformational solution for the management and resolution of distressed mortgage loans http://home.overturecorp.com/public/item/224432 Mozilla/4.0 (compatible; MSIE 8.0; Windows NT 5.1; Trident/4.0; .NET CLR 1.0.3705; .NET CLR 1.1.4322; Media Center PC 4.0; .NET CLR 2.0.50727; Zune 3.0; .NET CLR 3.0.4506.2152; .NET CLR 3.5.30729) 127.0.0.1 127.0.0.1 $Admin 173.160.40.189 false true false false true 213695 blog blogsite/Overture/web