Source Media Mortgage Servicing Conference 2015
Source Media’s Mortgage Servicing Conference was held at The Westin Galleria in Dallas, TX. This conference featured a variety of panel discussions on challenges facing the mortgage servicing industry. The session topics included compliance, vendor risk management, mortgage servicing rules best practices, GSE reform and more.
During the conference, Safeguard’s Chief Operating Officer Michael Greenbaum participated as a panelist in a session moderated by Safeguard’s Assistant Vice President of Investor Relations Kellie Chambers. A summary of this session is below.
Overcoming the Challenges of Property Preservation
Moderator: Kellie Chambers, Safeguard Properties
Panelists:
- Michael Greenbaum, Safeguard Properties
- Candace Fraley, Ocwen
- Adrienne Villalobos, PennyMac
Servicers’ Biggest Challenges
The panel discussed a survey completed by The Collingwood Group which reported that 39% of participants identified fulfilling Federal Housing Administration (FHA) property preservation requirements as the toughest challenge. Loss mitigation programs, first legal action timeframes and compliance with due diligence timeframes all tied for the toughest challenge at 17%.
Loss Mitigation Programs
Panelists expressed that the challenges related to FHA requirements for preservation and loss mitigation activities are directly related to the increase in third-party involvement and not necessarily the requirements themselves. For example, the entrance of new field service managers (FSM) has led to many new interpretations of conveyance condition requirements. The varying opinions across the FSM’s have resulted in a dramatic increase in the number of reconveyed loans to servicers. In reaction, servicers are requesting to repair borrower neglect items, ultimately delaying conveyance.
First Legal Action Timeframes
Other third-party factors include the increasing length of the foreclosure process in many judicial states. This presents challenges in maintaining the property to neighborhood standards, as well as increases the likelihood of repeated vandalism, the costs in preservation, insurance and taxes. Also contributing to the challenges is the market changes in sale prices and number of days on the market over the years.
Solutions for the Future
As a solution, the panel suggested increasing communication with FHA and their vendors to work towards one definition of conveyance condition and realign third parties back to the requirements defined in ML 2010-18. Additional solutions included increasing communication with local code enforcement to provide education on servicer requirements and exploring an expansion of preservation requirements to move towards neighborhood-like conditions, which would reduce neighbor and city complaints.
The Source Media Mortgage Servicing Conference was held in Dallas, TX.
