How do you transform complex and historically accidental transactions into tightly controlled, premeditated actions?
That’s the question facing many servicers today as they look to improve their short-sale processes in advance of what are expected to be record-high volumes. Though home retention remains the order of the day, it is well understood that servicers’ ability to transition delinquent borrowers into reperforming status is limited. Bloated real estate owned (REO) inventories and their associated costs, however, make the traditional response to defaulted loans – foreclosure – less appealing for servicers than ever before. Add in the ever-present political pressure on servicers to avoid foreclosure, and the newfound popularity of short sales seems only natural. REO management has always been an expensive function of servicing, but today’s lengthened holding times, combined with municipalities’ sharpened focus on limiting blight, are prompting servicers to consider every alternative to foreclosure – particularly short sales, which provide borrowers the added benefit of a dignified exit from the
