This piece originally appeared in the August 2023 edition of MortgagePoint magazine, online now.
Over the past few years, foreclosure rates dramatically decreased artificially due to various federal mortgage relief programs and moratoriums on foreclosures created in response to the COVID-19 pandemic. Recent data from ATTOM Data Solutions’ Mid-Year 2023 U.S. Foreclosure Market Report reveals an increase in foreclosure starts to pre-pandemic levels across the country, heralding potential challenges and opportunities for servicers, trustees, and attorneys.
One of the major challenges lies in the capacity to scale staff efficiently. With the surge and fluctuations in foreclosure starts, the need for increased personnel to handle the rising demand is imminent. However, scalability is a double-edged sword. While the need for more staff increases during a rise in foreclosure starts, during quieter times it becomes economically unviable to maintain a large staff. Thus, this unpredictable variability poses a daunting challenge for trustees and attorneys.
Moreover, with increased foreclosure starts comes the amplified risk of potential errors, compliance issues, and oversights. Minimizing these risks amidst the rising volume of cases requires a robust, dependable, and efficient solution.
In response to these challenges, innovative solutions to outsource back-office functions to firms like Altisource Trustee Services emerge as an invaluable resource to trustees and attorneys looking to maximize the potential revenue from increased foreclosure starts by streamlining processes and optimizing operations. The outsourcing of back-office services, whether off-shore or on-shore, can help to minimize the risks associated with maintaining a dedicated in-house staff as foreclosure-file volumes ebb and flow (or surge!).
An increase in foreclosure starts doesn’t always lead to a similar volume increase in actual foreclosure sales, especially today where most homes in foreclosure may have significant positive equity. Homeowners today have options including a loan modification, refinance, or even an arm’s-length traditional sale prior to the foreclosure sale, all of which generate more positive results for the owner, lender, and even the community.
Unfortunately, “most” does not equate to “all,” and we may soon start seeing the number of foreclosure sales significantly increase nationwide. This will require not only the opening of a foreclosure file and a resolution prior to foreclosure but also the marketing of a foreclosure sale to help drive third-party sales (TPS). Ultimately, asset management of properties reverting to the beneficiary is needed as these hit the market as REO and CWCOT.
Maximizing recovery for beneficiaries and minimizing deficiencies for homeowners can be accomplished by aggressively marketing properties to sell as a TPS in auctions at trustee and foreclosure sales. A marketplace like hubzu.com offers an effective platform to market foreclosure sales and REO/CWCOT that did not sell as a TPS. This auction-marketing model facilitates transparency, efficient transactions, and potential for higher sales prices, providing an ideal solution for managing an increased volume of foreclosure properties. With an increase in foreclosure starts, an increase in REO volume should follow. Hubzu’s online auction marketing is a proven way to maximize returns on REOs while minimizing the risks associated with an increase in default properties on a lender’s portfolio.
On the other hand, Altisource Trustee Services steps in to alleviate the operational strain and risk management concerns for trustees and attorneys. As a comprehensive provider of foreclosure trustee services, Altisource’s offering extends to foreclosure processing, bankruptcy processing, and eviction management. Its services ensure full compliance with regulations, thus helping you reduce risks.
Perhaps the most significant advantage that Altisource Trustee Services offers in this dynamic environment is its scalability. With its ability to manage large volumes of foreclosure-related proceedings, Altisource empowers trustees and attorneys to adapt their operations to the market’s demands without bearing the cost and challenges of scaling their proprietary staff up and down.
Altisource can also provide an end-to-end solution providing field services, vendor management, portfolio management, and more.
The rise in foreclosure starts presents both obstacles and opportunities. As we navigate this evolving landscape, services such as hubzu.com and Altisource Trustee Services are essential tools for managing these changes. Now is the time for stakeholders to prepare and react to the resurgence of foreclosure starts by leveraging outsourcing to mitigate risks, optimize processes, and seize opportunities with confidence.