Activity levels within field services firms continues to fall across the nation and companies functioning in the space need new ways to stay competitive.
Concentric Equity Partners and TDR Capital made the latest game-changing move, announcing plans to form a new holding company that will operate a suite of existing mortgage field services companies, including Mortgage Contracting Services, Asset Management Specialists and Vacant Property Specialists.
"It’s really the first time we’ve seen any significant contraction and merging along the lines of field services providers," explained Field Asset Services chief operating officer Paul Carlson.
He continued, "In my mind, it’s what companies are positioned to do to react to the changing industry. We look at it as the need to provide (services) from cradle to grave."
Business models continue to adjust in the housing recovery, pressuring servicers as fewer foreclosures move through the pipeline, causing a rapid decline in field service demand and other critical servicing-side functions.
"Six years ago, it was the post-REO world. How many foreclosures can you handle," Carlson stated. "Now we’re on the pre-foreclosure side and when we saw that shift coming, we started positioning ourselves to a technology landscape."
While it’s clear the real estate-owned properties business is slowly diminishing, the shadow inventory still exists, creating a potential stream of future business.
Servicing companies will need to be positioned at the front end to meet clients' needs, Carlson said.
The cyclical shift of the mortgage servicing industry has forced companies to properly understand the tools needed to manage their risks appropriately.
"We believe that’s the approach we need to take because all of these elements that are coming into the industry are at risk for our clients," the Field Asset Services COO noted.