HousingWire sat down with John Vella, chief revenue officer of Altisource, to discuss the benefits servicers receive from Altisource’s FHA Default Program.
Q. What difficulties do servicers face when it comes to FHA loans?
A. The complexity of servicing FHA loans and the FHA conveyance process results in potential delays, costs and losses for servicers. Servicing FHA loans require tight controls and monitoring of timelines for foreclosure, property preservation, title curative, evictions and the conveyance process.
Q. How does Altisource’s FHA Default Program solve for these issues?
A. Having a single vendor that can facilitate all of these processes for the servicer allows for a smoother transition in and out of each process as needed, resulting in reduced timelines and costs. In addition, this allows the servicer to have full transparency into the process from a single source to identify pain points and bottlenecks in the process that can be quickly addressed by both the servicer and vendor before losses become detrimental.
Q. According to a recent survey by Altisource, 72% of servicers said they expect to see an increase in their FHA loan portfolio over the next 12-24 months. How will the FHA Default Platform prepare servicers to handle this level of growth?
A. The default strategy tool will allow servicers to project future losses on all possible outcomes as FHA loans progress throughout the default process and ultimately end in foreclosure. Disposing of the asset at auction through Hubzu auction platform avoids many of the delays. Secondarily, having an integrated field services preservation provider provides for tighter execution.
Q. How does the FHA Default Platform help servicers mitigate the costs of servicing FHA loans?
A. Due to complications and possible delays that occur during the foreclosure process, having the ability to project losses and curtailments allows the servicer the agility to pivot strategies early in default process to minimize, or even eliminate, those losses in advance of them actually occurring.
Q. Can you walk us through how the FHA Default Platform works at each step of the CWCOT asset disposition process?
A. Altisource services and model technology are tightly coupled from as early as 60 days prior to foreclosure. It begins with inspections and rapidly proceeds to pre marketing auction sales and repairs as needed. Title and valuation are running in concert for seamless execution. Finally, the financial projection model is continuously updated to confirm accuracy and pivot quickly and optimize the savings to the servicer.
Q. What responses is Altisource receiving from servicers?
A. All servicers we have spoken to are focused on mitigating the losses associated with delinquent FHA loans, with most servicers using internal data in order to gain some insight into the FHA process. The ability to utilize data to forecast losses, create agile disposition strategies and align the efforts of multiple disparate vendors is a hot topic in nearly every servicing shop. As we listen to client issues we continue to improve the FHA Default Platform to bring a best in class solution to our clients.