True Stories: Hybrid, eNote and RON Implementation

Join expert panelists that will discuss the status of federal legislation, trends in digital adoption and how best to prepare your organization for the next generation of lending processes.

Spruce’s Patrick Burns on innovation in title technology

In the season finale of Housing News season 5, Spruce CEO discusses heightened investor interest in title tech, innovation and fintech adoption.

Top CFPB official “hates” QM rules, jeopardizing safe harbor

A top CFPB official in charge of the rule-making process has heavily criticized the agency's own qualifying mortgage rule, jeopardizing safe harbor.

Fraud risk factors at closing increased almost 90% last quarter

A variety of risk factors could be contributing to the drastic increase in wire and title fraud risk factors in mortgage and real estate closings – for example, compliance issues and an increase in transaction data errors.

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Hot Seat: Ted Manley of Manley Deas Kochalski

With low foreclosure volume, now is the perfect time for servicers to optimize their processes

Declining foreclosure volume has created a “new normal” in default levels, but servicers can’t get complacent. Ted Manley, co-founder and principal at Manley Deas Kochalski, explains why now is the perfect time to optimize processes with talent and technology to prepare for the inevitable volume increase.  

HousingWire: What are some of the pressing issues facing servicers right now from a regulatory standpoint?

Ted Manley: Interestingly, the most pressing issues aren’t regulatory in nature. Instead, they relate to foreclosure volume now and later. The key issue is how servicers are going to adapt to “the new normal” created by declining volume. We all know that the default rate remains at a pre-crisis level. The data indicates – and experts say – that foreclosures won’t adjust upward from current levels for approximately 12 to 18 months.

However, FHA delinquencies are trending higher than expected, while modified mortgages are experiencing higher failure levels. It’s hard to predict the impact these two factors will have on the forecast, but we need to remain prepared for volume to increase. Managing a low-volume business while staying flexible and prepared for the inevitable increase is one of the most pressing challenges right now.

HW: How are you seeing companies adapt to these challenges?

TM: Many organizations are using this time to create even leaner and more effective processes to ensure procedures are optimized. This advance work will make sure they can handle future volume expeditiously within the highly regulated default landscape.

On our side of the business, in addition to optimizing our processes, we’re offering a wider range of services to existing clients and using our expanded offerings to attract additional clients. For example, two relatively new areas we’ve embarked upon with great success are timeshare mortgage defaults and a nationwide bankruptcy practice. Implementing this strategy while foreclosure levels are manageable allows us to provide even greater support to our long-time clients while expanding our client base.

We couldn’t do that, of course, without maintaining our ability to attract top talent and exceed client expectations, so both remain priorities. In addition, we continue to innovate, automate, and streamline our processes to provide the best client service in the industry.

HW: Law firms aren’t always associated with tech innovation, but MDK seems to be the exception. How does your proprietary technology distinguish your firm?

TM: Great question. Our clients regard MDK as one of the most sophisticated law firms in the industry. As the environment changes, we continue to improve our proprietary system, Casee. For example, we’ve added flexibility and additional customization features to ensure we can quickly adapt to industry challenges and at a significant scale.

We are developing systems that allow us to launch new lines of business and services. As we research, experiment, and analyze technology in new-to-us service areas, we share these efficiencies and improvements with our core clients in the residential mortgage industry.

One example is the auction management system we built to support the private-selling officer option created by Ohio’s foreclosure reform bill. This platform’s back-end workflow capabilities stand to provide additional value in default servicing beyond its original design.

HW: Looking forward, what should servicers keep an eye on for the second part of the year?

TM: We strongly encourage our clients and colleagues to embrace the new normal while preparing for a foreclosure volume increase in the not-too-distant future. Rather than merely accepting and managing current levels, look for ways to streamline and optimize processes with both talent and technology. It’s the best way to prepare for change, and change is a constant for all of us.

*This article has been updated with correct information on Ted Manley and Manley Deas Kochalski LLC

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