Program Connects Property Managers with Mortgagors
A new program aims to connect lenders, servicers and investors with independent property managers to handle tenant-related issues on recently foreclosed properties. The National Residential Property Receivership Program is a partnership between Carrollton, Texas-based specialty servicer Wingspan Portfolio Advisors and the American Legal and Financial Network (AFN), a network of mortgage banking and legal professionals. The program was created in response to the Protecting Tenants at Foreclosure Act (PFTA), which was signed into law in May and requires lenders who repossess properties to maintain a tenant’s lease until its expiration and affords tenants of foreclosed homes without leases 90 days to vacate a property. “When borrowers own property, they are required by the lender to make payments and maintain insurance to safeguard the home,” said William LeRoy, AFN president and CEO. “Under the new legislation, when lenders take the property back, many new responsibilities shift to them. They include duties to tenants, who are often the previous owners, and to local municipalities, which impose penalties if the real estate is not properly maintained.” The problem, LeRoy said, is that lenders, investors and servicers aren’t equipped to handle the demands of being a landlord. In some cases, courts will appoint receivers to handle the property management for a lender who forecloses on a borrower. The program provides personnel from Wingspan’s residential receivership department, property managers that specialize in tenant housing, and lawyers from AFN, to work on behalf of the lender, servicer or investor. “Receivers stand in the shoes of the lender and administer the needs of the property,” said Wingspan CEO Steven Horne. “They are often the best option for lenders when faced with the challenges of servicing tenant-occupied properties, impaired or abandoned houses, or properties with unfinished construction.” Write to Austin Kilgore.