Gordon Jardin, CEO of Franklin Credit Management recently stopped by HousingWire's offices.
Here is a partial transcript of that conversation:
HW: How has Franklin Credit reinvented itself?
Gordon: "Franklin hasn't as much reinvented itself as it has returned to its roots. Our expertise for over 20 years has been in valuing and servicing mortgage loans of distressed borrowers. It is here where we will focus and add value. Sub servicing requires collection and recovery activities and reporting that are unique for each client. Current market conditions have dictated an increased emphasis on loss mitigation, skip tracing, bankruptcy and home retention initiatives.
This is what we do and do well.
We are also adding value by introducing new initiatives where and when necessary. One example is our face-to-face home solutions division, a nationwide service which will seek to talk directly to borrowers at their residencies when it has become impossible to reach them via phone or mail.
"While our infrastructure and operational procedures were already in place, marketing these services to third parties has presented some challenges due to the balance sheet dominated by mortgage assets we had purchased prior in a different economic environment. Now that we have walled off our servicing and services operation, clients can again feel comfortable with our financial picture.
"We also offer due diligence and forensic underwriting services to review seasoned loan products. We reconstruct borrower profiles from information provided at origination, pay history, servicing collector comments, current credit reports and current values of collateral securing the loans, supplemented by various Internet and third-party vendor search providers to determine the prospects for future payments and recovery expectations. Our clients are potential purchasers and current holders of loans as well as holders who want forensic reviews for fraud and underwriting and broker misrepresentation purposes."
HW: So, what's different about the firm now as compared to pre-credit crisis?
Gordon: "Franklin Credit Management no longer has mortgage assets on its balance sheet. We are a premier third-party servicer and service provider for companies that own or are looking to purchase or sell distressed or discounted mortgage loans and REO.
"It is possible that Franklin will participate in a joint venture created to purchase mortgage assets given the right circumstances and partners. What we bring to such a partnership is the ability to assess risk in a mortgage portfolio and design and implement servicing strategies to maximize returns for investors. We believe an independent portfolio review is valuable to each investor, seller or holder. Our independence means we can give an honest assessment, whether good or bad."
HW: One of your methods for management involves physically traveling to distressed properties for intel. What other methods do you employ that make you stand out in the current market?
Gordon: "Good question. I think each servicer has to challenge every technique they use because this market is so different from even a couple years ago. We tested our face-to-face concept for over a year once it became apparent that borrowers were becoming very reluctant to answer their phones. We want to help our borrowers remain in their homes, or when that is not possible, we want to give them a financial head start and a financial cushion as they move to a new residence. We will not stop looking for new ways to assist our borrowers."
HW: What advice would you have for firms looking to weather the storm?
Gordon: "My advice would be to figure out what your firm does well, where you add value, and focus on that area of your operation. Too often businesses try to do all things even though they know they are weak in some areas, rather than use partner companies who have core competencies in those areas."