Servicers, Homebuyers Benefit from a Full-Service Auction Partner
While national mortgage delinquency rates fell 3.1% from April to May 2023, foreclosure activities began on about 5% of serious delinquencies, up from the previous month. The need for more focused, holistic, and transparent approach to auctions has grown. With the help of tech-enabled auction companies and HUD guidelines², released in May 2022, which highlighted that CWCOT properties that didn’t sell in foreclosure were to be marketed to owner occupants, HUD-approved nonprofits, and government entities exclusively for 30 days – a clearer process is created, one that is more open to independent buyers. This gives them the opportunity to purchase before properties can be marketed and sold to investors.
According to the ServiceLink 2023 State of Homebuying Report, 40% of respondents would consider buying at auction. Of those respondents’ reasons given for considering auction, their main drivers are cost savings and a faster homebuying process. Gen X was the most willing to buy, followed closely by Gen Z, and Millennials. Research also shows that 50% of participants’ potential use for a home purchased during auction is for a primary residence, but 23% considering buying at auction don’t know enough about the process, suggesting that by providing additional information, the pool of buyers could expand even more. This is telling of a trend that is taking on momentum.
Since the market of first-time buyers focused on auction sales could be increasing, it is important to have the right full-service, integrated, and connected auction partner. ServiceLink has an array of different solutions and keeps the experience fast and effortless.
Why a holistic partner matters
When a property goes into default, ServiceLink’s nationwide asset marketing and auction services, along with best-in-class portfolio analytics, provide fast and efficient benefits. Offering third-party sale and CWCOT 2nd Chance auctions, the ServiceLink Auction process is transparent and maximizes efficiency while reducing costs. It also helps to escalate loans that may take longer to convey due to damages, but still eligible for 2nd Chance. Due to this knowledge and experience, ServiceLink can be a strong partner for all foreclosure and short sale needs.
“It goes beyond just the auction for us,” says Eva Tapia, Senior Vice President, ServiceLink Auction. “We’re focused on comprehensive solutions with an end goal of effectively and efficiently mitigating issues – and doing what we can through ServiceLink’s Seller Assisted Sales program so servicers can let their borrowers know there’s equity in their properties to avoid foreclosure first. It benefits them because if there is equity in those properties, the borrowers get the benefit of that equity once the debt has been fully satisfied.”
Offering best-in-class services, ServiceLink’s technology brings time, risk, and cost savings to servicers and investors. ServiceLink’s comprehensive default services are followed and managed through pre-foreclosure, title and close, field services, valuations, auction, and asset management, along with servicer and attorney reporting and support.
“Title issues are very unique on auction properties,” says Amy Daniel, Senior Vice President, Title & Close for ServiceLink. “Our process ties title and close into our auction team on a daily basis. We know what to look for and how to clear and give buyers a top-notch experience. The fact that we have repeat business from buyers is the ultimate compliment. We provide a white glove service that we’re very proud of.”
A one-stop shop with all the solutions servicers and investors need saves them from having to work with and leverage multiple vendors. “We have all these different pieces under one leadership team, under one umbrella here at ServiceLink,” says Daniel.
“In most cases, we've also done the pre-foreclosure title. And from the point of inspection, which is required for a defaulted property to a valuation needed to determine the price point of the property, all of that is within our wheelhouse,” adds Tapia.
Synchronous maintenance and property preservation services along with title and auction expedite timing and reduce risk. The ServiceLink property preservation team can also help to identify severely aged, high-risk FHA files to bring forward the best course for disposition, and ServiceLink Auction utilizes a “dual path” model for both sale and conveyance paths on those eligible properties, offering support through both options and moving forward for whichever one is quicker for the servicer.
As foreclosures start to tick up, a ready and reliable provider with technology-driven, comprehensive and holistic services paired with expertise in FHA and HUD requirements positions ServiceLink as a viable and prepared partner.
Federal Housing Administration takes additional steps to expand affordable housing supply through FHA’s claims without conveyance of title. HUD.gov / U.S. Department of Housing and Urban Development (HUD). (2022, May 5). https://www.hud.gov/press/press_releases_media_advisories/hud_no_22_086