Servicers, Homebuyers Benefit from a Full-Service Auction Partner
As serious mortgage delinquencies improved from April to May 2022 by 7%, they are still up by 45%, pre-pandemic, and over 19,000 new foreclosures were recorded in May.¹
With the return of foreclosures after federal moratoria comes a more focused, holistic and transparent approach to auctions. With the help of tech-enabled auction companies and new HUD guidelines² which highlight that CWCOT properties that didn’t sell in foreclosure are to be marketed to owner occupants, HUD-approved nonprofits and government entities exclusively for 30 days – a more transparent 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 2022 State of Homebuying Report, 11% of the respondents have bought at auction and another 33% would consider doing so. Of those respondents’ reasons given for considering auction, their main drivers are cost savings and a faster homebuying process. The Gen Z and Millennial population is the most willing to buy at auction – followed closely by Gen X. This is telling of a trend that is taking on momentum.
For servicers, as a result of this growing audience of first-time buyers focused on auction sales, having a full-service, integrated and connected auction partner with an array of different solutions is critical to keep the experience as fast and effortless as possible.
When a property goes into default, ServiceLink’s nationwide asset marketing and auction services, along with best-in-class portfolio analytics, move auction assets quickly from foreclosure through 2nd Chance or REO into streamlined closing. Offering third-party sale and CWCOT 2nd Chance auctions, the ServiceLink auction process helps to escalate loans that may take longer to convey due to damages, but still eligible for 2nd Chance.
“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.”
Utilizing the full suite of ServiceLink’s comprehensive default services, properties are followed and managed through pre-foreclosure, title and close, field services, valuations, auction, asset management, along with servicer and attorney reporting and support, all powered by ServiceLink’s EXOS One Marketplace® technology to bring time, risk and cost savings to servicers and investors.
“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 of 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.
Providing technology-driven solutions that bring comprehensive and holistic service paired with expertise in FHA and HUD requirements positions ServiceLink as a viable and prepared partner in leading the industry through this unusual time in history.
1 U.S. Records 19k Foreclosure Starts in May https://dsnews.com/daily-dose/06-24-2022/u-s-records-19k June 24, 2022
2 FEDERAL HOUSING ADMINISTRATION TAKES ADDITIONAL STEPS TO EXPAND AFFORDABLE HOUSING SUPPLY THROUGH FHA’S CLAIMS WITHOUT CONVEYANCE OF TITLE https://www.hud.gov/press/press_releases_media_advisories/hud_no_22_086 May 5, 2022