Leaders from across the industry will delve into some of the most pressing topics related to Federal Housing Administration (FHA) properties, including best practices, vendor selection, oversight, and more.
Participating in this webinar are the following industry leaders:
– Cheryl Merchant, Freedom Mortgage
– Ryan McDoulett, ISN Corp.
– Jim Vaca, Altisource
– Toby White, Flagstar Bank
Vaca points out that 19% of all new loans are FHA insured and that the agency is looking to change the servicing standard to get large banks to increase the market share of FHA from 15%. That mark was previously 50%.
Additionally, default rates among FHA loans are two-to-four times the rate of other investors.
According to a survey by Auction.com, 80% of servicing professionals polled—an increase from the 72% polled last year—expect their FHA loan portfolio to increase over the next two years and 85% expect that increase to be more than 25%.
Vaca added that vendor performance is becoming “increasingly challenging” as portfolios shift to rural areas and vendor pools for distressed loans and properties continue to diminish current economic gains.
Additionally, 47% of property preservation expenses are losses—an average of $4,100 per property. The average conveyance timelines is 12-times the FHA requirement.
Other concerns include a higher rate of FHA defaults in distressed markets such as rural areas and labor supply constraints.
Marchant added that HUD requires the servicer to be responsible for the oversight of the performance of property maintenance to ensure the condition and appearance of the property maintained and the property is “conveyable” after the foreclosure sale.
Items that cause a delay in pre-sale and post-sale conditions are code violations and damaged properties.
She adds that communication is key when it comes to code violations, but it could be difficult to remediate most issues pre-sale.