Market Analysis: Being Automated Does Pay Off

*Being Automated Does Pay Off*
**By Tony Garritano**

***Who says technology doesn’t pay off? Well, it does. Just take servicing for example. It’s a tough space, but for those that automate, they’re doing well. To this point, Wingspan Portfolio Advisors, a Dallas-based diversified servicing company, is leveraging technology and servicing know-how to track ahead of the industry averages in speeding short sales to successful conclusions. The secret to accelerating the short sale process is in keeping the objectives of all parties aligned and the communications clear, finds Robert Shiller, senior vice president of Wingspan’s Enhanced Servicing Solutions, the company’s unit focusing on foreclosure alternatives. While the industry as a whole still takes up to six months to complete a short sale, Wingspan’s average is four to six weeks. Here’s how they do it:

****Even with recent improvements, only 30% of short sales tend to complete nationally, according to some published estimates, while Wingspan is experiencing an 80% success rate. Starting this June, loans held or insured by government-sponsored enterprises must receive responses to offers within 30 days, but this does not ensure improvements in success rates.

****Wingspan Portfolio Advisors speeds up short sales for servicers, real estate professionals and attorneys. It uses its short sale acceleration program for its component and special servicing clients, and offers it for real estate professionals through the Wingspan Real Estate Network (WREN). Attorney-involved short sales benefit through American Home Remedy, a partnership Wingspan recently announced with Jacksonville, Florida-based Realty Legal Service and Home Counsel Group.

****Working closely with primary servicers struggling to handle large volumes of loans on the brink of foreclosure, Wingspan presents short sale offers that have been pre-screened for errors and other issues that traditionally stall the process. Wingspan specialists present offers to servicers, work out junior lien problems and keep track of all required processes using Wingspan’s technology platform. The Web-based platform is used by servicers, investors, mortgage insurers and other stakeholders to understand what is required of them and stay updated on each short sale’s progress via online dashboards.

****“The technology is a great advantage as it keeps everyone on the same page and on track,” says Shiller. “Paper files sitting on desks waiting for decisions largely disappear, replaced with paperless offers that we have vetted, made error-free, and that fall within the economic realities that servicers have shared with us. At the same time, we are able to screen for fraud, get accurate values and condition reports, and eliminate the usual delays.” As a result, the Wingspan short sale can take up to 70 percent less time to complete.

****Ed Delgado, chief operating officer of Wingspan Portfolio Advisors, believes with short sale volumes on the increase, speed to decision and execution are becoming increasingly vital to any successful liquidation strategy. “Real estate agents and brokers have motivated buyers looking for good deals on homes, many of them first-timers. The more we can ease their path to ownership while providing a foreclosure alternative for distressed borrowers, the fewer the neighborhoods that will suffer from extended vacancies and blight,” he says. “At the same time, distressed borrowers are able to reenter the ranks of homeowners much sooner than if foreclosure devastates their credit, and this potentially means millions more home sales over the next three to five years. Short sales benefit everyone, including servicers and investors, with reduced loss severity.”

****Lenders and investors improve sales amounts by 24% using short sales, according to a recent study by McGeough Lamacchia Realty of compiled MLS data for short sale and lender owned (foreclosure) homes sold in 2010 and 2011 in five major markets around the country.

****“We’re demonstrating that short sales can be much faster and far more successful than in times past,” says Shiller. “It is a viable strategy that gets the market moving, finds good borrowers for the existing inventory out there, and minimizes the collateral damage of foreclosure.”