LERETA, a national real estate tax and flood service provider, has launched its Additional Parcel Search Solution, a proprietary new solution that materially improves identification of additional parcels at the initiation of tax service. This solution reduces portfolio risk associated with penalties and interest and potential loss at tax sale.
One of the biggest challenges in tax service has been identifying additional parcels associated with an address without going through the expense of using a legal description on every loan. Missing parcels when a property is set-up for tax service exposes the servicer to both potential losses from penalties, interest and lost properties as well as borrower dissatisfaction. Despite the importance of identifying additional parcels, the industry has relied on the same tools and methodologies for decades.
“Over the past 30 years, mortgage servicers have had to rely on virtually the same tax service solutions without significant enhancement or product innovation,” said John Walsh, CEO of LERETA. “LERETA has been aggressively working on methods to reinvent tax service technology and processes. Additional Parcel Search Solution is just one initiative in that agenda, and it’s an important solution that can reduce servicers’ financial risk and increase borrower satisfaction.”
LERETA recently ran a test for a top five servicer that included a subset of approximately 16,000 loans that had been parceled by another tax service vendor. LERETA’s Additional Parcel Search Solution found 11 properties that had previously been unidentified. Although 11 loans is only 0.1 percent of 16,000, it does represent $2.4 million of potential losses or 10 basis points of MSR value.
“We understand the importance of identifying these parcels and the difficulties created from the inability to discover them,” Walsh explained. “This is an area in the tax service landscape that needed an injection of innovation, and we are proud to provide a solution that can bolster tax service and provide servicers materially better solutions.”