The current REO market requires an expansion of services for business growth

Demand for existing homes — including REO assets — outpaces the available supply. Growing and changing is vital to expand your services and business growth so that you can tailor services in REO. Tiffany Fletcher, senior vice president of operations support and operational risk for VRM Mortgage Services, offers strategies for doing just that, showing how VRM is growing and changing during these unique times.

Tiffany Fletcher, VRM Mortgage Services

HW: What does the current market and demand for REO assets look like?

Tiffany Fletcher: Real Estate Owned (REO), acquired by lenders, banks, or financial institutions typically due to mortgage loan defaults, involves the strategic marketing and sale of existing properties to mitigate losses on outstanding loans. Balancing supply and demand is a delicate dance between new construction and existing properties. Factors like location and condition of the property and the market demand for REO and other existing home sales, impact the current landscape for REO assets.

Presently, the demand for existing homes outpaces the available supply, raising potential concerns for both sellers and buyers. Addressing this disparity requires a strategic combination of measures, such as mortgage rates dipping below 6% to encourage homeowners to list their properties, augmenting the inventory of homes for sale to achieve a more balanced five to six months supply (as recommended by the National Association of Realtors (NAR), noting the nation’s inventory was at a tight 3.2 months as of December 2023), and implementing measures to moderate home price appreciation, fostering increased affordability.

HW: What are the risk management challenges for REO assets?

TF: Effective risk management in REO asset sales involves awareness of the intrinsic risks. Notably, property risk calls for thorough inspection, preservation, and maintenance to limit liability. Legal and regulatory risk demands compliance with evolving laws and regulations, with VRM Mortgage Service’s legal and compliance departments ensuring current knowledge and implementing controls. Financial risk mitigation involves diligence, data analytics, and the expertise of VRM’s licensed real estate professionals, leveraging over 40 years of valuation data through its affiliate, PCV-Murcor.

HW: How can REO asset managers keep costs low and improve margins?

TF: To enhance cost-effectiveness and bolster profit margins in real estate sales, it’s crucial to promptly obtain and analyze precise property information. Employing targeted marketing strategies is equally vital to optimize exposure to potential buyers, minimize days on the market, and maximize the final sales price.

To achieve these goals VRM Mortgage Services employs licensed real estate professionals as asset managers and direct oversight of its vendor network. This network is a diverse vendor network that includes thousands of independent contractors and service providers with coverage of all 50 states and U.S. territories. Moreover, VRM Mortgage Services harnesses the power of its innovative, proprietary technology, seamlessly blending predictive modeling with AI capabilities. This dynamic integration not only drives operational efficiencies but also serves as a cornerstone in informed decision-making, ultimately leading to the maximization of returns.

HW: How is VRM Mortgage Services growing and changing to meet the current needs of REO asset stakeholders?

TF: VRM Mortgage Services (VRM) is an experienced residential and commercial real estate solutions provider, transcending conventional boundaries to deliver a spectrum of services beyond REO. We hold the unique distinction of being the sole outsourcer that has successfully listed, managed, marketed, and sold more than 700,000 properties, representing an impressive portfolio of over $50 billion in real estate transactions since our inception in 2006.  We take immense pride in our agile, industry-leading proprietary technology solutions and our scalable, seasoned resources. 

Distinguished by our exclusive program management and meticulous process improvement disciplines, we stand out as pioneers in precision and excellence. Moreover, our network boasts a comprehensive national panel of independent contractors meticulously selected to meet rigorous due-diligence standards. VRM goes beyond expectations, delivering tailor-made solutions that not only elevate efficiencies but also significantly cut operating costs, all while expertly mitigating risks for our valued clients.

To find out more, visit VRM Mortgage Services.

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