Navigating foreclosure costs in servicing valuation can be complicated when you have several moving parts and diverse models to optimize for your business.
Critically weighing the risks and costs of delinquencies requires careful diligence since there is opportunity for costly failures negatively affecting your bottom line.
We have created a series of articles, Servicing Insights Volumes 1-3, that will help to inform our readers of MSR servicing best practices and advice. In this blog, we will focus on “Foreclosure Costs in Servicing Valuation – Servicing Insights Vol. 1” which offers a panoramic view to confidently assess delinquency and foreclosure costs.
Servicing Insights and Strategies for Success
The series explains detailed aspects of servicing valuation & modeling for experienced mortgage bankers.
These strategies are defined by our industry veteran and author of the Servicing Insights series, Phil Laren. We are proud to make the insights of our servicing and modeling expert available through the Servicing Insights series. Phil Laren leads the MSR services group of MCT, and provides robust software, consulting, and valuation solutions.
We are dedicated to sharing seasoned insights and strategies for success with mortgage professionals everywhere.
Learn to Navigate Delinquencies and Foreclosure Costs in Servicing
In this volume, you will gain clarity for how industry experts determine how delinquencies and foreclosure will affect the value of servicing. Learn strategies for using loan-level severity precision to your advantage.
Servicing Insights Volume 1 outlines the types of loans where the servicer may be responsible for foreclosure losses. We will review how to address mixed gradients of severity to anticipate the losses for each group of assets. Exploring several topics related to mortgage servicing rights, we clarify variables such as severity, insurance payments, and buybacks.
Benefits of different servicing models are explained with supportive visual guides to illustrate each projected loss.
“What do delinquencies and foreclosure have to do with the value of servicing? Well, collection costs add to expenses, reducing the revenue stream from servicing. If the delinquency progresses further into foreclosure, there are further processing costs, such as loss mitigation and legal prep costs.” – Excerpt from Servicing Insights Vol. 1
About The Author – Phil Laren
Phil Laren has 29 years experience in all aspects of servicing, modeling, pricing, trading, negotiating, hedging, risk analysis, accounting analysis and operations.
He created MSRlive!, our newly launched mortgage servicing software, based on the same Desktop Servicing Model that has helped countless Mortgage Banking professionals make the right decisions in their servicing valuations.
Read Servicing Insights Vol. 1: Foreclosure Costs in Servicing Valuation
We hope that this series of Servicing Insights will give you the assurance as a professional to weigh your risks and inform your judgments for each group of assets within your MSR services.
By utilizing these valuable and practical insights, you can look forward to a measurable difference in the certainty of your servicing decisions that will impact your bottom line directly. Download, read, and learn more from our experts.
Let us know what you think in the comments!