By Joel Davidson, AMP, SVP, ServiceLink
With delinquencies on the rise to close out 2023, default volume is constantly fluctuating and unpredictable. Should economic challenges continue in 2024, mortgage servicers can expect increasing default momentum. Navigating this growing volume can be tricky as it would involve realigning internal resources (both human and financial) and following a temporary shift to forbearance-related issues, to once again focus on properties in various stages of default. But servicers need to look beyond their own walls as well. Having a valuation partner that is well-versed in the default process with many offerings can be pivotal to servicer success. The following are three criteria to help you see how valuable an ideal default valuation partner is:
1. Servicing valuation expertise
Servicers know all too well how challenging it can be to get accurate valuations for properties in various stages of default. Because of this, ServiceLink formed a dedicated servicing valuation division that specializes in the needs and nuances of default so servicers can have complete confidence in the valuations they receive. This team allows you to focus on the property’s true condition with as accurate a valuation as possible. Their expertise helps you navigate changes in the property since its last assessment – including neglect and disrepair – by providing real-time information.
Our appraisers, for example, are not only licensed, vetted, graded and insured, but also experienced in inspecting delinquent properties. They often see the results of neglect or outright devastation — circumstances that will require repairs and cleanup to get the property back to its normal condition. This experience, along with specialized training, makes them more adept in estimating as-is and as-repaired values than appraisers who work primarily in the first mortgage space. Similarly, the brokers we work with through our servicing valuation division are experienced in default property inspections and pricing, so whether they are formulating their own price opinions or working hand-in-hand with our appraisers, they are bringing additional default expertise to the process. Our support team members are specially trained in servicing valuation as well, and they hone their expertise through their daily work with our servicer clients. These specialists spend all day, every day, working through default-related issues and requests, so they can not only understand but also anticipate servicers’ challenges and concerns.
2. A full suite of valuation offerings
There are many different moving parts in this process, and your valuation partner should be able to provide you solutions through every step. Your partner should provide transparent information about your loan-to-value ratio and recovery value at any point in time. ServiceLink’s servicing valuation team ensures that you get precisely what you need, precisely when you need it. You can assess how quickly you need to take action — and what action you need to take — to mitigate losses and comply with state, federal and investor-regulated timelines.
As a loan servicer, you may need a property valuation at any stage in the default process. Early on, while a loan is still performing, an automated valuation model (AVM), desktop valuation asset review, broker price opinion (BPO) or desktop valuation with inspection (DVI) may be ideal, as they can be turned around relatively quickly. As delinquency continues, however, more depth and insight are typically required, through a full traditional appraisal. Finally, as the asset approaches REO status, an REO appraisal, including an REO addendum with both as-is and as-repaired values are likely to be required. Backed by industry-leading expertise, technology, processes and analytics, as well as stringent quality control, ServiceLink servicing valuation offers:
BPOs – Provided by highly experienced real estate brokers familiar with the areas where subject properties are located, BPOs can serve as corroborating or stand-alone values. Rules and logic are customizable, based on your needs, and opinions can include both as-is and as-repaired values. BPOs are also frequently done in bulk transactions for accounting refresh, or pre and post-acquisition due diligence. Our BPOs provide you an opinion that includes both a quick-sale price and an as-is suggested list price, along with photos of the subject property and comparable properties.
Traditional and REO appraisals – ServiceLink’s dedicated servicing valuation appraiser panel conducts traditional appraisals aligned with your unique processes, rules and requirements, with access to a nationwide network of appraisers with deep experience in conducting traditional appraisals. These can include as-is and as-repaired values set to client marketing time direction.
Property Condition Reports (PCRs) – Interior and exterior PCRs address your specific concerns as well as provide a detailed assessment of the subject property condition and ample subject photos, as well as the impact of neighborhood characteristics and nearby structures. These reports serve as a useful tool to ensure you have a clear view of the condition of each property in your portfolio.
Desktop valuations and other alternative valuations – The desktop valuation with inspection (DVI) and desktop valuation with interior inspection (DVI-I) are often used by servicers to value properties in early phases of delinquency. ServiceLink offers a variety of alternative servicing valuation solutions that can be faster than traditional appraisers or even BPOs. These offerings include sending a local real estate broker to inspect the property, complete a property condition report (PCR) and take pictures of the property; then an employee appraiser valuing the property, leaning heavily on the broker’s inspection report and photos, MLS, online public records and ServiceLink’s proprietary database information. Alternatives to the DVI include the desktop valuation (DV), tie-out reconciliation and desktop review. Additionally, every ServiceLink valuation report for default and servicing is reviewed by experienced default-specific real estate professionals after the report has been reviewed by our proprietary advanced algorithms including industry best practices and client specifications.
3. National coverage through a single provider
When you’re making decisions about how to manage default properties in your portfolio, it’s important you have valuation solutions you can rely on time after time, across your entire footprint. ServiceLink’s servicing valuation division provides consistent, high-quality coverage across all 50 states, making us a solution for your full portfolio. We can save you time, money and the hassles associated with working with multiple partners, while delivering a level of customer care that is unmatched in the industry.
ServiceLink ensures that our processes and analytics exceed industry standards at every turn, and that our vetted, dedicated appraisal panel, our in-house employee desk appraisers, our real estate broker network and our quality control and client service teams know all the ins and outs of servicing and default valuations to give you a real advantage.
Given the current economic climate, we might expect to see continuing momentum in delinquency and foreclosure volume through 2024. Equipping yourself now to manage growing volume is smart; there’s no better time to check out ServiceLink’s servicing valuation offerings.
Visit https://www.svclnk.com/servicers/servicing-valuations/ to learn more about ServiceLink’s serving valuation solutions.
