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Exploring Alternatives to Foreclosure

Editor's note: This sponsored content appears in the June 2021 edition of DS News [1] magazine, available here. 

The global pandemic and resulting economic fallout have thrown the mortgage industry into unchartered territory. On one hand, low interest rates and high demand have catapulted housing prices in many markets. On the other, many Americans continue to navigate their way through the financial hardships COVID-19 brought on their families. Many homeowners are still not seeing their incomes restored and are finding it difficult to pay or maintain their mortgages. In fact, roughly 2.1 million homeowners in the U.S. are currently enrolled in forbearance and are at risk of foreclosure.

A priority goal of the mortgage industry should be to keep families in their homes—but realistically, there will be many homeowners who will be unable to keep their property. Once the foreclosure process starts, homeowners have few options. By taking proactive action with borrowers before they default, servicers allow homeowners to explore options on transitioning to a new beginning, leveraging Xome’s internal and external resources.

Once foreclosure moratoriums are lifted, servicers will find themselves faced with balancing credit loss while helping borrowers retain equity and assisting them with a dignified exit. As we learned from the 2008 housing crisis, a backlog in loss mitigation pipelines that coincides with high foreclosure rates can be extremely disruptive to the industry.

Without a doubt, foreclosure should be avoided at all costs—it’s best for the borrower, the servicer, and the communities hit hardest by this crisis by limiting the volume of bankowned properties that negatively impact home values. When it gets to the point when borrowers are unable to make payments, servicers can explore platforms like the Xome® Xpert Seller program. The Xpert Seller program compliments the servicers existing loss mitigation process, while creating additional capacity and resources for the servicer with Xome managing the listing and sales transaction process directly with the real estate professional and the homeowner. The program connects borrowers with real estate agents from Xome’s national agent network and guides them step-by-step through the process of selling their homes before they reach foreclosure.


With recent extensions around forbearance and foreclosure protections, impacted individuals have a little more time to explore their options.

The administration has extended forbearance and foreclosure protections for homeowners with federally guaranteed mortgages currently through June 30, 2021—giving individuals that have been impacted time to explore their options. Unfortunately, not everyone will be able to get through the crisis unaffected. An increase in defaults related to the global pandemic will eventually arrive.

Servicers have an obligation to help homeowners explore all their options fully while reducing neighborhood blight and assisting in stabilizing home values. Mortgage servicers need to be proactive in their approach and start connecting with their customers who are at risk with options like Xome’s Xpert Seller program. When servicers make the decision to engage with a provider that can manage their assets across all stages, they position themselves to successfully manage the work by creating additional capacity. As an industry, we can navigate through these challenging times together while keeping homeowner interests at heart.