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Surviving and Thriving in a Low-Foreclosure REO Environment

EJ Kite Auction REOE.J. Kite is VPClient Performance Management at Auction.com. He has more than 20 years' worth of information management experience with an emphasis on the ability to understand complex information challenges, providing solutions that ensure leadership has access to the right information to make informed decisions. Kite recently spoke with DS News about how the REO space has evolved in a low-foreclosure environment, and how the industry should prepare for any future turns of the economy.

DS // What are some of the trends and challenges you're having to deal with right now, or that you're anticipating on the horizon?

The volume of foreclosure assets has been steadily declining in recent years. The GSEs, for example, are disposing of their REO assets at a higher rate than they are acquiring them, so their inventory is constantly shrinking to low levels. Given that our economy is fluid and has periods of peaks and troughs, we want our clients to relish in these times of prosperity, but also prepare for times of recession. It’s hard to say when the economy could take a turn for better or worse, but we work to ensure our clients are ready for either and have a trusted partner to lead them in the right direction.  

Even though there are fewer foreclosed assets on the market, Auction.com continues to grow in market share and is helping facilitate more sales for our clients earlier in the process. What's unique about our marketplace is that we help our clients understand that there's a big difference if you can dispose of an asset in foreclosure, as opposed to going through the process of eviction and having to deal with the principal and interest charges, HOA, and everything else as that occurs when a property goes into REO.

DS // Are there any other ways you've had to adapt as the market has changed over the years?

As an organization that has weathered both the best and most challenging economic times, we’re proud that we’re able to leverage our insight to educate our buyers and sellers on not only how to buy and sell property, but how to adapt with changing times.

Newer and existing clients alike want to know how to maximize their strategies during the best of times. Likewise, in challenging times, we work to ensure our clients know their options and make the best of a difficult situation.

DS // Are there any technological developments you are working with that you're excited about?

Our organization recently began conducting a massive enhancement and expansion of our technological infrastructure. These new solutions and expanded capabilities will enable me and my team to pull the necessary information we need for our clients much faster. Likewise, our clients, especially our servicer clients, will gain an even greater level of transparency into their asset and portfolio performance on a dynamic, daily basis.

Additionally, we’re developing new ways to ensure an asset is priced properly by leveraging distressed auction historical performance and industry trends relative to the specific market.

DS // What is something you wish more people understood about your job?

We’ve become a disrupter in the distressed asset space. Our platform is home to assets that range from the ultra-affordable to homes well over $500,000 and multi-million dollar estates. As we better inform the buyer community of our offerings, they are coming to us ready to bid and, in turn, demonstrating to our clients, or sellers, why they should sell assets on our platform. This seamless interaction not only drives our day-to-day activity but is also a driving force in our technology enhancement initiative. Changing the way distressed assets are bought and sold is not only a game-changer for us, but also for the industry as a whole.

About Author: David Wharton

David Wharton, Editor-in-Chief at the Five Star Institute, is a graduate of the University of Texas at Arlington, where he received his B.A. in English and minored in Journalism. Wharton has over 17 years' experience in journalism and previously worked at Thomson Reuters, a multinational mass media and information firm, as Associate Content Editor, focusing on producing media content related to tax and accounting principles and government rules and regulations for accounting professionals. Wharton has an extensive and diversified portfolio of freelance material, with published contributions in both online and print media publications. Wharton and his family currently reside in Arlington, Texas. He can be reached at David.Wharton@thefivestar.com.

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