In the February 2015 Mortgage Industry Outlook Report released last month by the Collingwood Group and the Five Star Institute, 39 percent of survey respondents who service Federal Housing Administration (FHA) mortgages said that the biggest challenge in servicing those loans was fulfilling the Agency's property preservation requirements.
Property preservation provider Mortgage Contracting Services (MCS) said the challenges in servicing FHA loans are real, but not insurmountable.
"Not only does our management team include some of the most experienced servicing professionals in the country, but our knowledge base regarding FHA compliance and conveyance is the best in the industry," MCS CEO Caroline Reaves said. "We have staff dedicated to ensuring that our field service professionals have the most up-to-date information available on FHA requirements. We also provide rigorous training for those professionals who maintain FHA properties. In short, we are committed to being the solution to the industry’s worries about FHA property preservation and conveyance."
Loans insured by FHA differ from those insured by Fannie Mae and Freddie Mac. Unlike those loans serviced in the GSE servicing space, where a property is conveyed to the GSEs immediately after foreclosure, with FHA loans there is often a waiting period between foreclosure and conveying a property to FHA. During that waiting period, which can vary depending on the situation, the servicer is often responsible for everything from basic property preservation (such as installing locks or mowing the lawn) to more complicated issues (such as eviction, code-mandated repairs, or complicated title issues).
The additional resources a servicer must dedicate to property preservation when handling FHA loans are potentially costly, in addition to creating more opportunities for non-compliance with the FHA's servicing program rules.
Nevertheless, MCS is prepared to take on the property preservation challenges put forth by the conveyance waiting period.
"Our clients rely on MCS to be their eyes and ears in the community," Reaves says. "We are fully committed to providing the highest-quality property preservation services and ensuring that the conveyance process goes smoothly."
Founded in 1986, MCS is a nationwide provider of property preservation, inspections, REO property maintenance, and valuations to the financial services industry, The company has offices in Plano, Texas; Ruston, Louisiana; and Tampa, Florida.