Home / News / Foreclosure / Selene’s Larry Litton on the Rise of Smaller Special Servicing Shops
Print This Post Print This Post

Selene’s Larry Litton on the Rise of Smaller Special Servicing Shops

The default servicing industry is in a state of transition, according to Larry B. Litton Jr., CEO of ""Selene Finance"":http://www.selenefinance.com, and it's the smaller, more nimble servicing operations that will have the advantage in reacting quickly to the new rules and the changes that are in store.


""We don't have a big legacy portfolio which would create challenges for someone trying to implement…new things to deal with the changing industry,"" Litton said of the special servicing firm he joined in October-a firm he describes as having a lot of flexibility when it comes to executing such regulatory directives as single point of contact (SPOC) and vendor management protocols.

Litton says many of the bigger servicing shops are still set up to do what he considers commoditized types of processes, such as simple payment processing, and aren't able to adapt quickly to the regulatory changes coming down the line.

""[W]e're set up already to be more focused on SPOC, to be highly responsive to consumers, and we have…the low FTE [full-time employee] ratios that are required to deal with nonperforming loans,"" Litton said.

""It's more of a hands-on approach [and] less of a commoditized approach,"" Litton stressed. ""Because at the end of the day, the way we tend to get paid from a special servicing perspective is on added value.""


According to Litton, a commoditized approach that doesn’t yield results doesn’t necessarily create good outcomes for the investor, the consumer, or for the servicer when the work is tied to incentive-based pricing.

He says being a smaller firm that is more densely staffed and more hands-on “creates better outcomes for all three of those parties.”

“I think there’s a definitive need for special servicers in this new world that we’re entering into,” Litton said. “I can see the world from the mortgage servicing space bifurcating into primary servicers and special servicers.

“We may very well end up with large, primary servicers that are doing your ‘rogue’ processingâ€"processing payments,” Litton explained. “And then when loans go delinquent…you may see transfers over to special servicers who were set up and designed to deal with consumers that are past due on their mortgages…to deal with modification programs, short sale programs, [and] to liquidate and foreclose loans in instances where we’re unsuccessful.”

Litton joined Houston, Texas-based Selene Finance from Litton Loan Servicing, where for 25 years he helped his father, Larry Litton Sr., build the company into a subservicer of problem loans with a mortgage servicing portfolio that exceeded $70 billion and reached all 50 states.

Litton held various leadership positions within the firm that carried his name, including VP of default administration, EVP, COO, and ultimately CEO and president.

During his tenure there, Litton developed a cross-departmental plan to increase outreach to customers who were delinquent or facing imminent default. He was also the creative force behind RADAR, a proprietary default-resolution software, and strove to develop alliances with consumer advocacy groups focused on foreclosure avoidance.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.

Check Also

Understanding the HAF

Attorney Marissa M. Yaker details what you need to know about the Homeowner Assistance Fund, and the HAF’s goal of mitigating financial hardships associated with the pandemic.

Your Daily Dose of DS News

Get the news you need, when you need it. Subscribe to the Daily Dose of DS News to receive each day’s most important default servicing news and market information, absolutely free of charge.