In response to the overwhelming amount of foreclosures that could have been avoided through a short sale, Retreat Capital Management Group, a provider of loss mitigation and outsourced fulfillment solutions, and First Team National Default Solutions have formed a joint venture to manage the short sale segment of the loss management process.[IMAGE]
According to Lawrence Yun, chief economist for the National Association of Realtors, a record 3 million homes received foreclosure notices in 2009. Cameron Merage, CEO of First Team National Default Solutions, said there is no reason foreclosure numbers should be as high as they are, especially when short sales are a viable and relatively quick alternative.
The new joint venture creates a complete short sale solution that includes Retreat Capital's short sale fulfillment services, a nationwide real estate brokerage's sales and marketing expertise, and powerful short sale and REO technologies of a top portfolio management provider. Retreat Capital is responsible for processing, underwriting, and negotiating short sale cases, and First Team National[COLUMN_BREAK]
Default Solutions, which has a track record of achieving short sale closing ratios of 84 percent, provides the marketing and listing of the properties.
""A short sale can take six months or longer to complete, so there's a huge need for providers that can shorten turnaround times for lenders, servicers, and delinquent borrowers,"" said Arvin Wijay, CEO of Retreat Capital.
According to the companies, a lack of borrower follow through is one of the biggest challenges lenders face in getting short sales completed. A real estate agent will detail the short sale process and list the property, but if borrowers don't have immediate access to an agent, they often ignore the situation altogether and find themselves in foreclosure, Merage said.
Merage explained that the joint venture addresses this issue by facilitating a ""warm transfer"" of the borrower/seller to a qualified real estate agent-all within seconds of getting the short sale option from a lender. In addition, he said it is a huge benefit for lenders, as it eliminates the chance of losing contact with a delinquent and distressed homeowner.
Jim Orth, managing partner of Retreat Capital, said the irony is that the industry already has much of the technology it needs to better manage the process of settling delinquent or defaulting loans. Oftentimes, though, solutions are not implemented because the lender doesn't have access to the proper providers, he said.
""Creating an alliance of qualified professionals takes time that backlogged lenders just don't have,"" Orth said. ""We formed this joint venture to fill the need for a fast, easy, out-of-the-box short sale solution and to help lenders get those seriously delinquent loans off their books as quickly as possible.""