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New REO Program Reduces Sales Cycle by 30 Percent

""Champion Mortgage"":http://www.champion.com, a division of ""Nationstar Mortgage LLC"":http://www.nationstarmtg.com, announced the launch of its REO Financing Partner Program yesterday. The program, developed specifically with today’s distressed market conditions in mind, has shortened turn times on REO foreclosure sales by 30 percent, which in turn has helped decrease loss severity on REO properties by over 10 percent, the company said.
With 3,500 properties in its own servicing portfolio, upon evaluation, Nationstar Mortgage found that more than 25 percent of its REO sales were falling through, even though the buyer was originally pre-qualified by another lender. The fallout increased property’s ""days on the market"" by 40 to 60 days compared to sales that were financed internally.
""By leveraging our national origination platform and expertise, we are able to mitigate the risk associated with the lending process in today’s ever-tightening market"" said Jim Gallagher, SVP of REO Financing at Champion Mortgage. ""We can determine within twenty-four hours of receiving a bid if a buyer is truly qualified under the complex and ever-changing FHA conforming loan requirements. By ensuring the buyer is bona fide before accepting the offer, we don’t waste valuable time we could be using to market the property.""
By securing greater control over the transaction and avoiding a ""dead-end"" offer, Champion has been able to lower loss severity by an average of eleven percent, Gallagher said. On a $150,000 property that comes to a savings of $16,500.
""In this challenging environment, REO servicers and asset managers that have limited to no origination platforms are continually looking to find new ways to reduce sales cycle time, increase sales, and lower loss severity,"" added Tony Barone, CEO of Nationstar and Champion Mortgage. ""Our successful eleven-year track record servicing our own portfolio of over 88,000 accounts gives us a competitive advantage in offering REO financing strategies for our partners. By leveraging our centralized origination platform of over 200 loan officers licensed in 47 states, we can provide immediate support to large servicers and outsourcers that are managing tens-of-thousands of REO properties nationwide.""
The company has already established partnerships with a number of REO asset management companies as well as several large mortgage servicing companies that in total manage over 50,000 REO properties nationwide.
""When we began establishing our initial REO Financing Partnerships in the second quarter of 2008, we quickly realized that there was a strong interest for something new and proven to attack the growing number of REO portfolios,"" continued Barone. ""We developed numerous national-scope partnerships supported by a dedicated REO Financing operating division that can expertly and efficiently handle and communicate with all parties involved in the REO transaction process including the buyer, the broker and the REO asset manager.""