It would be an understatement to describe the last five years in the mortgage industry as turbulent. Even as the market sluggishly heads toward recovery, lenders are still being besieged on a daily basis with repurchase demands from GSEs, MI companies and third-party investors. And now, Fannie Mae and Freddie Mac are demanding the repurchase of loans that are not even delinquent!
If you are losing money due to repurchase demands, we can help. In fact, over the past three years we have saved some of the largest banks in America tens of millions of dollars that they otherwise would have paid pursuant to repurchase demands.
RPM handles initial rebuttals, as well as appeals for demands that have been unsuccessfully defended previously, in the following subject areas:
• Occupancy issues
• Stated and other income issues
• Straw borrowers
• Appraisal issues
• Underwriting issues
• False verifications
• Employment misrepresentation
• Undisclosed debts
• Title issues
Below are representative mortgage repurchase demand letters for actual cases that we have successfully defended on behalf of our clients. Please understand that the vast majority of repurchase demands that we receive are highly technical and complex, requiring vast amounts of research and man-hours.
Loan Portfolio Services Case Studies
It’s no secret that residential property values, as well as the corresponding values of the mortgages on those properties, have plummeted. In some markets, values have dropped by 40 percent to 60 percent of original appraised value. As a result, mortgage lenders face the very real possibility of substantial loss on every property on which they foreclose—and that doesn’t include the additional costs faced by lenders when they add these properties to their REO inventory, such as legal fees, maintenance, brokers commissions, homeowners and condominium association assessments, taxes and insurance.
That’s why lenders or other owners of distressed mortgage portfolios owe it to themselves and their stakeholders to use the services of RPM. RPM offers a flexible, cost-effective approach to loss mitigation that encourages borrowers to remain in their homes via affordable loan modification solutions. This approach minimizes the loss to the lender and avoids the unnecessary addition of properties to REO.
Through our innovative servicing strategies and emphasis on encouraging borrowers to become current, pay off, or modify their loans, the experts at RPM-- attorneys, underwriters, appraisers, real estate agents and highly skilled mortgage banking professionals--have been able to help our clients streamline their portfolio operations, thereby improving efficiency, cutting costs and maximizing returns.
Additional strategies include the negotiation of forbearance agreements, deeds in lieu, short sales and refinances. RPM will only recommend foreclosure as a last resort—and only when it presents a viable exit strategy for the client.
RPM has remained ahead of the curve by providing an REO-to-Rental program for our clients for over a year--way before this type of program became popular. Now, rather than immediately liquidating post-foreclosure properties at an enormous discount, our clients preserve their assets, cashflow and value by rehabilitating and renting REO properties. The federal government and Fannie Mae, along with major banks, have now adopted this strategy, recognizing that it yields superior results to the quick sale of REOs. Today, RPM’s clients are receiving steady cashflow and have preserved their assets and, when the market improves, they will be able to sell these properties at a reasonable return.
In addition to our REO-to-Rental program, the following Case Studies highlight the effectiveness of RPM’s “out of the box” approach to loss mitigation and exemplify the types of financial benefits we offer to our clients.
1. A borrower with a $646,000 loan was seven months delinquent--and had been unreachable by the volume servicer—when RPM got involved. Through diligent skip-tracing, we found and contacted the borrower and persuaded him to remain in the home. We encouraged him to do so by negotiating a modification on the day of the foreclosure sale. The borrower has remained current pursuant to the modification agreement. A $286,000 loss had been anticipated if the loan had gone to foreclosure and the property sold as REO.
2. A borrower with a $116,000 loan who had fallen slightly delinquent sought a modification. He was encouraged by RPM to seek an FHA refinance, was subsequently approved, and closed within a month—despite the delinquency. This resulted in a 100% recovery for the portfolio owner.
3. A borrower with a $213,000 loan who was five months delinquent and unable to make his payments was counseled by RPM to list the property for sale. He ultimately sold the property at a price close to the unpaid loan balance, resulting in minimal loss for the portfolio owner.
4. A borrower with a $128,000 loan who was three months delinquent had become bogged down in negotiations with the servicer for 90 days as the property moved closer to foreclosure. Thanks to RPM’s intervention, the modification terms were quickly refined, agreed to and finalized within two weeks, thereby resolving the delinquency and avoiding a significant loss. The borrower has remained current under the modification plan.
5. A borrower with a $192,000 loan on an investment property who was seven months delinquent refused to enter into a modification plan. RPM was instrumental in finding an experienced real estate agent to aggressively market the property. The portfolio owner ultimately approved a short sale that resulted in a modest net loss—much less than if the property had been foreclosed upon and sold as REO.
In addition to the individual borrower resolutions referenced above, RPM offers the following special servicing, portfolio management and oversight services that add significant value to the loan portfolios of our clients:
• Critical review of third party invoices
• Forensic file analysis and management of tax, title and casualty insurance claims and litigation
• REO management
Call RPM today at 866-661-4776 to see how we can rev up the returns on your portfolio.