Title Firms Can Assist With Modifications.(Point of View)

Byline: Bruce Hawley

Despite tough economic times, many companies in the real estate services industry are finding new business opportunities to assist the embattled real estate, finance and banking industries. In particular, title companies experiencing declining revenues tied to stagnant real estate markets are bringing their expertise to help borrowers and lenders with the restructuring of their mortgages.

According to Bloomberg, beginning in 2007 to the third quarter of 2008, bank losses exceeded $500 billion, which leaves a great deal of delinquency and loss mitigation to facilitate. Data from Loanworkout.org and the Foreclosure Working Group suggests that servicers' loss mitigation departments are severely strained in managing the sheer number of delinquent loans. The Group further said servicers, investors and government officials should work together to develop a more systematic loan workout system to replace the intensive, individual, "hands-on" loss mitigation approach.

Consequently, companies with experienced title, mortgage banking and origination services sales professionals who specialize in loan workouts and modifications are now at a premium in the industry. The skill set required for this type of work includes a deep knowledge of the mortgage, credit and collection industries as well as the ability to understand the legal landscape of the loan restructuring process. It also requires an innate business style that lends itself to sensitivity and integrity in transactions that are often contentious and highly stressful.

Currently, loan workout services are needed in both commercial and residential lending markets.

Over the past 10 to 15 years, when times were good in the real estate industry and credit markets more widely accessible, there was little to no demand for workout or loss mitigation expertise. But with the deflated real estate market pulling borrowers and lenders into the red, or at least close to it, the lending industry is looking to the title insurance industry to assist them with the title aspects of mortgage modifications and loan workouts.

Residential vs. Commercial