With short sales gaining popularity as a more financially sound route to loss mitigation, the dynamic of how they are worked out is changing — with banks providing real estate agents with “warm leads” for short sales.
A panel at HousingWire’s REO Expo in Fort Worth, Texas, explained the industry is turning to a “top down” approach to short sales to accumulate more successful workouts.
“I’m excited to discuss this because it’s a completely new phenomenon,” said Marie Chung, director of REO and Short Sale Services at Modern Realty.
Chung said that rather than brokers cold calling delinquent borrowers to offer short sale services, more banks and servicers are supplying brokers with warm leads — that is, borrowers already willing to participate in a short sale.
Jaysen Greenleaf, director of client relations and business development at Phoenix Asset Management, said his clients — the lenders who hold the mortgages — are now calling borrowers. These lenders then pass on a borrower’s information at the point that the borrower is ready and willing to cooperate in a short sale.
It’s less confusing for the borrower to deal with the bank as opposed to the asset manager, Greenleaf said, and borrowers become more open to the process.
“Our short sale closings increased about 20%,” Greenleaf told conference attendees.
Still, getting borrowers to participate in a short sale can be a challenge, the panelists admitted, causing many brokers to get creative in their tactics. Greenleaf said many of his employees have success by bringing food to the homes in a high-touch fashion. He has also heard of pre-paid Visa card incentives that require a borrower contact a servicer before they can use the card.