Business was already good at one specialty servicer who has been preparing for more growth as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. But the company wasn’t expecting the increased demand tied to the foreclosure affidavit issue.
During the past two years, demand has been “fast-growing” for specialty servicers like Wingspan Portfolio Advisors, the Carrollton, Texas-based company’s founder and chief executive officer, Steve Horne, said in an announcement Monday.
The Dodd-Frank act will help the surge in demand for specialty servicers continue, according to Horne. He said his firm has “preparing for an onslaught” as a result of the new law.
“Dodd-Frank will bring several new aspects to the loan servicing landscape,” Horne said. “These include empowering bond investors and other stakeholders to have a greater say in the default servicing process, along with the methods used and who uses them”
He explained that the legislation puts the focus on the treatment of defaulting loans and providing more control to entities with funds at risk in both individual transactions and loan pools.
But the executive has been surprised that more servicers and investors are turning to specialty servicers as a result of the foreclosure documentation crisis, or “Foreclosure-Gate.” He said primary servicers are struggling to maintain compliance in a cost effective way.
“These latest developments in foreclosure documentation bring an entirely new dimension to the demand for our services,” Horne stated. “Investors and servicers alike now have greater motivation than ever to ensure both that the loss mitigation process is fully documented and effective, and that all legal processes, including foreclosure, are compliant.”
The CEO noted that specialty servicers are typically compensated based on how well they prevent foreclosures and bring the loans back to a re-performing status. His firm is “very high touch,” spending more time with individual borrowers than a primary servicer can.
