Since the collapse of the housing market, many default servicing providers are learning to manage less volume while looking to maximize additional market opportunities. Superior Home Services, Inc. pioneered its Federal Housing Administration conveyance solution more than 30 years ago, and it still provides a unique value to mortgage servicers to this day. But as volumes decrease, Superior has looked to leverage its process expertise and its experience in other lines of business.
Patrick Nackley, senior vice president of Superior Home Services, said Superior has developed a stand-alone hazard claim management solution for a fee separate from its core business to address the needs of its clients managing conforming, bank-owned, and private investor portfolios.
“Superior developed the only programmatic hazard claim and remediation solution to address the specific conveyance requirements for damaged FHA properties in the default cycle,” Nackley said.
“By considering the long-term goals of a mortgage servicer regarding conveyance, Superior’s process reduces the corporate cost involved in FHA remediation and conveyance, as well as potential hold times.”
HUD requires most, if not all, of the damaged FHA properties to be repaired to conveyance condition. Superior had previously filed hazard claims for no fee as part of its FHA conveyance program, but due to some changes in the legislative and regulatory climate, the company introduced its Hazard Claim Management program. This program gives clients much more flexibility in addressing all loan types, particularly conventional loans, in their default portfolio.
“Freddie and Fannie require approval for any remediation efforts prior to conveyance, and historically such approval has been rare,” Nackley said.
“Our office manages the entire hazard claim and remediation processes on those damaged FHA properties and ensures that the bank has a conveyable property, having used the insurance funds and having spent no corporate dollars to reach this goal.”
By repairing the property with the insurance funds, the bank avails itself to the recoverable depreciation benefit — and the overhead and profit — that is part of the insurance contract.
“This benefit can only be realized when the servicer repairs,” Nackley explained. “When you remediate later on in the default process, particularly after waiting for foreclosure sale, you often have, as a mortgagee, waived your right to these benefits.”
Superior has been managing hazard claims for mortgage servicers for more than 30 years, with the ultimate goal of maximizing those funds to remediate the damage at the subject property, and then executing said repairs with the insurance funds available.
“Naturally, Superior had to effectively capture every available dollar available under the insurance policy, and ensure that the settlement offered by the insurer was actually sufficient to complete the repairs,” Nackley said. “No other vendor in the industry brings this kind of process expertise to the marketplace.”
By offering a hazard claim management solution, Superior can now manage a mortgage servicer’s entire damaged property portfolio: government loans, conforming loans, private investor and bank-owned inventory. This suite of services provides Superior more flexibility in meeting the needs of every mortgage servicer and the individual characteristics of their default servicing portfolio.