Special Servicing: Default Management

Special Servicing: Default Management

By 2010, 23% of U.S. homeowners had negative equity in their homes. As the housing crisis spread, an evolution took place in the loss mitigation process. Managers in Payment Resolutions, Non-Retention Resolutions, and REO had to expand their skill sets in order to maximize cash flows for their investors. Rather than relying on full repayment or REO sales as servicing did pre-2008), Payment and Non-Retention Resolutions became more flexible, evolving into more borrower-friendly resolutions. Loan resolution at earlier stages of delinquency aligned the best interests of both investor and borrower...