Rockhouse Capital buys real estate based investments without the hassle or expense of property management. While many property managers charge as much as 15% to manage your investment properties, our MBS portfolios are serviced at a fraction of that cost.
Last month CoreLogic and the Urban Institute hosted a seminar that discussed Emerging Issues in Mortgage Servicing:
Ed DeMarco began the conversation by stating the need for service compensation reform, an idea that was reiterated by the other panelists throughout the evening. He addressed the ever-widening gap between the cost of servicing a performing loan and the cost of servicing a non-performing loan…
Laurie Goodman agreed that the current compensation structure is misaligned; relative to gross revenue, it costs too much to service non-performing loans and too little to service performing loans.
Although there can be great value in non-perforning loans, we prefer to invest in performing loans. Performing loans are easier to analyze and the servicer’s job consist of little more than accepting and forwarding principal and interest payments to investors.
Because it is difficult to predict how long (and thus expensive) the foreclosure process will be, non-performing loans are more difficult to analyze. Costs increase when a subservicer is hired to contact delinquent borrowers and manage the foreclosure process.