Making the Complex REO Asset Management Process More
Manageable With Technology
The combined economic
downturn, increase in foreclosures and declining property values
have flooded lenders and servicers with an unprecedented number of
REO properties.  Maintaining properties that have been through
foreclosure increases risk and is expensive – with costs to the
lender/servicer estimated to be 30%-60% of the outstanding loan
balance. To minimize the costs and risks associated with holding and
managing REO properties, lenders/servicers need to dispose of them
quickly for the highest possible return.

Managing REO properties is not only expensive but also a
multifaceted process that involves a myriad of complex tasks.
Documents must be filed; deeds recorded; files sent; homeowners’
association information obtained; brokers assigned; title cleared;
occupancy verified; tenants managed and vacated; assets inspected
and preserved; appraisals/BPOs completed; liens cleared; repairs
made; marketing plans devised; property listing completed; offers
reviewed; auctions organized; sales finalized; and the list goes
on.

Prior to the surge in bank-owned properties, it was possible to
manage all of these tasks with a simple spreadsheet or database.
However, the burgeoning REO volume and expected wave of new
foreclosures present a daunting challenge to lenders and servicers.
Without the proper tools to manage the REO lifecycle, the process
can quickly become unmanageable. Manpower requirements increase and
the risks of lost sales, missed closings, local/state fines and
property damage rise.

Fortunately, LPS Desktop REO provides two effective solutions for
those that handle REO management and disposition – REO Monitor and
REO Broker Direct.  Through LPS Desktop’s Process Management
application, these solutions offer REO users the same functionality
as foreclosure and bankruptcy users: process management, workflow,
intercoms, notes, Issues and Holds.

LPS Desktop REO Monitor™ - Outsourced Asset Management
Monitoring Service
LPS Desktop REO Monitor™ enables
servicers who outsource their REO activities to outside providers to
manage these providers through one system, as well as oversee the
REO lifecycle process, from asset management through disposition.
With REO Monitor™, outside providers supply daily status updates on
all REO tasks performed on the servicer’s behalf by uploading
standardized files containing 250 data elements to REO Monitor™ for
processing and analysis. REO Monitor™ not only creates status
reports, but systematically initiates action using workflow
functionality.  LPS Desktop’s Process Management workflow
engine automatically handles approvals on offers, proposed repairs,
listing prices and more. REO Monitor™ also automates exceptions
through user friendly work queues and processes.

With REO Monitor, no additional software or infrastructure is
required for the REO outsource providers. They handle day-to-day REO
activities and manage their brokers and vendors from their own
proprietary systems. Outsource providers simply create and send a
standardized status file to REO Monitor™ each day, making
implementation simple and minimizing the disruption of their
established operations and procedures.  REO Monitor integrates
with outside systems, including LPS’ Mortgage Servicing Platform
(MSP), LPS Desktop Invoice Management and LPS Desktop Document
Management.  In addition, outsource providers can choose to
integrate REO Monitor with providers’ own proprietary
systems.

REO Monitor™ benefits its clients by centralizing all foreclosure
and subsequent REO activity on LPS Desktop, making it more efficient
to track loans through these processes. REO Monitor™ helps its
clients minimize complex REO task-tracking expenses by aggregating
all related activities in one central hub for viewing and
action.  As a result, clients save time and minimize the risk
of missed offers and closings, as well as the potential imposition
of fines. In addition, clients can effectively maintain the saleable
condition and value of their assets by implementing and tracking
repair and regular maintenance through the system. REO Monitor also
facilitates the maximization of sales revenue by accurately tracking
offers and counteroffers to ensure that clients obtain the best
possible price and sell the property in the shortest possible
time.

LPS Desktop REO Broker Direct™ – In-house REO Asset
Management Technology
For those clients that choose to
manage their REO broker relationships and activities in-house, REO
Broker Direct™ provides an all-inclusive system to manage REO
activities from one central location.
REO Broker Direct
manages all steps of the REO lifecycle, from referral through
disposition. The system allows clients and their brokers, attorneys
and other vendors to work together to protect REO properties and
dispose of them as efficiently and quickly as possible, while
obtaining the highest possible sales price.

REO Broker Direct also takes advantage of LPS Desktop’s™
powerful, customized Process Management workflow engine to automate
and manage processes, sub-processes and exceptions.  This
allows the client to efficiently perform necessary actions and
closely monitor each step in the REO process.

REO Broker Direct incorporates time-saving tools that help
clients select brokers, develop listing strategies and create
marketing plans. With features like the Asset Summary Screen (an
at-a-glance view of the REO status), and valuation, negotiation,
offer and counter-offer histories, critical information is always at
the processor’s fingertips.  Processors can also take advantage
of additional services provided by LPS, like title and closing
services, valuations and property preservation, directly from within
the system.

Through its integration with LPS Desktop’s™ Invoice Management
and Document Management applications, REO Broker Direct streamlines
paper-laden REO tasks by incorporating paperless, electronic
technology. These two integrations enable all invoices and documents
to be handled from a single, central portal in the REO Broker Direct
application. Documents and photos associated with the REO property
can be digitized and stored in the system as part of the REO
property record, and each invoice can be electronically generated,
sent, paid and included as part of that record. In addition, REO
Broker Direct integrates with MSP for real-time updates to
clients.

Not only can REO Broker Direct be used from within the client’s
environment, but it can also be used by outsource providers whose
vendors use the LPS Desktop™ system.

Conclusion
Although the asset management
process can be overwhelming and complex – even during normal market
conditions – it can be simplified and expedited with the right
technology solution. Regardless of whether REO management activity
is outsourced or managed internally, LPS Desktop’s REO solutions can
help its clients streamline processes and create efficiencies within
their REO departments, lessening the negative financial impact on
those who have already been hit hard by the real estate industry
downturn.

For more information on how to effectively maintain your REO
assets and sell them for the highest possible value, please call
800.991.1274 or [email-masked].

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