Excerpt from Chronos White Paper Featured on HousingWire’s REwired Blog

Thursday, August 11, 2016 – An excerpt from a new Chronos White Paper recently appeared in HousingWire. The paper includes a description of the FHA’s CWCOT program, but also a discussion of some of the challenges that servicers face when trying to implement the strategy. The CWCOT program offers significant cost savings to servicers who are freed from the difficult process of conveying real estate to FHA asset managers.

Given that Chronos is currently working with a number of the nation’s top ten banks, we are aware that monthly fees and penalties incurred by servicers related to missed timelines in the FHA loan conveyance process amount to many millions each month. For the largest banks, the costs range from $15 to $35 million per month. Over the course of the year, the largest banks are faced with a $100+ million problem.

Unfortunately, the costs related to FHA properties in default begin to add up long before it’s time to convey the property. The government requires that the real estate be conveyed in good condition, which often requires extensive property preservation efforts. This involves inspections, field services and all of the vendor management that goes with it. This is not the same property preservation process that servicers used during the initial years of the downturn. In fact, some servicers are surprised by just how difficult property maintenance and similar field services can be as they enter the CWCOT program.

You can find the excerpt here or download the entire paper here.