New real estate industry data just released by Lender Processing Services (LPS), the nation's leading provider of mortgage processing services, reveals that while mortgage delinquencies continue to drop, an enormous backlog of foreclosures still exists.
As of the end of last month foreclosure inventory levels stood at more than thirty times that of monthly foreclosure sales volume. That is mind boggling! This means a great number of houses are sitting, sitting, sitting, and are in need of maintenance and foreclosure cleanup services.
According to LPS, this industry trend is expected to continue for quite some time. Lender Processing Services and other industry gurus believe the backlog of foreclosures will likely become "REO" properties (in essence, properties owned by banks and mortgage companies where no mortgage exists, no income is being produced). As a foreclosure cleanup company, or a real estate contracting service, these often abandoned and vacant homes in foreclosure or pre-foreclosure states can mean more contracts for your company.
Have you signed up with several of these larger entities so you can get on their vendor lists of foreclosure cleanup, lawn maintenance, painting, locksmith, inspection, repair and window boarding companies? Remember, business is a numbers game; the more property preservation companies to which you reach out, the more money you'll bring in to your foreclosure cleanup business and the healthier your bottom line will be. (You cannot stop at signing up with one or two companies. Plan to reach out to at least five or 10 per week.)
The average U.S. loan in foreclosure right now has been delinquent for a record 537 days. A full 30 percent of loans in foreclosure have not made a payment in over two years. That's even more business slated to hit the market in the coming months.
Many mortgage companies and banks quite simply have their hands tied fighting robo-signing lawsuits. They are embattled with government in effort to reach settlement agreements for perceived (and many solidified) wrongdoings. Once settlement agreements are reached and robo-signing lawsuits settle down, the flood gates will open up even more with formal foreclosure filings.
Foreclosure cleanup is an evergreen business. We're at the beginning. Are you ready? Plan to get organized, licensed and insured, and start reaching out to property preservation companies that often handle hundreds of homes at one time. They won't know you're out there unless you sign up with them.
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