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Many experts predict that a new wave of foreclosures will hit th is summer as unemployment rises affecting effecting homeowners and commercial borrowers alike. Unfortunately, the residential and commercial real estate markets will not rebound until 2010 at the earliest. The number of foreclosure filings in 2009 will undoubtedly increase. "A record 12 percent of homeowners with a mortgage were behind on their payments in the first quarter, the Mortgage Bankers Association said Thursday. And the trend is predicted to continue until the end of next year, about six months after unemployment is expected to peak."(Associated Press, 2009, ¶2).
The anticipated next wave of foreclosures is being fueled by prime rate borrowers and entities that have depleted their cash reserves and savings. "The worst of the trouble continues to be focused in California, Nevada, Arizona and Florida, which accounted for 46 percent of new foreclosures in the country and reported the worst delinquency and foreclosure rates on prime fixed-rate loans. These four states have suffered massive job cuts in the housing industry." (eforeclosuremagazine, 2009, ¶ 6). The rest of the country will also see a rise in filings as unemployment crests above 10% nationwide.
The Congressional Oversight Panel, led by Harvard Law Professor Elizabeth Warren, convened recently to discuss the impact of future commercial foreclosures on the broader economy. The dialogue quickly centered around the volume of impending foreclosures. "Richard Parkus, an analyst at Deutsche Bank, said he thought two-thirds of all commercial real estate loans due in the next few years - hundreds of billions of dollars' worth - could go bust" (Gandel, 2009).
Many lenders are delaying the inevitable by offering loan modifications. While these modifications continue to be popular in public opinion, the lender and the economy bear the brunt of the consequences. "Parkus said he thought extending the terms of commercial loans set to default would only delay the problem and make it worse. As more and more bad loans pile up, he predicted, it will become progressively harder for any of them to get refinanced" (Gandel, 2009, ¶ 9).
In fact, foreclosure filings will likely continue well into 2010 driven by yet another wave of residential foreclosures fueled by the so-called pick-a-payment loan. Former mortgage-lender giants Countrywide, Downey Savings, and Washington Mutual relied heavily on this product for volume growth during their hay days between 2003 and 2005. The pick-a-payment loan allowed borrowers to make either an interest only or negative amortization payment for the first five years of the loan. When these homeowners reach the end of their option to pick-a-payment of interest only or negative amortization, then they will see their monthly loan payment double. These additional foreclosures will have a reverberating effect on the greater surrounding real estate market and economy.
James Lowell
Vice President |
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Our Company
We assist banks and servicing companies with foreclosure and Trustee services including preparation of Notice of Default, execution of Trustee Sale, and other default related services. We also assist many corporate law firms and real estate lawyers nationwide with preparation and processing of the aforementioned in order to save valuable legal time and money. This letter and enclosed material will serve to provide you additional information with regards to our services and, hopefully, convey the differences between our firm and other service providers in the industry.
Customer Centricity
We are a Customer-centric default management company. Our focus is to provide your institution with the level of service and degree of commitment and trust that you expect from your own associates.
Senior executives of American Default Management review customer experience data comprehensively to manage cross-channel exposure and interaction. Each department head manages and optimizes the end-to-end customer experience process. Every employee of American Default Management strives to orchestrate seamless integration of enterprise technology to improve speed while increasing customer satisfaction metrics.
Outsourcing saves time and money
As servicing costs have increased, lenders and mortgage servicers have harnessed the expertise of outsourced service providers to reduce time and expense. American Default Management offers customized solutions to help you achieve this goal. American Default Management coordinates the services through our internal system of Foreclosure Trustees, Attorneys, Vendors, and Agents to provide the best possible solutions for your default servicing needs. This effort ultimately streamlines and simplifies client and vendor workflow processes by eliminating multiple points of contact.
Nationwide Coverage Offers Customizable Solutions
American Default Management's services are available on a national level and provide you with a single source of contact for all your protection needs. Our firm's suite of services is available to provide various levels of protection so that you can choose the best service option in alignment with your needs. Any and all of these services can be applied to your portfolio to provide various levels of protection and service.
American Default Management has combined our proven business expertise with the latest technologies to provide an enterprise-wide, customer-centric default management solution. Employees and agents utilize advanced workflow features designed for high-volume processing and scalability to provide the agility, flexibility and customer focus necessary in today's rapidly changing environment.
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First Quarter 09 Foreclosures Rise
Terrie Ceniceros - Operations Manager
According to MDA Dataquick, in the first quarter of 2009, lenders recorded a record 135,431 Notices of Default. The number of filings are up 19% from the first quarter of last year.
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 "Because foreclosures usually lag default notices
by three to six months," DataQuick analyst John
Karevoll predicts that foreclosures may go up this quarter and next quarter (as cited in dailynews.com, April 22, 2009).
I respond quickly to email and phone calls from lenders and beneficiaries around the country regarding foreclosure filings and trustee sales. I would be happy to discuss with you any questions specific to your case or our organization.
Teresa is our Operations Manager in charge of the Trustee Department in our corporate office in Beverly Hills. With over 17 years experience as a Trustee, Teresa is the foreclosure expert for American Default Management. Teresa has an exemplary record of simultaneously keeping hundreds of foreclosure actions on calendar for Trustee Sale within 111 days. She is an industry veteran who is hands-on in her approach working around the clock to find the right option to protect the beneficiary's interest. Teresa enjoys the challenge of maintaining her customer service metrics.
Teresa is an asset management professional who specializes in organizational development, leadership, training, team building and delivering operating and service quality excellence through focus on bottom-line results and effective risk policy. Over the last 17 years, Teresa has gained expertise in leveraging diversity in the work force to build high performance operating teams delivering world class service. While performing Trustee services, Teresa has worked with some of the country's largest institutions at the state and federal level including FDIC, Fannie Mae, Freddie Mac, and the SBA. She has gained experience in loss mitigation, foreclosure, and Trustee services for a wide array of transactions from multi-million dollar loans secured by commercial properties and executed by international borrowers through small home equity lines-of-credit to condominium lien collections. Throughout the years, she has gained invaluable experience with thousands of default related cases and matters involving bankruptcy relief filings, deeds in lieu of foreclosure, evictions, property preservation, and other asset management/loan servicing concerns.
She routinely applies problem solving and analytic skills to defining metrics and measurements for success, then holds her team accountable for delivering against those performance measures through creative and aggressive resource utilization. Teresa's experience spans the financial services and real estate industries including banking, non-performing asset management, default management, bankruptcy and loan servicing. Over the years, Teresa has performed thousands of foreclosures for the resolution and/or recovery of millions of investor dollars. Teresa has also managed complex corporate service contracts and account relationships, as well as large diversified supplier networks in the real estate services space.
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| When is the Right Time to Foreclose?
Piya Tolani - Vice President |
 In this market environment, many Lenders are feeling the aftermath of the economic crisis. The rate of defaults in California is increasing every day, but even more, the rate of "technical defaults" is higher. A technical default is when a borrower technically qualifies for default according to the terms of the loan but the Lender hasn't initiated the foreclosure process. Many Lenders are "working" with the borrower on plans to help them pay their mortgage, possibly lower their monthly payment or even their entire loan amount. And while this is an excellent way to deal with some borrowers, unfortunately, there are many individuals who are taking advantage of the current systems in place. How does this affect the Lender? By not taking action now against the borrower and protecting your right to recovery, you are taking great risk each day of your only collateral depreciating in value further and further in this volatile market. Many experts are predicting an additional 20% decrease in value over the next two to three quarters with the rebound beginning sometime in early 2010.
Piya Tolani, Vice President said "We are seeing many clients who we consulted with months ago who said they wanted to wait on beginning the foreclosure process and "work with" the borrower call us recently in a state of emergency asking us to start the process now! Once we do, many lenders are shocked at how much lower the properties are worth today compared to only a few months ago."
Filing the proper Notice of Default to protect your rights as a lender doesn't mean that you can't continue to work with your borrower. In fact, it gives you a solid position to negotiate from strength! "We're here to help the Lenders protect their rights and more importantly not lose the underlying collateral. We have clients who have had little success in receiving any type of response from their borrowers who are in technical default until they file the Notice of Default. At that point, the borrowers who are serious about working with their Lender, do start communicating and developing a repayment strategy. The ones that don't never had any intention in the first place and were just trying to buy time" said Ms. Tolani.
Piya Tolani is a Vice President of American Default Management responsible for national business development. She can be reached at piya.tolani@amdefault.com
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Tim Walsh appointed President and
Chief Operations Officer
Industry Veteran promises
"World-Class Customer Experience" |
 I am proud to join American Default Management Services and serve our clients to protect their assets. I enjoy the challenge of striving to reduce the number of days it takes to complete our average foreclosure. As far as I am concerned, all transactions should be completed within the minimum time frame of 111 days. Nonetheless, the transactions must be completed diligently by experts who will stand by your side throughout the process. Nothing makes my day more fulfilling than to hear personally from satisfied clients. I if can be of service in anyway please call or email me at Tim@amdefault.com
Tim is a Senior Executive who specializes in organizational growth, sales strategy, market analysis, and leadership development. Over the past 24 years, Tim has held leadership roles in developing some the most successful sales and service organizations in the real estate finance industry with direct responsibility for sales and operations across the country. Tim has established and grown successful operating entities serving clients in mortgage origination, collections, loss mitigation, and foreclosure trust services. Tim is an expert in client relationship development, value-added vertical integration strategy, organizational start-up, and performance improvement.
While with a national servicing company, Tim led the fastest growing sales service organization achieving record levels of both sales and quality performance. Tim then founded his own mortgage service company which he quickly grew to provide national services from a centralized configuration. Upon merging with First NLC, he led the development of a large multi-billion dollar national full service mortgage services company. Since joining American Default Management, Tim established strong client relationships that has led to dramatic growth and leveraged cross-selling opportunities to introduce additional service revenues and strengthened partnerships.
Tim attended Waldorf College and Texas Lutheran University and received accreditation from the University of North Carolina at Chapel Hill's Kenan-Flagler Business School. |
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David O'Connor
Senior Vice President
North East Region
Unfortunately 2008 goes down in history as the year with the largest amount of foreclosure filings in one year. The state of California had the highest total number of default filings for one state at 523,624. This astounding figure meant 1 out of 25 homes in California had a foreclosure filing last year. California was followed closely by Florida with 385,309 filings, Arizona with 116,911 filings, and Nevada with 77,693 total filings.
The number of filings rose in December 2008 despite the foreclosure moratoriums. "That was a surprise" said Rick Sharga, Senior Vice President at RealtyTrac. "There was no way we were expecting a near-record month, and I believe January will be a record-setting month. We're in for a very difficult year."
Unemployment is expected to rise and drive more foreclosure filings throughout 2009. The problem will be compounded by rising payments on negative amortization loans. The negative amortization loans have a cap in place on the amount of interest that can be deferred. These loans will cap out and go into default throughout 2009, especially in the higher priced neighborhoods where the loans were popular for their low payments.
David is a sales executive who specializes in sales and account relationship development, with proven expertise in leading successful teams in banking, consumer credit, mortgage, and default services including collections and legal services. David brings over 25 years experience as a senior sales leader, particularly in the area of strategic client relationships, enhancing value through vertical integration, leveraging the relationships to create additional sales and revenue growth. While at Household Financial Services David was involved in the acquisition of a multi-billion dollar portfolio where he led the project team redesigning the collection/legal department to accommodate the new portfolio including the first ever outsourcing of accounts by HFS. David applies skills in problem analysis and resolution, strong motivation and communication skills, along with superior team building, to create high performing teams.
David graduated from Hudson Valley College in New York and advanced studies at Plattsburg University, New York. David also has received accreditation from the University of North Carolina at Chapel Hill's Kenan-Flagler Business School.
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| Bob Park
Vice President of Field Services |
| I am excited to lead the filed services department for American Default Management. Being a licensed contractor since 1984, I know the value of completing a job right the first time and to the client's 100% satisfaction.
I personally supervise crews throughout the West Coast. My department works seven days a week to meet the demands of the market. I realize that the lender or investor has already waited several months to get the property back. The faster I complete my job the faster the property can be sold, secured, or evaluated. My crews are available for all jobs ranging from board ups and lock changes to foreclosure cleanups and rehabs on residential and commercial properties. Please contact me at Bob.park@amdefault.com for a quote, references, or anything that you might need.
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| Our Services |
| I am pleased to advise you that American Default Management can provide you complete national default servicing from the inception of the foreclosure throughout the entire process, to include but not limited to bankruptcy relief, eviction, property inspections, property securing and preservation and resale. Our firm directly handles cases in trust deed states and uses associate counsel in judicial foreclosure states.
Our mission is to simplify the process and timeline for our lender-clients by improving communications, eliminating multiple layers of vendors, and provide true cradle-to-grave services. By managing multiple servicing areas simultaneously, our staff improves workflow and cuts down on processing time. Our state of the art web portal gives you real time access to your cases 24 hours a day for instant status updates on all aspects of your file. Of course we are always available to answer the phone when the need arises for verbal communications. |
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| Kevin Riley |
Senior Vice President
Kevin Riley has been promoted to lead our expansion into the Midwestern States of MN, IN, IL, MI, WI and OH.
Kevin is a seasoned operations management executive who specializes in leadership, account relationship strategy development, market segmentation and customer experience data. Over the last 25 years, Kevin has led the development and growth of numerous regional and national, high performing teams in the fields of banking, consumer finance, and default services, including foreclosure processing services, loss mitigation, and loan servicing. Kevin also has experience in mortgage modifications, forbearance agreements, loan workouts and short sales. Kevin has built start-up organizations from 5 to over 1,000 professionals, developing all related organizational infrastructure, operating policies, procedures, training methodologies and tools, as well as best practices. Kevin has applied centralized call center structures as well as geographically diverse "local market presence - global service capability" strategies to achieve rapid growth and market penetration successes. Kevin also has direct experience managing service delivery operations and quality control covering a 70 branch network, applying the highest ethics and audit control processes in the real estate financing space.
Kevin has a BSBA, Marketing, from the University of North Dakota with continuing studies in Accounting at Minnesota State University, Moorhead.
You can reach Kevin at kevin@amdefault.com
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Glenn Melnick
"Mortgage Modifications may not stem foreclosures" |
| This according to Bloomberg news April 12, 2009.
Many lenders, servicing companies and private beneficiaries want to give borrowers every opportunity to resume payments on delinquent loans. However, this may not be the best approach as the underlying collateral continues to decline in this market.
"Job losses and falling home prices have a bigger effect on delinquencies than
mortgage terms, and modifications aren't necessarily a better deal for investors than
foreclosures" according to Bloomberg news (April 12, 2009).
Unfortunately, many borrowers wind up back in the same position as they were prior to the modification. Lenders must be extremely diligent to verify income sources before attempting a loan modification. Most borrowers have good intentions at he beginning of a modification but often get overcome by the market.
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| Relationships You Can Trust |
| Our firm was founded on the principle of providing fast, timely, professional customer service to our clients. The life blood of our company is our dedicated, knowledgeable people throughout the country that support our clients on a daily basis. Senior management of our company realizes that our front line is the only line that matters. Our commitment to you, our future client, is that you will receive nothing but the best advice and service expeditiously each and every time you contact us.
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| Other Services |
We are available for any other default related services that you may need including traveling notary service, property inspections, lien searches, lien reports and much more. Call us or email for more information at info@amdefault.com and check our website at www.americandefaultmanage
ent.com
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| References
Associated Press. (2009,May 29). Borrowers with good credit fuel foreclosures in 1Q. Retrieved on June 8, 2009 from internet
Eforeclosure Magazine, (2009). Impact of Foreclosure Properties on Lowe's and Home Depot. Retrieved on June 8, 2009 from internet
Eforeclosure Magazine, (2009). Foreclosed Home List Prices Fall, Numbers Rise in Arizona. Retrieved on June 8, 2009 from internet
Gandel, S. (2009, May 29). Commercial Real Estate - the Economy's Anvil. Time Magazine. Retrieved June 8, 2009 from internet
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American Default Management