The numbers are staggering. In the first quarter of 2009, foreclosure actions were initiated on 1.37 percent of first mortgages nationwide, according to the Mortgage Bankers Association (MBA). That's a level not seen in almost 30 years of reporting on such data. Some studies suggest as many as 5.4 million mortgages are currently delinquent. * Because the pipeline of borrowers in trouble is so very large, it appears it will be some time before the massive glut of foreclosed properties moves through the real estate--owned (REO) process. * Although it is not a story mortgage lenders like to tell (or hear) the simple fact is the default, foreclosure and REO market will be a large one for the foreseeable future. It is also becoming increasingly apparent that few originators nationwide were truly prepared for the enormous spike in properties needing to be retrieved, maintained and resold. * Standing processes and methodologies for processing or outsourcing the work on REO properties have shown quite a bit of strain, or even snapped, under the crushing weight of this unprecedented volume. And many lenders have quickly found themselves turning to outsourced solutions to manage the crisis. But industry insiders are beginning to observe that a significant number of these ad hoc outsourcing strategies have given rise to problems of their own.
