Sperlonga Expands Life of Loan HOA Monitoring Service as Aid in Predicting Defaults

Sperlonga Data and Analytics improves early warning system to monitor delinquent homeowners association fees 

Arlington, VA – February 21, 2012 – Sperlonga Data and Analytics of Arlington, Virginia, a subsidiary of national real estate asset firm MMREM, has expanded its service designed to help mortgage lenders and servicers reduce risk by alerting them when borrowers fall behind on their homeowners association (HOA) fees.  Previously a subscription service, the improved version, now known as Life of Loan Association Surveillance (LOLAS^tm), is a valuable safeguard when originating loans or modifying existing mortgages by virtue of warning servicers of potential defaults before mortgage payments are actually missed.

Unpaid HOA accounts are a clear sign of impending mortgage delinquencies and have been extremely difficult for servicers and investors to track.  In many cases, the presence of a homeowners association is actually unknown until problems occur in obtaining clear title to properties.  In some states, HOA claims and liens supersede first lien positions and add delays and considerable expense to the resale process.

Life of Loan Association Surveillance is simple for servicers to initiate.  When new loans are originated or modifications are made, Sperlonga provides a form to execute with the borrower that allows Sperlonga to communicate directly with the HOA.  LOLAS then monitors monthly payments and notifies the servicer when payments are missed.  The LOLAS service complements Sperlonga’s Delinquency Check^tm, which spot checks to make certain borrowers are not severely delinquent on HOA payments prior to a loan modification or short sale, forewarning of potential difficulties with those transactions.

“Borrowers will typically stop paying their HOA fees before they stop making their mortgage payments,” says Matt Martin, Sperlonga’s chairman and CEO of MMREM.  “It is of great assistance to know as early as possible when future default is likely,” he says, “and in the case of loan modifications, it can be even more critical when qualifying borrowers to minimize productivity losses.”  Martin points out that complications surrounding HOA claims frequently create problems for servicers when working on loan mods or other default prevention strategies.

In addition, HOAs sometimes include additional amounts beyond the overdue HOA assessments, such as attorney fees and other charges that can be negotiated down by an expert to the benefit of servicers and investors.  “When you know that there is an HOA involved in the loan and there are delinquent payments that can create problems with title, loan mods, short sales and remarketing efforts, clarity is necessary to help all parties make informed decisions,” Martin notes. 

LOLAS is already resonating with several investors and servicers that are enthusiastic about having a confidential resource for nagging and often expensive HOA-related problems. But in the end, everyone benefits when the path is smoothed in getting HOA claims satisfied.  “It is really about communication,” Martin says.  “HOAs need payment so they can operate and maintain their communities to keep property values high.  Servicers want HOA claims resolved and also desire better, more stable values in communities,” he observes.  “We bring them together, keep an eye on HOA payment streams for them with LOLAS, and maintain open lines of communication for everyone’s benefit.”

About Sperlonga Data and Analytics

Based in Arlington, Virginia, Sperlonga Data and Analytics is an affiliate of MMREM, a national asset management firm whose clients include multiple federal agencies and private sector servicers, investors and insurers.  Sperlonga Data and Analytics was created to provide a centralized interface for homeowners’ associations (HOAs) and servicers in order to help stakeholders minimize losses associated with transaction delays and lost revenues caused by HOA claims.   The company also provides additional outsourced management services for the clearing and resale certification process.  Additional information is available at www.SperlongaData.com.

Press Contact:

Jim Hennessy

Strategic Vantage Marketing & Public Relations

JimHennessy@StrategicVantage.com

858.774.0201

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