LERETA, a national real estate tax and flood service provider, has launched its Additional Parcel Search Solution – a way to improve the identification of additional parcels at the initiation of tax service, thereby reducing portfolio risk.
Identifying additional parcels associated with an address – without going through the expense of using a legal description on every loan – is a tax-service challenge. If a file is missing parcels when a property is set up for tax service, the mortgage servicer can be exposed to potential losses from penalties, interest and lost properties, as well as borrower dissatisfaction.
“Over the past 30 years, mortgage servicers have had to rely on virtually the same tax service solutions without significant enhancement or product innovation,” says John Walsh, CEO of LERETA. “LERETA has been aggressively working on methods to reinvent tax service technology and processes. Additional Parcel Search Solution is just one initiative in that agenda, and it’s an important solution that can reduce servicers’ financial risk and increase borrower satisfaction.”
LERETA recently ran a test for a top-five servicer that included a subset of approximately 16,000 loans that had been parceled by another tax service vendor. LERETA’s Additional Parcel Search Solution found 11 properties that had previously been unidentified. Although 11 loans represents only 0.1% of 16,000 loans, those loans could see $2.4 million of potential losses or 10 basis points of MSR value.
“We understand the importance of identifying these parcels and the difficulties created from the inability to discover them,” Walsh says. “This is an area in the tax service landscape that needed an injection of innovation.”