The increase in mortgage origination and refinance activity over the past few years, fueled by low interest rates and loose lending criteria, has left the industry in turmoil with many companies holding large loan portfolios.

During this time household debt has nearly tripled. 1.6 million households filed bankruptcy last year with charge offs expected to escalate as loans mature and ARMs adjust. The majority of charge offs are coming from subprime portfolios which are now undermining corporate profits. Additionally, stringent bankruptcy legislation is making it difficult for borrowers to free themselves from their current debt burden. The Home has become a “margin account”, extending the inevitable for highly leveraged borrowers.

Specialty Mortgage servicing is a $12 Billion market experiencing strong growth with the collapse of the subprime mortgage market. Wall Street and financial institutions are actively seeking the expertise needed to understand the exposure of these special loans while managing and liquidating their high-risk investments.

The current market situation has created tremendous risk for companies lacking sophisticated strategies and strong partnerships capable of managing the future needs of asset portfolios. Traditional mortgage servicing companies are not structured, or equipped, to handle the growing demands and the requirements of high-touch servicing.