Short Sale Monitoring Solution

Short Sale Monitoring Solution provides lenders, servicers and investors with a unique tool to combat the growing incidence of short-sale fraud and prevent avoidable short-sale losses caused by below-market property valuation. According to our 2011 Short Sale Research Study, we estimate unnecessary losses related to risky short sales at $375 million annually.

At CoreLogic, we consider short sales risky any time a property bought through short sale resells for a significantly higher price. The possibility of fraud exists when the initial short sale and resale transaction take place within an unrealistically short timeframe or the resale takes place before a contractually agreed upon holding period passes.

Even when no fraud exists, resale prices that are considerably higher than the initial short-sale price indicate that below-market valuations are setting up the opportunity for investors to capitalize on valuation inaccuracies.

Prevent Fraudulent Quick Flips (Flopping)

Fast, highly profitable reselling (flopping) can occur when lenders are unaware that higher-priced offers exist on a property and/or the buyer has initiated the resale before completing the initial short sale. Short Sale Monitoring identifies concurrent transactions and flopping by comparing the addresses of pending short sales you submit against our contributed loan application database, which contains 65 percent of annual loan applications. When we find a match, we alert you immediately so that you can put a hold on the transaction pending further investigation. Our alert reports can also identify the entity or entities perpetrating the potential fraud.

Enforce Contractual Holding-Period Clauses

Increasingly, lenders are including holding-period clauses in purchasing contracts to protect against flopping. While such clauses discourage honest investors from buying properties with the intention of flipping, they do not stop fraud perpetrators and are difficult to enforce. Short Sale Monitoring Solution continues monitoring properties sold through short sale, sending immediate alerts when a short sale property is being resold. You receive the alert whether you’re the original short-sale lender, the lender on the on the resale transaction, or both. If you’re the original lender, you can investigate the pending transaction and determine if it violates the purchase agreement. If you’re the resale lender, the alerts serves as notice that you could be party to fraud if the transaction closes.

Curb Missed-Opportunity Losses

Major losses can occur when inaccurate pricing results in below-market short sales. Savvy investors that buy undervalued properties and resell them for a healthy profit are simply taking advantage of your valuation errors and realizing profits that could have been yours. Short Sale Monitoring Solution puts a postclosing watch on short-sale properties, enabling you to analyze and continually refine pricing methods to avert missed-opportunity losses.

Analyze Short-Sale Performance

Short Sale Monitoring Solution offers retrospective monitoring as an optional tool you can use to assess short-sale performance. Retrospective monitoring allows you to analyze your short-sale portfolio to uncover fraudulent transactions, assess pricing-method accuracy and identify problematic geographies.

Reduce Short-Sale Losses

Every short sale involves a loss, which makes Short Sale Monitoring critical to your financial success. Before, during and after the short sale, Short Sale Monitoring Solution identifies fraud and helps prevent you from subtracting unnecessary losses from the bottom line.

Preclosing

  • Matches pending short sales against a contributed database containing 65 percent of annual loan applications
  • Alerts you if other loan applications exist on the property for 45 days before submission through closing
  • Provides a report with the pertinent information you need to investigate and take action
  • Offers the ability to identify the entity or entities perpetrating the potential fraud
  • Creates a deterrence factor, which may further reduce fraud attempts

Postclosing

  • Checks short-sale closing data against databases containing short-sale transactions, 65 percent of annual loan applications, and public-record property information covering 99 percent of U.S. properties and 97 percent of residential real estate transactions
  • Continues monitoring for address matches for 90 days
  • Alerts you to resale of properties sold through short sale
  • Detects fraud by spotting resales taking place outside of the expected loan-processing timeframes, and by creating visibility to the insiders who may be perpetrating the fraud
  • Helps enforce holding clauses written into purchasing contracts
  • Minimizes missed-opportunity losses by allowing you to detect and correct valuation-method errors

Retrospective Analysis (Optional)

  • Analyzes completed short sales
  • Detects fraudulent transactions and allows you to choose whether to pursue criminal prosecution or legal action
  • Allows you to determine missed-opportunity losses and assess pricing method accuracy
  • Helps you spot problematic geographies with high rates of fraud and/or below-market valuations

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