Vacant and REO properties: How much are they dragging down your portfolio yield?
A 2023 MBA study pegged the annual servicing costs of a non-performing loan at $1,857 vs. $176 for performing loans. That’s $1,681 of additional expenses on each loan going to collections, loss mitigation, bankruptcy, and foreclosure and post-sale. These expenses also include vacant property/real estate owned (REO) costs and fines associated with property maintenance, HOA fees and utility bills.
Rocktop focuses our technology and in-the-trenches servicing experience on ferreting out and plugging yield leaks deep within the default process. Our new partnership with Bron takes on the extremely complex challenge of minimizing costs and fees associated with vacant and REO properties.
There are 35,000 municipalities in the United States, each with its own set of rules, regulations and fines associated with these properties. It’s impossible for servicers to keep up with each municipality’s ever evolving rules and regs, much less know which addresses in their portfolios are in danger of violations.
Starting with property registration, Bron monitors the servicer’s portfolio, proactively flags at-risk properties before a violation occurs and then works with the local municipality to ensure all vacant property rules and regulations are met. All Bron clients are indemnified. If there is a fine to be paid, Bron takes care of it; preserving the servicer’s reputation as well as their bottom line.
Rocktop brings the power of AI to the Bron value promise by automating the streaming, updating, management and actionability of data flowing in from 35,000 different municipalities. On the service delivery side, our portfolio surveillance and diligence solutions are already helping to scale up Bron’s vacant property identification and remediation solution — particularly timely given the anticipated spike in default activity in 2026.
Going hand-in-hand with the vacant property and REO solution, Rocktop also brings the same scalability and efficiency to Bron’s Utility and HOA invoice remediation processes; again, saving servicers thousands in fines and fees while helping to ensure property marketability.
Our Bron partnership, which we’re announcing today, is just the latest in a series of default-related solutions aimed at cutting the operational costs of managing these files through to reperformance or sale. Learn more from Mike McClelland, our COO, at mmcclelland@rocktop.io.
Next up? Keep an eye out for a new blog on how we’re driving unnecessary costs out of default title!
