Interview: Q&A with Joe Chappell, Executive Vice President of Operations, Covius
Recently, we had the opportunity to chat with Joe Chappell, EVP of Operations at Covius. With their deep connections in the title and default industry, we decided to take advantage of our time with Joe and share some of his insight on the foreclosure industry at large as it stands in 2023.
NetDirector: As a title provider that works with foreclosure attorneys and leading servicers nationwide, how do you see the default landscape for 2023 and beyond?
Joe Chappell: Servicers ask themselves this question every day. For the last three years, COVID-19 forbearance rules have significantly reduced foreclosure activity. Just when it looked as if these rules were about to expire, the CFPB and FHFA said they want servicers to continue to take all possible steps, including offering COVID-era forbearance, to distressed borrowers, whether that distress was due to COVID or not.
As a result, we are seeing servicers take extraordinary measures, including re-modifying existing loan modification terms to prevent consumers from defaulting on their loans and to protect them from foreclosure.
At the same time, some sectors of the economy, like tech and finance, are definitely under pressure, and housing prices are slowing and, in some markets, declining. Does this mean we’re headed for a full-blown recession? At the recent MBA Servicing Conference, our company hosted an event that featured Mark Zandi, Chief Economist at Moody’s. His opinion, shared by some of our servicer clients, is that we’re headed in a “slow-cession”, not a full recession (he put the chance of a recession at 45%).
What might this mean in terms of foreclosures? Mark believes that foreclosure activity could level out at pre-pandemic levels plus a potential 5-10%. This aligns with what our servicer clients are preparing for.
ND: Your firm prepares thousands of property reports and default title policies per month. What are common title issues that create problems for attorneys?
JC: Recently, we had our default title group look at the issues that they cure for some of the nation’s largest servicers. What they are encountering is similar to the issues and frequency of those issues faced by foreclosure attorneys.
Here’s the summary:
| Common Issues | Typically needed to resolve | Percentage |
| Senior Liens | Policy or release | 50% |
| Junior Liens | Payoff or release | 8% |
| Legal Description/Encroachment issues | Survey or easement | 8% |
| Deceased owner | Death Certificate/Probate/Affidavit of Heirship | 7% |
| Gaps in Chain of Title | Owner’s Policy/sometimes loan policy | 5% |
| Gaps in Assignment Chain | Missing Assignments | 5% |
| Marital Status | Divorce Decree or RMA (Request for Mortgage Assistance) | 5% |
| Mobile Homes | Affixation requirements by state and retire MH title | 5% |
| Bankruptcy Issues, Tax Sales, HOA Foreclosures | Order Authorizing DIL (not order of relief form stay- only works on foreclosures)Redemption Payoff or Deed from Tax sale purchaserDeed from HOA | <3% each |
ND: Property reports are all the same, right? Or am I missing something?
JC: Up to a point, that’s the case. But, like everything these days, technology is accelerating the process and enhancing what we deliver. For example, Covius Settlement Solutions is now integrated with Flueid’s Decisioning Engine. This allows us to deliver a property report in as little as 45 seconds rather than the average three days. And we can do this with the majority of property report orders we receive.
Our new analytics also provide a more comprehensive view of the property that evaluates multiple waterfall options from modification, deed in lieu, short sale through foreclosure, to qualify the property. These expanded analytics deliver more insight to our attorney and servicer clients and provide the best alternatives to the consumer.
ND: In your opinion, how can foreclosure attorneys maximize their usage of NetDirector?
JC: NetDirector has always been a critical tool to accelerate the ordering and delivery of critical default products and services, saving attorneys and staffers time and money. In our case, this has primarily involved property reports utilized by captive or servicer-directed title companies requiring default title products and services.
But what users do not always realize is that there are a range of necessary adjacent services that foreclosure attorneys could order and have delivered through the platform. In fact, through Covius’ integrations, an attorney can also order document services, title curative, correct assignment breaks, mail room services and even list a property for auction.
Foreclosure attorneys can save time and enjoy a consistent, standardized experience by finding the right partner(s) and then accessing for multiple services through NetDirector.
