SLK Global's Larry Leon on Property Taxes, Tax Services
By MBA Insights Staff
May 19, 2019
Larry Leon is Vice President with SLK Global, Chicago. His financial industry experience include business development, sales, customer relation management, market research and lead generation. Founded in 2001, SLK Global Solutions is a business process transformation enterprise offering technology products for the banking, mortgage lending and insurance industry. It offers origination and servicing support for residential and commercial mortgage lending.
MBA INSIGHTS: What does the six basis point improvement during April in delinquencies on commercial mortgage-backed securities reported by Trepp mean for property taxes?
LARRY LEON, SLK GLOBAL: This improvement comes just one month after the CMBS delinquency rate deteriorated for the first time in five months. So, given this short-term volatility, servicers shouldn't get complacent. They still need to keep an eye out for warning signs and evaluate their portfolios for potential property tax payment defaults.
INSIGHTS: What steps should commercial real estate lenders and default servicers take on their portfolios if delinquencies move higher?
LEON: The first step is to identify which properties in their portfolio are at risk. Next, they should have a system in place to track property tax on their entire loan portfolio. Finally, CRE lenders need to be able to view and analyze reports in real-time with accurate data.
INSIGHTS: What else can CRE lenders and servicers do to mitigate potential delinquencies?
LEON: CRE lenders and servicers should regularly perform a risk analysis of their delinquent loan portfolios to avoid exacerbating delinquencies. They should have tools in place to enable them to proactively manage risk. Excellent communication with borrowers is also key.
INSIGHTS: Why should CRE lenders and default servicers utilize a tax service?
LEON: First, a tax service provider will help limit the liability on a lender's real estate loan portfolio. Also, they will provide important details including upcoming tax due dates, tax payment information and delinquent tax data. In addition, it's more cost effective to use a tax service when you factor in potential missed payments and in-house staffing costs. Another factor to consider is that third-party service providers are experts in understanding local taxing jurisdiction requirements and timelines. Lastly, tax vendors are compliant with all regulatory requirements.
INSIGHTS: What features should prospective customers search for in a real estate tax service?
LEON: In addition to national coverage and real-time property tax data, a tax service should have the right combination of technology and experience. Plus, their service should carry full liability. Other desired features include secured channels for payment processing and orders and automated analytics.
INSIGHTS: What type of tax searches should be handled by property tax service providers?
LEON: Among the searches that should be handled by property tax service providers are property taxes, municipal liens, as well as water/sewer liens and any municipal code violations. In the ideal scenario, real-time property tax certificates should be available. A good provider should also be able to dig up unrecorded municipal liens, water and sewer and code violations, special assessments, utility, and open or expired permits associated with real estate. They should be able to verify tax sale and bankruptcy information as well.
INSIGHTS: Where do you get your property tax data?
LEON: Our property tax information is sourced directly from the taxing authorities.
INSIGHTS: Who are your clients?
LEON: Our services are used by title companies and residential and commercial mortgage lenders such as banks, credit unions and asset management companies, as well as two of the top five commercial and multifamily servicers. We also cater to default servicing companies, real estate investment trusts and attorneys.
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