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Q/A with Keith Murray of VRM Mortgage Services

MBA Staff--Aug. 1, 2014
MBA NewsLink recently posed questions to Keith Murray, founder, president and CEO of VRM Mortgage Services, Carrollton, Texas, a provider of default servicing services to the mortgage industry. VRM recently surpassed 500,000 REO properties listed, managed and sold since the company was founded eight years ago. Murray can be reached at

MBA NEWSLINK: What is the current state of the REO property market?

KEITH MURRAY: We’re seeing the REO market continue to normalize from an overall volume perspective. However, there are still dynamics at work that make this a relatively unique market. Investors continue to play a significant role in REO purchases. But 2012 was dominated by competition among institutional investors buying regional and national pools of single-family properties. Over the past 12 months, the focus has shifted to traditional, local investors. We’re also seeing a careful mix of buy/hold and fix/flip strategies that are being driven by market valuations, both negative and positive.

The other major trend affecting the REO market is restricted lending requirements, which have impacted the availability of financing. This is having a more pronounced effect on first-time homebuyers. Also, cash continues to be the most common source of funding, but there is an additional channel developing with the rise of portfolio purchase financing vehicles.

NEWSLINK: How important is it to get an REO property into the pipeline? What do you do to make that happen?

MURRAY: The importance of getting properties into the pipeline has always been about asset recovery. Speed to market directly impacts the rate of return, so timeframe management has always been the most important component of what we do.

What’s different about today’s timeline management is the need to use multiple layers of analytics to understand the best market approach. Today’s asset managers are creating much more sophisticated marketing strategies with compressed timelines, where things begin to happen within a few days of acquisition. The prior model of “test and adjust” has been replaced with complex data models that evaluate each opportunity based on a number of factors, including current local market activity, anticipated buyer demands, property condition, availability of financing and the property’s prior history. Based on our experience listing, managing and selling over 500,000 REO assets, VRM has a unique perspective into what works best.

As far as how we make it happen, over the years, we’ve developed an extensive network of over 5,000 real estate professionals closely aligned to our goals and those of our clients. Then we manage all work with our proprietary workflow management and compliance solutions, which are designed to ensure consistent, predictable and transparent results. These tools have embedded audit checks that give our clients the assurance that their business rules are being carried out. It’s been our experience that bad design can only yield bad results, so we built our processes and our technology from the ground up rather than inheriting them from someone else.

NEWSLINK: When VRM Mortgage Services began managing assets in 2007, did you anticipate selling more than 500,000 REO properties in just seven years?

MURRAY: I don’t think anyone anticipated the way the real estate and mortgage servicing markets have gone. However, we’ve been very fortunate to have earned the trust of our clients, which has contributed to our dramatic growth. The 500,000 milestone is a reflection of our depth of experience and local market knowledge, which, in my opinion, is unrivaled in our industry. We continue to build upon this success by treating every asset as an opportunity to help improve the communities we serve. We also value our community partnerships and our diverse network of talented vendor partners, and continually acknowledge their contribution to our success.   

NEWSLINK: What kind of partnerships do you have that allow your company to move properties through the pipeline?

MURRAY: From the start, VRM Mortgage Services focused on local businesses that work within the communities we serve. We created a highly diverse network of veteran, disabled, minority and women-owned businesses, taking into account each of these supplier’s unique challenges and needs. Then we empower everyone in the process with technology, training and support to help ensure they’re able to deliver excellent results with maximum efficiency. Diversity and inclusiveness are key. We firmly believe that any successful company must maintain a commitment to these principles and take advantage of the strengths that diversity provides.

NEWSLINK: Is there an endgame? Or will there always be a large enough REO market as a primary or niche business?

MURRAY: We don’t see REOs as an endgame, and never have. I’ve personally seen a number of vendors enter the space because they saw a specific market opportunity. Our mission has always been to provide our clients with exceptional, creative and compliant solutions for whatever challenges they face. Asset management and disposition will always remain a primary service, but just like the mortgage servicing industry is always changing, we’re continually evolving to meet our clients’ needs.

For example, we’ve already expanded our services to include default title and closing, rental management, short sale services, property inspections, and preservation and maintenance services. After seven years of business, and after all the success we’ve had and the growth we’ve experienced, we are still very much an entrepreneurial company. We match our passion for ideas and execution with the passion we have for helping our clients succeed. That’s our primary business.

(The views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor does it connote an endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions; articles and/or Q/A inquiries should be sent to Mike Sorohan, editor, at