In the report, they recommended that REO firms consider changing their metrics for measuring success to include a “mission focus.” This would result in more comprehensive tracking of operations and performance metrics in order to better ensure that REO firms are conducting business responsibly and ethically.
At present, REO firms largely measure success using financial metrics such as profits and return on investment (ROI). The GAO argued that this approach may not be sufficient to identify ethical problems or to ensure that the firms are being held accountable for their actions. They proposed that REO firms should incorporate mission-focused metrics into their tracking methods in order to better evaluate their performance in terms of how well they are doing in terms of social goals and initiatives.
In response to the GAO's suggestion, many REO firms have already started to change their metrics to include mission-focused measures. This includes creating tracking systems that better monitor the progress made on key social initiatives including foreclosure prevention, mortgage modifications, and neighborhood stabilization efforts. These tracking systems provide more comprehensive data on the successes and failures of REO firms, which can then be used to identify areas where improvements can be made.
REO firms have also stated that they will be taking additional steps to ensure that any social initiatives undertaken are compliant with all applicable laws and regulations. This includes ensuring that all activities are consistent with fair housing and civil rights laws, while also promoting the responsible disposal of REO properties in order to protect the public from potential hazards and environmental contamination.
By taking the GAO's recommendations to heart, REO firms are hoping not only to improve their operations and performance metrics but also to demonstrate their commitment to responsible lending practices. The shift to mission-focused metrics provides a way for REO firms to track key initiatives and measure their success in achieving these goals, giving consumers a better understanding of the firm’s commitment to social responsibility.
In summary, the Government Accountability Office (GAO) recently released a report recommending that Realty Owned (REO) firms consider changing their metrics for measuring success from financial metrics such as profits and return on investment (ROI) to those that focus on mission-focused metrics. This would involve creating tracking systems that better monitor the progress made on key social initiatives including foreclosure prevention, mortgage modifications, and neighborhood stabilization efforts. As a result, many REO firms have started to change their metrics to include mission-focused measures in order to better evaluate their performance in terms of how well they are doing in terms of social goals and initiatives. Additionally, the firms have committed to ensuring that any social initiatives undertaken are compliant with all applicable laws and regulations. By reevaluating their metrics and making this shift to mission-focused measures, REO firms hope to not only improve their operations and performance but also to demonstrate their commitment to responsible lending practices.
This article was contributed on Nov 20, 2023
