Transparency is not just a mortgage industry buzzword but a necessity in the post-mortgage-bubble world. Over time that will mean that borrowers will be able to access a web portal and be able to see the status of their loan modification, short sale, or foreclosure through their smart phone or tablet.
The aim is to ensure that borrowers always know the status of their transactions and can check whenever they want to monitor the progress. The solution was as innovative as it was surprising given servicers’ often-limited appetite to try something new.
Mortgage servicers agreed to outsource transparency to Hope LoanPort, which has emerged as not only a nifty technology, but an offering with staying power. Moreover, it humbly bills itself as providing borrowers with alternatives to foreclosures, but in reality, it is much more than that.
Think of Hope LoanPort as a neutral industry utility, a Switzerland-type safe haven designed to create transparency for servicers, borrowers, and vendors as well as a creator of standards for data collection that the largest servicers have agreed to accept as gospel. Among the participants are Bank of America, Bayview Loan Servicing, Chase, Citi and Wells Fargo Home Mortgage.
In addition, through a subsidiary, Homeowner Connect, borrowers facing foreclosure can receive free credit counseling from more than 3,000 credit counselors from over 750 agencies across the U.S. that are trained to explain the borrowers choices.
Registered counselors can submit foreclosure alternative applications to about 800 registered mortgage company users, providing a transparent, processing platform. The servicers have agreed to pay the tab for their work.
Prior to the mortgage downturn, the idea of using smartphones or tablets to access accounts would not have stirred the servicing community to action—and would have been met with resistance. Servicers were simply too set in their ways, too slow to react, for them to commit of their own volition to those technological advances without a regulatory fiat—which Washington delivered big time.
So much so, that a failure to react, the idea of standing pat as they would have done in the past, was no longer an option in the face of requirements under the mortgage settlement, the Consumer Financial Protection Agency, and the Borrower’s Bill of Rights makes clear that all parties involved in a mortgage transaction have access to the file and all of them have access to the same information.
Although the lenders have work to do to develop hand-held applications, the Hope LoanPort infrastructure is in place featuring a data repository of record and standards for its collection and dissemination have been agreed upon. At least one member of Hope LoanPort’s senior management team eagerly looks forward to the day when Freddie Mac, Fannie Mae and the industry’s remaining investors are required to offer borrowers the opportunity to use the portal.
While many employees in the mortgage industry are tired of new regulations, the benefits to lenders and the potential for creating at least a modicum of good will from borrowers that otherwise would have been foreclosed upon may just be enough to justify one last regulation.
To be sure, that’s a good start, one many servicers can build on in the future as they develop and deliver technology to make transparency of loan modifications and short sales, a one-click, hand-held reality.
Matt Strickberger is the managing partner of OnPoint PR and Consulting LLC, a public relations firm that represents lenders, servicers, technology companies and others. He was editor of Mortgage Technology magazine from 1997-2000. If you have comments or suggestions for future columns, email him at firstname.lastname@example.org.