As consumers look for ways to navigate the protracted U.S. economic downturn, they will increasingly turn to nonprofit counseling agencies for advice and assistance in connecting and working with their mortgage servicers to prevent the loss of their homes.
This trend will pick up even more steam as the deadline for consumers to file a claim under the national mortgage settlement draws closer.
As counseling agencies deploy advanced technologies to support their operations and leverage standard transaction utilities, the default resolution process has become more streamlined and transparent.
These factors make it worthwhile for servicers to understand the growing importance of nonprofit organizations in the default resolution process. By working with nonprofit counseling agencies, servicers gain access to motivated homeowners who might not come directly to them. Counseling agencies understand how to reach out to homeowners and are able to determine what method of interaction is best for each (individual solicitations, websites, church and other community groups, even social media).
As a result, these borrowers find working with a counselor less intimidating, and they are more comfortable exploring solutions to their entire financial picture, rather than just their real estate-related debt. Therefore, these solutions can be more effective for both the servicer and the borrower.
Furthermore, as counseling services become more prolific, their transaction volumes have increased dramatically, enabling them to invest in their operational infrastructure.
In fact, many counseling agencies are now leveraging systems that not only help them establish lines of communication, but enable them to better manage business rules, documents and data.
Through the use of this technology, counselors are able to more efficiently and effectively manage their cases and become valuable partners as they accelerate the default resolution process and reduce delinquencies overall.
Finally, with growing transaction volumes, counselors increasingly use technology portals such as the Hope LoanPort to facilitate and standardize communications and data transmissions relating to default resolutions. In fact, because it is specifically referenced in the NMS, HLP has emerged as an industry utility, and several of the country’s largest servicers, including Bank of America, Wells Fargo Home Mortgage, PNC and SunTrust, are already members.
As a result, these servicers can interact electronically with counselors on default resolution transactions and in a manner that is compliant with the NMS—thereby providing a rare degree of comfort in our uncertain regulatory environment.
Despite the perspective of some mortgage professionals, nonprofit counselors are not their enemies. Rather, developing strong working relationships with these and other non-profit consumer interest groups is imperative to effective default resolution in today’s business environment.
Furthermore, the collective use of technology that creates instantaneous communication and transaction standardization eliminates compliance issues that result from misperceptions and miscommunication. The resulting transparency enables trust and allows the smooth flow of credit.
The result: new, performing assets and borrowers in appreciating homes. This is good for everyone.