Vendors Rush to Do Electronic Loan Mods

With the amount of loan modifications expected to continue to rise, servicers are looking to technology to help handle volume. And vendors like Fiserv, SigniaDocs and others are answering that call to action.

Fiserv Inc. has enhanced capabilities to its Home Retention Solutions offering enabling financial institutions to identify and contact troubled borrowers with customized repayment solutions to try to keep them out of foreclosure. In addition, Fiserv is supporting programs such as Fannie Mae's Home Saver Advance Program, which provides an advance to cover past-due mortgage payments in exchange for a separate, unsecured loan, and the newly introduced Streamlined Modification Program, in which borrowers receive reduced interest rates or longer loan terms to make their payments more affordable.

Among the enhancements developed since the initial launch of Home Retention Solutions in June 2008 are "one-touch" customer contact and advanced loss mitigation workflow tools that more fully automate the loan modification process, including secure electronic delivery of modification documents to borrowers with an electronic signature option when available. One-touch contact and the electronic fulfillment of the documents dramatically accelerate the completion of the modification process, even enabling the process to be completed in one phone call with the borrower.

Also, Vantium Capital Inc. has begun offering electronic modifications through its Acqura Loan Services in an effort to improve and accelerate borrower acceptance. The company is using SigniaDoc's SMART Doc technology to prepare and present the e-mods to borrowers with loans that it services for investors and for its own fund. Borrowers are invited to view their loan modification documents online at a secure portion of Acqura's website and review them on a real-time basis with a representative from Acqura's Home Owner Solutions Center. If they agree with the modification, the borrowers can immediately e-sign the documents online in a secure environment. A growing number of investors will now accept e-signed mods, and federal and state courts have also recognized the validity of e-signed documents for loan modifications, the company said. Once the e-mod has been executed, it is electronically delivered to the investor's custodian and then filed in an e-vault.

"As a special servicer, some of our biggest challenges are getting and staying in contact with borrowers and getting them to act before it is too late," said David Vida, president of servicing at Acqura in a prepared statement. "E-mods dramatically reduce the loan modification timeline. We can present the mod to the borrower in a single call, review it with them step-by-step online and then get them to execute it on the spot."