Using Technology to Automate Loan Workouts

Realizing the need to handle a record number of loan workouts, servicers are turning to technology to help the situation. For example, Residential Credit Solutions Inc., a Fort Worth, Texas-based mortgage servicing company, has implemented Overture Technologies' Mozart for Special Servicing to increase the productivity of its efforts to quickly and accurately identify the optimal workout solutions for borrowers.

RCS, a Standard & Poor's "Select Servicer" of residential loans, including subprime mortgages identified the need to automate underwriting support for home retention strategies, including refinance and loan modification alternatives that require qualification of the borrower. RCS worked closely with Overture to customize the decisioning technology using its proprietary market information, loss mitigation strategies and business processes. RCS will use the customized version of Mozart for Special Servicing to support its efforts to keep borrowers in their homes.

Founded in 2006 in anticipation of the current mortgage crisis, Residential Credit Solutions is a fully licensed, integrated mortgage investment and servicing company focused on providing investment capital, servicing capacity and loss mitigation expertise to credit-sensitive, servicing-intensive residential mortgage assets. RCS utilizes its servicing platform to deliver loss mitigation solutions for delinquent and at-risk borrowers. "Overture's special servicing technology will improve our productivity by allowing us to more quickly evaluate loss mitigation options for delinquent and at-risk borrowers," said Dennis Stowe, president of RCS in a prepared statement. "Each distressed borrower's situation is unique and a variety of factors must be considered to develop the appropriate loss mitigation strategy, Mr. Stowe explained. "By automating a segment of the decisioning process, the Overture solution allows us to be more responsive to the borrowers and keep more people in their homes."

Overture Technologies is a provider of decisioning solutions for transparent, consistent and responsive lending processes. Mozart for Special Servicing is an automated decisioning system for servicing distressed mortgage assets, using proprietary analytics to get borrowers into the right option the first time by using the most current, relevant data and information about the borrower, the property and the loan.

"Getting the borrower into the right option the first time is very important in saving these loans from foreclosure," said Linda Simmons, Overture's general manager for mortgage finance solutions. "Finding the right modification or other alternative used to be a long, laborious process, causing many loans to be lost before a solution could be agreed upon. Today, servicers can leverage Overture's automated decisioning approach to assess borrower loan, credit and property information against a full array of workout options in microseconds, heightening the ability to make loan modifications effective and lasting.

"Mozart for Special Servicing allows servicers to manage and successfully apply a more robust set of alternatives for borrowers in distressed mortgages in minutes, and while the borrower is still on the phone, the servicing associate can offer a modification that makes sense for both parties, one that can vastly reduce the chances of re-default and will preserve the value of the mortgage asset," she concluded.