'RediMod' Retools Cross-Sell Technology
Jacksonville, FL-Lender Processing Services, which owns the widely used Mortgage Servicing Package for automation of loan administration, has unveiled a new service to facilitate mass loan modification programs.
RediMod, as it is called by the company, capitalizes on LPS technology designed to support cross-sell initiatives to assess loans at risk of default and design appropriate workout solutions.
LPS says RediMod automates loan eligibility and optimization determinations for loan modifications. LPS offers the program as a "cafeteria style" slate of options, so that mortgage servicers can use all or part of the service. That way servicers with partial workout systems in place can choose to add capabilities from the modular technology.
RediMod is also coordinated with customer contact strategies, including call center partners and other channels. LPS says that the system allows servicers on MSP to assist at-risk borrowers without replacing or upgrading their technology. RediMod assigns each loan in a portfolio a default propensity and loss severity score. Loans that are identified as delinquent or at risk of default then are run through a process that identifies the best workout option based on options set by the servicer or investor, such as loan type and net present value. LPS then creates the appropriate loan modification package, either in paper or electronic document fashion, and delivers it to the borrower. Through strategic partnerships with call center providers and other contact services, LPS then provides customer follow-up to ensure the modifications are fulfilled.
Grace Brasington, executive vice president of strategic consulting services, says that by using RediMod along with process improvement consulting, LPS can allow servicers to better manage an unprecedented volume of workouts.
She said its advantage in developing RediMod was that it was able to capitalize on applications designed to assess borrowers for cross-sell potential, reconfiguring those systems for risk management and assessing the likelihood that a workout will succeed. "What we don't want to do is be in a situation where we provide a modification and it doesn't work," she said.
To determine optimization, RediMod uses data from LPS sources that look at a borrower's entire debt picture, not just their first mortgage debt, so the servicer can see what is happening "across the board" rather than just the first mortgage debt-to-income ratio, Ms. Brasington said. By aggregating things such as home equity, credit card and auto debt into the picture, servicers better understand the borrower. She described one circumstance where a consumer was taking monthly draws on their HELOC account to pay their monthly mortgage bill. While this suggested trouble, the first mortgage holder had no idea that the loan was at risk.
"Most servicers would look at that loan and they wouldn't even know they have an issue, because it's not in default," Ms. Brasington said.