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WKFS Steps Up Loan Mod Work

Wolters Kluwer Financial Services, a provider of compliance and workflow tools, is expanding its services to support loan modification and workouts for the mortgage industry.

In January, the company started working with LoanResolve.com to help lenders and distressed borrowers avoid foreclosure. Under the partnership, Wolters Kluwer will provide regulatory compliance support to LoanResolve, which guides borrowers to potential workout solutions online. In the case of a loan modification, LoanResolve can produce documents to meet lender requirements through Desert Document Services, a Wolters Kluwer platform.

Wolters Kluwer offers servicers a set of standard but customizable loan modification documents and packages that are compliant with investor requirements.

Jason Marx, vice president and general manager at Wolters Kluwer Financial Services, said the company is getting more deeply involved in the loan modification process because of demand in the marketplace.

"Clearly, with what is going on in the marketplace today, there is a need for servicers to deal with the capacity issues they have," he told Mortgage Servicing News.

Wolters Kluwer can help servicers speed up the process by delivering documents immediately, with the capacity for borrowers to use electronic notification and signatures to express consent. And Wolters Kluwer already has deep penetration within the mortgage company. The company's customer base includes 70% of the top mortgage originators and 80% of banks in the U.S. use some Wolters Kluwer product.

Mr. Marx describes Wolters Kluwer's loan modification support as a turnkey solution that supports multiple investor requirements. That helps lenders who have queued up customers who may need loan workout solutions but haven't been able to ramp up their loss mitigation departments fast enough to reach out to them quickly.

"One of the pain points that servicers have today is their ability to get through the volume," Mr. Mark said.

Russell Reserva, senior product manager for mortgage solutions at Wolters Kluwer, said it's "a pretty arduous process" for lenders to ramp up for the growing volume of loan modifications, which require contact with the borrower, negotiations, an agreement, implementation and execution. In addition, documents related to the modification may need to be recorded.

He notes that in negotiating loan modifications, a major concern for servicers is staying within investor guidelines so they don't risk exposure to litigation from investors.

Mr. Reserva said servicers are today segmenting borrowers into several buckets based on investor criteria. Those segments include borrowers who can refinance, those that qualify for "fast track" modifications, those that require additional due diligence, and those that require some other loss mitigation solution than a workout or modification.

Especially with borrowers who require extra due diligence for a loan modification, servicers are well advised to focus on compliance, Mr. Reserva said.

"Nobody wants to be six months or a year down the road and then have problems with that package because they didn't record something," he said. (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/