Bank of America Might Outsource Loan Modifications
Washington-Urban Settlement Services of Pittsburgh, a loan modification specialist, is talking to Bank of America and Fannie Mae about possible contracts, according to one executive close to the vendor.
At press time, USS executives Jim Smith and Charles Sanders had not returned telephone calls about the matter. It is unclear how large the contract might be or how many delinquent residential loans could be involved.
"It's a deal where Bank of America and Fannie will use them to perform loan modifications," said the source.
BoA inherited a huge portfolio of delinquent subprime, alt-A and home-equity loans last summer when it bought Countrywide Financial Corp. of Calabasas, Calif.
Little is known about USS, though the company has rented booth space at several mortgage conventions. Its website boasts that it is the "nation's No. 1 supplier of home retention services."
One mortgage banker who inquired about its services said he was quoted a base price of $120 a unit "plus they get a bonus." He called the price cheap but didn't know all the details concerning what services USS performs. "They're heavily automated," he said.
Loan modification specialists are starting to sprout up in the mortgage industry to take advantage of record delinquencies and the political pressure placed on lenders to help save homes from foreclosure.
Some lenders have chosen to work out bad loans in-house while others have hired outsourcing firms.
Last summer, Bank of America announced plans to implement streamlined modifications on its servicing portfolio.