IBM Now Offers Loan Modification Support
Armonk, NY-Realizing the need to modify a record number of problem loans and the fact that servicers can't keep up, IBM here has stepped in with a new offering that it hopes will allow mortgage loan servicers to process large volumes of loan modification requests with greater speed, efficiency and accuracy.
IBM's new loan modification offering complements existing processes and programs, enabling loan servicing companies to increase capacity to assist borrowers with loan modification applications without expensive and time-consuming technology upgrades.
"This was a follow-up to our component services approach," said Bruce Jones, vice president in the IBM lender business services group. "We've been studying the industry, talking to clients, talking to the GSEs, etc. Since the announcement of the new program by the Obama administration to keep people in their homes was enacted, volume is coming in.
"Ultimately, the capacity is not there to support this level of activity. We have the capability to support the loan modification service on our platform.
"We can take a feed from the servicing system and offer a few different types of services. We can do some analytics and refresh that borrower information to help find the right program for the borrower, to start. We'd execute the program based on business rules given to us from the client."
A loan modification is a permanent change in one or more of the terms of a loan that allows the loan to be reinstated and results in a payment the borrower can afford. Recent actions by the U.S. government intended to aid challenged homeowners are creating a substantial increase in the volume of loan modification requests.
"We would perform the modification on the Palisades LOS system that we acquired a while back and get the closing documents out and manage the closing in the case of a refinance, as well," added Mr. Jones.
"This is about meeting demand and doing the services with higher quality and more transparency. "The technology platform we offer is scalable and includes imaging capability. We have a technology advantage, we believe. We can also scale the business quickly.
"We've scaled our mortgage business process outsourcing business. In addition, we do BPO on shore, which is a big advantage.
"If we're using taxpayer money to incent servicers and borrowers to do these mods we will be required to do this on shore. We also have expertise in system integration that is a benefit for our customers."
Key elements of IBM's modification offering include a full set of analytics capabilities and tools to analyze borrowers and portfolios to help determine the appropriate option for each borrower's situation.
Alternatively, IBM can work with servicing companies' existing analytics capabilities or preferred third-party analytics providers.
IBM's modification business process outsourcing offering also includes the development and execution of a complete borrower engagement campaign, including mass mailing and telephone outreach designed to educate borrowers on loan modification options.
"Loan servicing companies and investors face complex operational challenges in the area of loan modification, as well as increasing pressures from governments, regulators and unprecedented customer volume," said Eric Ray, general manager, financial services sector, IBM managed business process services.