Technology: Key

Technology has long been credited as a key ingredient of the mortgage loan process starting from origination to REO management. So in times when loss mitigation and loan modifications make headlines - and not so much because of what needs to be done but because of concerns about how fast and how efficient loan processing is - again the focus returns on technology. How should the mortgage industry take full advantage of it to fulfill the unprecedented goals set ahead?

The challenge, experts say, is in the details and the fine-tuning of these loan processes, which becomes so much easier when the right tools are used, and also in facing the unprecedented capacity at hand. Fine-tuning may mean using behavior-based tools that help go deeper into a borrower's reasoning. For example, First American Subordinate Lien Outsourcing, Westlake, Texas, favors using a behavior model that measures not only a borrower's ability to repay the mortgage, but also the willingness to repay. Sometimes reasons like unwillingness to change a child's school come first for a family that decides to stay even if they are up to 10% or more "under water."

As mortgage servicers change their way of doing business specialty servicing options such as Residential Credit Solutions Inc., created only three years ago, are successfully assisting their clients. The fact that Fitch Ratings gave the company a primary servicer rating for subprime product appears to be the logical result of RCS' investment in quality technology.

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