Managing the Work Steps Challenge
Mortgage servicers are addressingcurrent challenges in work steps management through open architecture and transparent technology solutions.
Sanjeev Dahiwadkar, president of IndiSoft of Columbia, Md., whose RxOffice Consumer Credit Counseling software is currently being used by the Hope Now alliance portal and counselors nationwide, says users are looking for technology that provides transparent, real-time communication at the every level and processing architecture that allows users to integrate access to information into their systems. More servicers are counting on default management tools that help mediate the communication between consumers, counseling agencies, mortgage insurers and servicers.
"The biggest trend we are seeing in the market right now is active participation." Lenders, servicers and different stakeholders try to establish direct contact with homeowners early on in the mortgage process, says Dahiwadkar, they have to adopt to today's changing business environment.
"Now, as during 2009, every two weeks we face the demand to change something, some step, in the business process," which keeps generating demand for flexible technology that is inclusive of new regulations and requirements.
Demand is channeled towards inclusive platforms that can accommodate a large variety of procedural workflow and processing tools, such as underwriting and smart document technology-that is completely transparent and customized for the specific needs of borrowers, lenders and investors.
It boils down to creating more efficient work steps.
According to CEO of DepotPoint, Joe Filoseta, work steps management is a critical issue for servicers today.
"Work steps management in this market is even more of an imperative than it's been primarily because most servicing shops are overwhelmed with volume and they have hired an army of relatively inexperienced people whose training time is minimal."
Systems that guide individual employees thorough a process in a manner that provides task and timeline management are critical. "Time is money!" he says, so it is as critical to keep transactions on an asset disposition process more efficient and less costly, whether it is through a short sale or REO sale.
"If a subperforming loan becomes eligible for a modification, short sale or REO sale, the way we underwrite income and the way income is supported on the analysis of a modification has to be re-worked and re-engineered."
The specifics of a particular process determine the success of the overall process.
For example, it is very important, says Filoseta, that the industry looks at borrower income sustainability, rather than the amount. Because while employment history is important, "much like with the analysis of collateral, with employment data past history is not as important for the predictability of the future." For example, one could look forward on whom someone works for, what position they have, how does that compare with such positions in similar companies-in other words, much deeper analytics.
Tools that can predict the economic stability of a company or a particular individual in a company are very valuable technology and may be the next generation of solutions the mortgage industry needs to consider going forward.
Some technology providers are already working to build tools that serve that need, he said. "It certainly seems reasonable for the leaders in fraud prevention and detection market, as well as employment data providers, to engage in that type of research."
The DepotPoint TrackPoint application would welcome the incorporation of that analysis and any other documents that support specialized transactions. As they become available in 2010 and beyond, Filoseta's firm plans to enhance the existing platform with such options.
Examples like the Hope Now LoanPort indicate the industry is more excessively using narrowly specialized tools designed to improve the mortgage servicing processes.
While Maryland is the first state in the nation to publicly endorse the program, currently eight mortgage servicers and over 100 non-profit counseling organizations across the country committed to it. Developed by the HOPE NOW Alliance, HOPE LoanPort streamlines loan modification applications on behalf of borrowers at-risk of foreclosure and allows housing counselors to efficiently transmit to mortgage servicers completed loan modification applications, including those used for the Home Affordable Modification Program. Participants include American Home Mortgage Servicing, Inc., Bayview Loan Servicing, Chase, GMAC, Ocwen, PNC Mortgage, Saxon Mortgage Services and Suntrust Mortgage, Inc.
At a briefing of state housing counselors Maryland Department of Housing and Urban Development Secretary Raymond Skinner sees the new counselor web-based tool as a way to fulfill a market need for improved technology in assisting at-risk homeowners with loan modifications.
"It is discouraging to continually hear that lost paperwork is stalling impending mortgage solutions," he said. "We believe that Hope LoanPort will allow housing counselors across the state to focus on reaching positive outcomes rather than dealing with missing documents. As a state housing finance agency, we also look forward to using HOPE LoanPort as a tool to solve loss mitigation issues with our borrowers."
Another example is Fannie Mae's website for owner-occupants of Fannie-owned homes offers 3.5% in closing costs or an equivalent amount in home appliances for properties listed on HomePath.com by May 1.
The effort aims to attract to the market more qualified buyers and reduce REO inventory, Fannie says. It is an additional incentive to the homebuyer federal tax credit for first-time buyers and other affordable financing options. To that end HomePath Mortgage and HomePath Renovation Mortgage listings also provide a 3% downpayment alternative to qualified borrowers.