Technology System to Expedite Modifications

REO Alternatives, in partnership with Overture Technologies, Rapid Reporting Verification Co. and SigniaDocs, has launched eMortgage System Processing, a program to offer expedited electronic loan modifications.

ESP accelerates the task of identifying distressed borrowers and placing them into an appropriate loan modification under the Obama administration’s Homeowner Affordability and Stability Plan. The system enables mortgage servicers, lenders and investors to create electronic loan files that eliminate paper-based inefficiencies, increase data transparency and provide added safeguards against mortgage fraud. The program identifies eligible borrowers, performs due diligence, and integrates HASP guidelines with lender and investor programs to quickly create an electronic modification package for each borrower. ESP allows distressed homeowners to execute their approved loan modifications within minutes, in a secure Web environment. Data show that 50% of consumers are able to electronically close their loan the same day and over 80% within two business days.

“Government and financial institutions are simply not using automation to administer these modifications, and pressure is growing for the administration to deliver results,” said Paul Anselmo, president and CEO of REO Alternatives in Dallas. “Every day, more homeowners are falling into arrears or foreclosure, and face delays that only worsen their circumstances. ESP can help homeowners in distress, while greatly reducing the costs involved.”

He says ESP can save an estimated $137 per loan closing compared to typical paper-based processes. “The cost savings and time efficiency of ESP is compelling when multiplied by the estimated 7 million to 9 million distressed loans that the HASP program intends to address — as much as $1.2 billion in savings,” said Mr. Anselmo.

Mortgage servicers have been challenged with a tremendous backlog of foreclosure processing over the last few months, compounded by changes in government regulations. ESP provides full compliance with HUD’s newly revised Real Estate Settlement Procedures Act, and maintains all program guidelines for Fannie Mae, Freddie Mac and Federal Housing Administration loan refinance and modifications.

“We as an industry can no longer afford to rely on manual processes,” said Joe Pensabene, executive vice president at lending partner GMAC. “We have a responsibility to conduct business efficiently, and we want to save as many homeowners as possible from going into foreclosure. ESP allows a lender to serve many more distressed borrowers with existing staff, while saving processing costs, increasing transparency and going green. It’s a win-win for everyone involved — servicers, homeowners, lenders, investors, the government and the environment.”

Steve Horne, CEO of Wingspan Portfolio Advisors, has witnessed the huge efficiencies afforded by electronic processing. "Our company has been using eMortgage System Processing technology for months now, and the results have been a significant improvement in terms of time, cost and the likelihood of completing a successful loan modification. Instead of obtaining a verbal agreement and sending paper documents by courier, we walk the borrower through the process while they are still on the phone. They execute documents securely online within minutes.

“This is a far better process than modifications that are done manually by mail that can take weeks or sometime months to collect all the data, documents and signatures. Meanwhile the clock is ticking and these borrowers need immediate help. This accelerated process would not be possible without e-mortgage technology. ESP is a game-changer. It’s perfect for making HASP work the way our president intends."

ESP uses SMART Doc electronic document technology for all loan closing documents. By combining the document view and data into a single, secure electronic file, systems can automatically verify the document and data, and perform quality control and due diligence checks in near real time. REO Alternatives also plans to address the needs of Hispanic homeowners affected by the housing crisis with a Spanish-language version of the ESP system.