Helping Homeowners Get Lower Mortgage Payments

With unemployment rates remaining at high levels and foreclosures continuing to be a prominent problem nationwide, real estate analysts have suggested that borrowers should consider a loan modification to prevent them from losing their property.

Tools have been created that help streamline the loan modification process to assist distressed homeowners receive quicker approval from a servicer regarding reducing their monthly mortgage payments.  

Hope Now Alliance has developed a web-based tool called Hope Loanport that is used by HUD certified counselors and state housing financing agencies on behalf of homeowners to submit their application to a servicer.

Since Q1 2010 when the porthole had six servicers in nine metropolitan cities registered to use the product, there are currently 14 servicers using the solution nationwide. This number represents over 80% of all loans serviced throughout the country, said Larry Gilmore, president and CEO of Hope Loanport. 

The mortgage servicers who are now utilizing Hope Loanport include JP Morgan Chase, Citi Mortgage, American Home Mortgage Servicing, SunTrust Mortgage, Wells Fargo Home Mortgage, Ocwen Loan Servicing, Saxon Mortgage Services, Bank of America, Bayview Loan Servicing, OneWest Bank, PNC Mortgage, GMAC, Nationstar and MetLife Home Loans.

In addition to these servicers, there are also 2,400 counselors from approximately 600 HUD certified organizations who can submit a loan modification case at any time through the web-based system. Financing agencies in Arizona, Maryland, North Carolina and Ohio also are authorized to transmit completed applications through the system to mortgage companies on behalf of at-risk homeowners who are facing foreclosure.

“The options we have for a borrower is a huge benefit because one of the biggest challenges during the loan modification process is the ability to communicate with a servicer,” Gilmore said. “With our system, there is ongoing communication and status updates between the borrower and our counselors and state agencies to inform the borrower about what is happening with their case.”

Gilmore said out of the 25,000 applications currently in the modification porthole, approximately 16,000 are pushed to servicers for them to make a decision. He said by using this system, the full modification process takes about 33 to 34 days. He added that not one document has ever been lost through the web-based system since its inception.

“Hope Loanport is being used primarily as a secure medium to provide a borrower with a standardized application and push this to an entity, whether it is state housing financing agency or an actual servicer, ensuring that no documents are lost and used to make the overall process more efficient,” Gilmore told this publication.

All applications on the porthole system are date stamped to track when the claim was formed, when servicers received the application and any problems that occurred during the process. This time tracking mechanism provides “more transparency to the application process so there is no confusion as to what is exactly needed to provide the servicer an actionable file to determine if the borrower qualifies for assistance or can receive a modification,” Gilmore said.

There is no fee for a borrower to submit a loan modification application to a servicer through this third party agent. A borrower can find the closest counselor or state agency near their home by visiting the Hope Loanport website.

Another free web-based loan modification tool that was recently launched to assist distressed homeowners is Modassist.

This tool allows a borrower to fill out modification documents in less than an hour and then submit the application to a loan specialist who will review the paperwork to make sure it is accurate. The specialist will also attach additional information to ensure the banks look at a fully completed claim so it can go straight to an underwriter for approval.

“Modassist will open the lines of communication between a borrower and a bank because the application was submitted to them with completed paperwork,” said Maz Badie, the creator of Modassist who has 14 years in the real estate industry focusing on foreclosure prevention. “Most of the times a package sent by a homeowner to a bank has incomplete paperwork, but that will not happen if a borrower uses Modassist.”

With Modassist, the entire modification process from when an application is completed by the borrower all the way through the bank responding to the claim takes about 30 days, Badie said.

“We want to work with the bank by keeping people in their homes and prevent foreclosures,” Badie said. “The process moves relatively quickly once it starts.”

Badie said the most important aspect for any borrower is to make sure the paperwork is 100% accurate before submitting it to a Modassist loan specialist. Any mistakes made in this process can “delay the loan modification and reduce your chances of approval,” he said.

Modassist will notify a borrower through e-mail when a completed packet is received. It will also follow up to confirm that a loan specialist has verified the application and processed the paperwork with the borrower's lender. The borrower will then obtain the bank's contact information, the date the application was first submitted and a log to keep track of statuses throughout the modification process.       

Badie said Modassist's loan specialists have helped thousands of homeowners through this process and they want to continue assisting homeowners who are currently facing economic hardships.

“The market was initially flooded with modification scams and now it has become so regulated that no professional wants to do them anymore. In several cases, the party working on modifying the loan only cared about modifying the loan to any rate and payment, as long as they get their compensation for doing the work; that is a big problem,” Badie said. “The calculations need to be correct so the struggling homeowner can get an affordable rate and payment, ensuring that they won't default again on their mortgage six months down the road.”