Daily Briefing Weekend Edition

Helping to Stop Foreclosures

By Amilda Dymi

A pair of mortgage insurers are becoming more actively involved in efforts to help homeowners avoid foreclosure through private and public partnerships.

Radian Guaranty, Philadelphia, recently joined the Hope Now alliance as a member. It is pledging to assist homeowners at risk of foreclosure or facing mortgage payment increases due to adjustable-rate loan resets without using taxpayer subsidies or government mandates, the company said. "Hope Now represents a proactive effort across the mortgage industry to work together to help keep families in their homes," said Cam Melchiorre, Radian's senior vice president of loss management, who also serves as co-chair of the Hope Now technology committee. "There is an obvious sense of urgency to help homeowners today. Our participation represents both an opportunity to partner with other servicers and to help ensure constant and consistent communications with homeowners facing a difficult financial situation."

PMI Mortgage Insurance, Walnut Creek, Calif. also has been searching for effective homeownership preservation partnerships.

It partnered with Denver-based LenderLive Network Inc., a business process outsourcing and technology company, vowing to provide workout solutions to delinquent or at risk of foreclosure homeowners. "It's easier to develop workout programs for borrowers who are in trouble if you can address the problems with their mortgages before they start to miss payments," said PMI vice president of homeownership preservation initiatives, John Jelavich. "PMI is committed to the preservation of homeownership, and we eagerly pursue opportunities to prevent delinquencies and foreclosures through early intervention services such as LenderLive's EarlyAction program."

According to LenderLive, the partnership is based on extended communication and exchange of data between LenderLive, PMI and the servicers who service the loans insured by PMI, to identify borrowers who are more likely to default on their mortgages and face foreclosure.

The joint initiative offers borrowers both counseling and loss mitigation through the EarlyAction program, designed particularly for the company's specialty origination channel. It assists counseling services in their loss mitigation and portfolio retention efforts. LenderLive executives maintain, "Together, LenderLive and PMI can have more opportunities to keep borrowers in their homes through the early intervention services provided with EarlyAction."

LenderLive said that besides the benefit of its preventive approach, the new partnership allows for outsourcing as a solution to ease the high demand of servicing such poor performing loans in today's market.

LenderLive said its EarlyAction program is the company's specialty origination channel operated by well-trained personnel who contact borrowers to determine the level of risk of prepayments or defaults, complete full financial assessments and qualify homeowners into alternative loan products or loan modifications, as determined by the client. "We respect the role PMI has in the industry," said LenderLive president and chief executive, Rick Seehausen. "We believe this relationship will help each company provide the services their constituencies need."