Coronavirus forbearance revives interest in the dormant Hope LoanPort

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The nonprofit that distributed online platform Hope LoanPort wound down operations on Dec. 31, citing the completion of its mission to help distressed borrowers after the Great Recession.

But HLP's software developer, IndiSoft, kept the platform going and now that borrowers are seeking assistance with coronavirus-related hardships, new interest in it is growing.

"When Hope LoanPort closed its doors, nobody thought COVID-19 was going to head this way. That was in December. Nobody saw this coming," said Sanjeev Dahiwadkar, founder of IndiSoft. "Now the problem has become much bigger than in the past crisis. Take unemployment, for example, all the pundits say it’s going to be around 20%, and in the last crisis it was closer to 10%. We are getting a lot of calls as a result."

Sanjeev Dahiwadkar is the founder of IndiSoft.

Current inquiries are primarily related to how IndiSoft's technology, which HLP was a reseller of, can be used to handle forbearance requests through a consumer-facing portion of the portal called The Homeowner Connect. IndiSoft, which rebranded the technology as the Housing Advocacy Platform after HLP shut down, plans to add videoconferencing and chat functions in the next couple weeks.

But the platform's origins as a place where servicers and borrowers can connect to housing agencies and nonprofits also could be attractive — particularly when deferral periods end and consumers must negotiate what could be a more complicated repayment-plan process.

"Right now there may be a limited role for the housing counselors, but things will get complex," Dahiwadkar said.

Dahiwadkar said mortgage servicers have been receptive to the idea of having housing counselors use the software to assist in processing what is likely to be a high volume of loss mitigation.

The Hope Now Alliance, a housing-preservation nonprofit formed in 2007 to address the needs of a distressed mortgage market, originally launched Hope LoanPort using technology IndiSoft provided for a nominal transactional fee to servicers in December 2009.

The nonprofit's decision to shut down Hope LoanPort at the end of December was driven in part by the proliferation of loss-mitigation automation software since the platform’s inception.

Such systems exist more broadly now, but they may not be sufficient for the wave of distress coming. Recent delinquencies have been so low that, before COVID-19 spread in the United States, distressed servicing experts were concerned about the ability to scale up for a market shock.

Hope LoanPort was a "great avenue" for communication related to loss mitigation, but when the nonprofit that ran it shut down in December "it didn't have many loans to go through it," said Faith Schwartz, president of consultancy Housing Finance Strategies. Schwartz co-founded HLP and served as its chairman between January 2010 and December 2017.

Like, Dahiwadkar, Schwartz believes the counselors approved by the Department of Housing and Urban Development that helped facilitate servicer communication with borrowers during the last crisis may have a role to play in this one, too.

Whatever means servicers use to communicate with borrowers about loss mitigation now, her advice based on the last one is to make sure it results in messaging that comes across as clear, constructive and trustworthy to borrowers.

"Be transparent upfront, if you can be, about the path forward," she said. "If everyone's aligned on that, it helps."

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Loss mitigation Servicing Mortgage technology Coronavirus