The following is an excerpt from the August edition of Mortgage Technology magazine. To read the full story and much more,
Complaints from consumers, real estate professionals and public officials are rampant—it takes too long to get an answer from servicers and investors on a loan modification application or a short sale offer. Distressed borrowers, as well as potential homebuyers are left in the lurch, fuming. The delays are just one more roadblock in the way of a housing recovery.
It’s not difficult to see why mortgage servicers are finding it difficult to manage the problem. Short sales and foreclosure sales accounted for nearly a third of all existing home sales in August, according to the National Association of Realtors.
The nation’s largest servicers completed more than 780,000 mortgage modifications under the federally incentivized Making Home Affordable Modification Program at the end of July. But that is out of more than 2.5 million eligible delinquent loans, according to the Treasury Department.
And an analysis by ProPublica, a public interest journalism website, found that only 20% of homeowners who applied for HAMP assistance have received a permanent loan modification. According to ProPublica, missing documents were cited in a quarter of applications that were rejected.
Special Servicing Advice
Executives at Wingspan Portfolio Advisors, a “high touch” special servicer that focuses on returning loans to performing status, believe that technology can be used to leverage the expertise of loan modification staff to complete modifications more quickly with fewer compliance problems.
“We don’t automate dialing. We basically have a single point of contact for all our borrowers,” explained E.J. Kite, vice president for information management at Wingspan.
Wingspan uses the Interlinq servicing platform from Harland Financial Solutions, complemented by default management technology from DRI Management Systems. “Those two technologies work extremely well together,” Kite said.
Wingspan also uses technology from IndiSoft for its Web-based portal that allows stakeholders, including borrowers, to see what is happening on a mod.
Going forward, Wingspan executives believe there is an opportunity to help vendors in the field with mobile technology that can be used for inspections and field services related to short sales and REO management. GPS locators on cell phones, for instance, can be employed to make sure contractors, real estate agents and inspectors are looking at the correct property.
“It really enhances the transparency. It’s something everyone has been asking for, for a really long time. Borrowers are complaining about being charged fees for things that never really happened,” said Steve Shiller, vice president of asset management at Wingspan.
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