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Automating Loan Mods to Help Distressed Homeowners
By Anthony Garritano
MINNEAPOLIS-Given the overwhelming foreclosure issue, lenders need to get the paper out of the process, keep compliant and try to ensure homeowners get a fair shake.
In order to accomplish this goal, LoanResolve.com, which helps distressed homeowners avoid foreclosures by working within their lenders' loan resolution programs, has partnered with Wolters Kluwer Financial Services, a regulatory compliance provider, to quickly implement loan modification document solutions that ensure compliance with lender requirements.
LoanResolve offers borrowers an online tool that helps them proactively research ways to resolve a delinquent or potentially delinquent loan with their lender. Based on information the borrower provides concerning their loan and their lender's available resolution options, LoanResolve assists the borrower and lender in agreeing to new terms.
In the case of a loan modification, LoanResolve can quickly produce the needed documents to meet lender requirements through Wolters Kluwer Financial Services' Desert Document Services platform.
"I met Wolters Kluwer at MBA in Boston last year," noted Jim McArthur, president of LoanResolve.com. "We were looking to do some work with Adobe and they referred us to WKFS to do the compliance. We began to speak of what we deliver to homeowners in default.
"From the servicer side we're a Web-based solution. One of the biggest plays is to increase contact with the borrower. So, we offer a single access point through the Web so they send us a dataset, create a user ID, and we send out a mailer based on the dataset. We send out a complete education piece with a DVD package that gives them their access code to get them to a secure website where all the data is pre-populated for the borrower to review as well.
"From there, we send the data to WKFS, they build the document set and transfer that back to us so they're available for print or download via our site," said Mr. McArthur. "From there the borrower is notified and if the investors allows, we can allow the borrower to e-sign and e-delivery."
"We've been looking at this technology to leverage what we do today to move into any area that has got a lot of exposure, like foreclosures," added Jason Marx, vice president and general manager, mortgage, Wolters Kluwer. "We see this as a way to support lenders and investors, and help borrowers at the same time. This has resulted in standard docs to support the borrower to avoid foreclosures.
"All the servicers say they need to do loan mods but they haven't clearly defined what they need to do. In that vein what we've developed from a content standpoint is that we've created standard loan modifications and packages to meet individual servicer's needs. This was a great fit because LoanResolve serves a lot of servicers, so they can provide this to their clients."
Wolters Kluwer offers lenders and servicers a standard, yet customizable set of loan modification documents and packages compliant with investor requirements. The company's change management capabilities ensure rapid implementation of any new or updated document requirements that may stem from investors or potential regulations.
In addition, Wolters Kluwer can provide secure electronic delivery of completed document packages to borrowers and all other involved parties. This secure electronic delivery option allows the lender or servicer to send and receive electronic messages and can provide e-sign capabilities for the borrower's acceptance of the loan modification.
"We've taken the compliance expertise, combined that with our change management features and combined SDX to take this across our different platforms," said Mr. Marx. "I'm now looking into how servicers handle refinances through FHA and conforming products. As you know, they're not originators and don't have the loan officers to be an originator, but they're find themselves in that position."
"In terms of serving our servicer clients, we'll use this same piece for loss mitigation," said Mr. McArthur. "We have the capability, to when a customer is in default, shorten the short-sale process to just a few days from a few months. The new borrower can also click to get financing on the REO and default property in question. So, we'll help them originate, too. Those docs also require loan mods so we'll leverage this partnership there."
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