Keeping the American Dream Alive

Counseling Portal Brings Borrowers and Lenders Together

 

Millions of Americans are falling behind on mortgage payments and spinning toward foreclosure. Predatory lending, layoffs and mounting medical bills are among the common causes turning the American Dream — with homeownership as its foundation — into a nightmare.

 

While the federal government has responded — billions in "bail outs" designed to stabilize financial markets have been approved — most Americans remain skeptical of how any of it will help them.

Fortunately, more is being done. The U.S. Department of Treasury and U.S. Department of Housing and Urban Development are increasing efforts to reach out to homeowners in distress. And some banks are partnering with IT service providers like CSC to give borrowers a life raft through innovative technology.

There's HOPE

HOPE NOW is an alliance among counselors, servicers, investors and other mortgage market participants. With members like Wells Fargo, CSC is supporting the alliance and developing technology solutions, such as the EarlyResolution Counseling Portal, a national service designed to help non-profit credit counselors reduce mortgage foreclosures.

"This is a unique cohesive effort between non-profit counseling groups and mortgage servicers who are aligned to preserve home ownership," says Ed Delgado, Wells Fargo Home Mortgage senior vice president and HOPE NOW Alliance Technology Committee chair. "With CSC's help, HOPE NOW is providing a scalable, national solution to help stabilize the housing market."

"Together with the alliance and other broader outreach programs sponsored by the federal government, borrowers are increasingly being made aware that it is OK for them to call the servicer. The goal is to educate people about their options before filing for bankruptcy or facing a foreclosure," says Kevin Schlumpf, CSC managing director of EarlyResolution.

A portal for help

Funded in part by Wells Fargo, Bank of America and PMI Corporation, our counseling portal creates a bridge between the servicer and non-profit counseling agency. It gives a servicer-approved non-profit counselor the ability to conduct an interview session that ultimately determines a potential workout option — all using servicer — approved rules. The counseling portal returns all data created during the communication back to the servicer's system in real time for final workout processing

The results to date are positive. Loan workout processing times are reduced because multiple parties are working on a common platform. Further, borrowers who are more comfortable dealing with a non-profit entity instead of their mortgage company can receive the right assistance at the right time.

On the Wells Fargo Web site, after successful security authorization, a borrower may enter the portal to start curing their delinquency online as well as check on the status of workouts currently in the loss mitigation process. Once fully operational, the highly configurable system will arm borrowers with a broader set of workout-related capabilities. These include the ability to send and receive secure messages and transfer electronic documents and signatures.

"About 30 percent of servicer inbound calls are borrowers seeking status updates on loans that are being modified," says Schlumpf. "The servicers can't handle the loss mitigation processing volume alone, much less the increase in inbound calls. We're positioning this tool as a way to free up substantial resource power so banks can work through this back log."

With the portal, mortgage servicers will be able to make loan data readily accessible to participating credit counselors. Counselors can then complete their debt management sessions, after considering the mortgage contract and all secured and unsecured debt, and return workout recommendations to the servicer.

With these automated capabilities, counselors will be able to handle a higher volume of inquiries and reduce training time and costs. The technology will also streamline loss mitigation referrals to servicers by recommending workout options for delinquent borrowers that are consistent with servicer guidelines and in compliance with investor rules.

Solutions for homeowners

The leading nonprofit credit counseling agency utilizing the portal is Consumer Credit Counseling Service (CCCS) of Greater Atlanta, a national organization that provides foreclosure prevention counseling to people in all 50 states.

Since early 2008, CCCS of Greater Atlanta's counselors have been working with delinquent homeowners who are customers of Wells Fargo and Bank of America to provide potential workout solutions utilizing the portal. Just recently, Countrywide also began allowing its mortgage customers to take advantage of the counseling portal.

"The portal has the potential to significantly speed up loan modifications," says Suzanne Boas, president of CCCS of Greater Atlanta. "The software benefits everyone. It makes it easier for both counselors and mortgage servicers to provide solutions for homeowners and stave off foreclosures."