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One Servicer’s Search for a Needle in a Haystack

UnderwaterThe FHFA’s Principal Reduction Modification program announced in mid-April has the potential to benefit up to 33,000 borrowers nationwide. This number represents a small share of the approximately three million underwater homeowners nationwide, which might make finding borrowers who qualify seem like looking for a needle in a haystack. That is not stopping Ditech Financial and HLP from trying to find eligible borrowers, however.

Ditech Financial, a nonbank mortgage lender and servicer owned by Walter Investment Management, and HLP, a non-profit created in 2009 to help families achieve and sustain homeownership, on Tuesday announced an agreement to implement a borrower outreach effort to identify and assist borrowers who are eligible for the FHFA’s Principal Reduction Modification program.

“We are committed to rolling out FHFA’s Principal Reduction Modification Program to reach and provide personal assistance to eligible homeowners whose loans we service, in an effort to help them avoid foreclosure and stay in their homes,” said David Schneider, President of Ditech. “In keeping with our goal to become a lifelong partner in homeownership, we want to help families and individuals to take advantage of this program when that is the right option for them. HLP’s platform will be an integral part of our effort to reach and assist those who are eligible for the loan forgiveness program.”

The combined outreach effort of Ditech and HLP involves using HLP’s collaborative communication platform to integrate HUD-approved housing counselors with Ditech’s mortgage servicing operations. The integration between HLP’s platform and Ditech’s servicing operations will help HUD’s counselors more easily identify eligible borrowers.

In order to be eligible for the Principal Reduction Modification program, homeowners must meet three requirements:

  • They must be severely delinquent as of March 1, 2016
  • They must currently be severely delinquent on monthly mortgage payments
  • They must have an LTV ratio of at least 115 percent (at least 15 percent underwater).

Mortgage servicers must solicit eligible borrowers for the program no later than October 15, 2016.

“In the past it was operationally prohibitive for residential mortgage servicers to effectively and securely utilize the advocacy world in loss mitigation,” said Cam Melchiorre, CEO of HLP. “HLP’s primary feature has conclusively overcome this process-burden through its centralized, neutral communication hub and its open architecture. This framework enables secure collaboration and rapid deployment of foreclosure relief programs among major stakeholders in the residential mortgage finance industry in fulfillment of HLP’s mission as a social enterprise to assist consumers to obtain and retain homeownership.”

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.
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