Tech Nonprofit Automates HAMP Mod Apps for Servicers, Counselors

Hope LoanPort, the service provider that connects housing counselors with mortgage servicers to help borrowers apply for mortgage modifications, recently offered journalists a hands-on demonstration of its Web-based software. The Hope LoanPort service is the brainchild of the Hope Now Alliance‘s technology committee. Hope Now is a consortium of servicers, housing counselors, the government-sponsored enterprises (GSEs) and other industry players working to find solutions to the foreclosure and mortgage crisis. Indisoft, a Columbia, Md.-based software developer and information technology (IT) consultancy, supports Hope Now in a variety of ways. It’s a relationship that started when Hope Now launched in October 2007. The company provides various IT services to the group, including hosting its website. When the technology committee was looking for a solution to streamline the process of intaking modification applications, Indisoft pitched the group a version of its RxOffice suite of products. After consulting with servicer members of Hope Now, Indisoft made a private label version of the software and in November, began a pilot project test with a handful of servicers and housing counselors to process applications in the Making Home Affordable Modification Program (HAMP). Hope LoanPort became fully functional in May. There are more than 300 nonprofit counseling agencies — all approved by the Department of Housing and Urban Development (HUD) — that use the service. In addition there are 11 participating servicers, servicers, including OneWest and industry giants Bank of America (BAC) and JPMorgan Chase (JPM) and Citi (C). The servicers fund the program with fees to join the platform, a per-application transaction fee, and an annual subscription fee. Larry Gilmore, the president and CEO of Hope LoanPort, declined to disclose the amounts of those fees, or the cost to launch the service. As HousingWire recently reported, the CEO of another technology vendor, Default Mitigation Management (DMM), claims his firm had a service it offered to Fannie Mae to automate HAMP application processing, but was snubbed in favor of the Indisoft service. DMM’s Joseph Smith said his service was up and running as early as summer 2009, months before the Indisoft pilot program was launched. Hope LoanPort is a taxable nonprofit while its application for 501(c)(3) status is pending. Gilmore, the group’s CEO, is the former deputy director of Hope Now. He defended the use of Indisoft, and told HousingWire it was the only platform that met the specific needs of the Hope Now technology committee, and Hope Now’s servicer and counselor members. Along with DMM, the committee reviewed other developers’ platforms, but continued its relationship with Indisoft because of its emphasis on the counselor/servicer relationship. “RxOffice met all of our needs. We saw other options, no doubt about it, but I don’t know that they completely matched all of what we were looking for,” Gilmore said in an interview with HousingWire. Gilmore added that Fannie Mae was not involved in the selection of Indisoft or the development of Hope LoanPort. The technology committee took the HAMP requirements — public knowledge — and developed the platform from there. It wasn’t until the pilot program began that Fannie Mae officials got to see a demonstration. The Hope LoanPort software addresses many of the issues servicers and housing counselors face in processing HAMP applications. For starters, when a housing counselor helps a borrower submit an application to their servicer, the application cannot be submitted unless all documents are included in the package. In order to turn a trial HAMP workout permanent, the borrower must make three timely monthly mortgage payments. While that’s stopped some borrowers from completing the trial period, a bigger issue servicers face is the logjam created by incomplete application files. The screen shots below show how a housing counselor uses Home LoanPort to create an application (click to expand): “Counselors understand what is needed to get the application done correctly and they can provide servicers a completed package that we can actually work with,” Jeff Jaffee, vice president of consumer and community affairs at the servicing shop Saxon Mortgage, said during a conference call with reporters. Another challenge the counselors face is limited communication with servicers. With LoanPortal, the system can automatically notify counselors when an application is received. In addition, using electronic messaging built into the platform (seen in the shot below), servicers can keep counselors up-to-date on the application status. Servicers have their own version of the portal, where they process applications, make decisions on individual cases and update counselors and borrowers on the case status, as seen in the screen shot below (click to expand): Cam Melchiorre, senior vice president of loss management at mortgage insurer Radian (RDN), said empowering nonprofit housing counselors with Hope LoanPort is a proactive approach in reducing the reach of would-be fraudsters. He chaired the Hope Now technology committee when LoanPort was in development. “There are many charlatans and parasites trying to take advantage of distressed borrowers,” Melchiorre said. “Attorneys general and the Department of Justice do a great job reacting, but counselors and any other stakeholders can use this utility with absolute safety and prevention from unsavory characters trying to take advantage of the situation.” Write to Austin Kilgore.