Systematic Assessment

In many cases, servicers are simply beginning by attacking their 90- and 60-day delinquent loans, and we are happy to work with this subset. But in many cases, lenders also believe it is prudent to look deeper into their portfolio's risk. Further, consumers express frustration that they need a modification, but do not want to be forced to skip payments in order to obtain one.

The FDIC and Fannie Mae processes call for systematic portfolio review to determine eligible loans. Net Present Value formulas indicate whether a modification is called for -- the basic concept is that if the modification is cheaper than foreclosure, then it should be done. We believe this puts a positive requirement on the servicer to systematically review their portfolio.

Many of our clients have the resources to perform this review on their own, and in these cases, we will work with the data generated from their review. We can also provide review services using a proprietary formula. In either case, we use the review to generate the initial uniform response.

The general approach is to identify three categories of loans, and then follow-up with appropriate, instensive contact.  Further, we can use data gathered during the systematic assessment to adjust our scrips for the particular situation.  For example, during the initial screen, we can gather tax data to flag loans that might not be owner-occupied, but are identified such in the servicers data.  We can then use this information to adjust our script to raise the issue with the borrower, a crucial point since, for example, the FDIC is not proposing to guarantee loan modification for non-owner-occupied loans.

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