Contact Homeowners Earlier — and Better
It's a common refrain that the only way to get the attention of your mortgage company is to stop sending in your monthly checks. The industry is so busy with homeowners in delinquency that little time is spent trying to prevent that first late payment. Part of the problem again comes back to securitizations: the terms of many servicing agreements say that loan terms can't be changed until a borrower is a certain number of days — like 90 — behind on payment.
There is, though, a growing understanding about how best to communicate with borrowers already late on payments — an implicit acknowledgement that when a loan servicer comes calling, delinquent borrowers often get spooked and don't answer for fear of losing their home. That's why Ocwen has two staff psychologists who help write the scripts work-out specialists use when dealing with borrowers.
IndyMac, which is running an aggressive loan modification campaign while its under the auspices of the FDIC, has seen a 70% response rate to letters that announce "We want to help you stay in your home" and include a new, lower monthly mortgage payment. When the lender has sent out letters asking homeowners to provide financial information to see if they qualify for a fast-track modification, and no new payment amount appears, just 10% have responded. Having learned from that experience, IndyMac is now getting ready to send out its next batch of letters with estimated new mortgage payments, in the hopes that borrowers will respond, even if IndyMac still needs to verify income before locking in the new amount.