In the last few years on Long Island, so many troubled borrowers and housing counselors have torn their hair out over one thing in battling for loan modifications -- the lender says it doesn’t have the homeowners’ paperwork.
So they send the documents again. The lender says the same thing again.
So goes the cycle.
But now a fix has been offered up by the Hope Now alliance of nonprofit housing counselors approved by the U.S. Department of Housing and Urban Development, lenders, trade groups and others related to the mortgage industry.
It’s a Web portal that allows the housing counselors to submit a homeowner’s application for the federal loan modification program directly to the lender or servicer. Any supporting documents, such as tax returns or hardship letters, can be scanned online into the file. Both the servicer or lender and the nonprofit can view the files.
The system, called Hope LoanPort, helps cuts down on lost paperwork, tracks the progress of the loan modification and makes the process more “transparent,” supporters said.
It will let counselors and lenders focus on the loan workout instead of being worked up over sending paperwork, said Larry Gilmore, Hope Now deputy director and chief executive of LoanPort.
“We can see are they getting the package or not?” Gilmore told Newsday recently. “We can see ... where the hold up is and how much time it’s taken.”
That sort of data can be used as leverage to get the cases resolved, he said. Lenders and services are required to update cases in the portal every 10 days, he said, and during the pilot phase of the portal, which ended about a month ago, some homeowners were saved from imminent homelessness.
Having counselors and lenders work from the same system standardizes much of the information needed for loan modification, the deputy director said. One issue is that the nonprofits would have to take current cases and input them into the system, a time-consuming task, he said.
Lenders, servicers and nonprofits have to sign up LoanPort, which is expected to be financially independent one day with fees paid by lenders and servicers.
About 100 offices of nonprofits have signed up so far, Gilmore said, and he expects the number to be 200 in June.