Monday, August 18, 2008

As homeowners have battled to keep up with their mortgages, lenders and their call centers have struggled to handle the number of people hoping to bargain for lower interest rates, principal reductions and longer payment plans.

Computer Sciences Corp., which is based in Falls Church and in 2002 started selling software for loan modifications, is rolling out a tool designed to make the process a little easier.

The software, called Borrower Inquiry, lets homeowners who have applied for a loan modification track the status of their requests online. Three major lenders are negotiating contracts to use the software, said Kevin Schlumpf, CSC's managing director of early resolution. He declined to name them or disclose how much they would pay for the service.

Schlumpf compared it to tracking a FedEx package. "To track the package you go to the Web site, click it and see where it is," he said. "This Borrower Inquiry tool lets you do the same thing."

According to Hope Now, the lenders' initiative meant to address the mortgage crisis, lenders processed 181,000 mortgage workouts in June and a total of 522,000 in the second quarter. That's a major uptick from the beginning of the year, and according to industry members, most loan servicers are having trouble handling the workload.

"The current volume of requests that come in are really overburdening the resources that are in place," said Suzanne Boas, president of the Consumer Credit Counseling Service of Greater Atlanta, which does housing counseling across the country and uses CSC software. "So I think everybody throughout the system realizes that technology is a pretty important tool to streamline what has been a pretty cumbersome process."

That overload has been a boon for some of CSC's services. Nine major lenders representing 20 percent of the prime mortgage market now use its core software for loan modifications, the company said. Several lenders, including Wells Fargo and Bank of America, have also started using its counseling portal, which debuted this year and lets credit counselors instantly estimate the terms that borrowers can renegotiate for.

Schlumpf said CSC has several loan modification products in its pipeline.

"About 40 to 50 percent of the loans that go to foreclosure are loans where the borrower and the servicer never talked," Schlumpf said. "While we think we have great tools to help servicers when they talk to the borrower, there is still a huge part of the market that needs our help."

-- Jordan Weissmann