Default Mitigation Management LLC (DMM), in conjunction with the Mortgage Issues Liaison Committee of the National Association of Chapter Thirteen Trustees (NACTT), with the support of the bankruptcy judges in the pilot areas and others, has developed a loss mitigation Web portal for debtors' counsel/attorneys to submit loss mitigation and modification proposals on behalf of their clients (whether in bankruptcy or not) directly to the loan servicers.
A pilot program was begun on Oct. 10 in the Middle and Western Districts of Tennessee and on Oct. 18 in the Central District of California. Based on the results of the pilot, the system will be going national on Jan. 1, 2009.
The loss mitigation portal provides loan servicers with a borrower's financial information on the loan servicer's forms and authorizes communication, especially if the account is in bankruptcy. The information allows the loan servicer to review the loan for potential loss mitigation options and to communicate directly with the debtor's counsel or borrower (as indicated on the submission). The electronic exchange of information via the portal increases the efficiency and decreases the wait times with which loan servicers can complete their analysis, DMM says. Participating servicers agree to respond to loss mitigation proposals within seven days of a completed request.
"In many cases, the electronic contact we provide facilitates the first active communication between the distressed borrower (or their representative) and the loan servicer," says DMM President and CEO Joseph Smith.
Over 35 loan servicers and over 200 debtors' counsel have been involved in the pilot program to date.