LVG Press Release
FOR IMMEDIATE RELEASE
Loan Value Group Comments on the Mortgage Industry’s Continued Problem of High ‘Re-Default’ Rates on HAMP Loan Modifications
Completing a modification is only half the battle – ‘continued borrower connectivity’ is critical in helping to keep distressed homeowners current
Rumson, NJ, August 8, 2013 – With re-default rates on the Home Affordable Modification Program (HAMP) approaching 28%, according to a new federal government report, Frank Pallotta, Managing Partner of Loan Value Group, LLC, says that a long-term solution will have to come from an entirely new approach by the mortgage industry.
“It is not enough to simply offer a modification to a troubled homeowner.” said Pallotta. “The key to long-term mortgage relief is the servicer’s ability to establish and maintain a relationship with the borrower over the life of the loan that goes beyond a simple monthly statement. The borrower’s capacity to perform in accordance with a mortgage modification agreement is directly proportional to their ability to be able to seek and receive assistance as needed.”
Traditional mortgage servicing and loss mitigation models have historically been reactive – even when the loan is considered high risk. LVG currently administers a variety of private label programs designed to maintain a 24/7 connection to consumers that ensures both borrower and servicer needs are being met.
Pallotta noted that in stark contrast to HAMP re-default rates, which have run as high as 43% for certain vintages, borrowers who were enrolled in LVG’s connectivity programs during, or shortly after receiving, a modification have experienced re-default rates of less than 3% after more than 12 months. Other notable performance measures stemming from LVG’s loyalty and affinity programs are dramatically reduced short sale timelines, lower delinquency & servicing advance rates, and higher borrower retention rates. LVG’s turnkey programs provide servicers and lenders of any size with the immediate ability to reach their consumers in a fashion that will quickly improve portfolio performance, borrower satisfaction, and overall profitability.
“We will continue to see the trend of high re-default rates for the foreseeable future, unless the mortgage industry begins to explore proactive strategies that continually assess and re-assess the needs of all borrowers throughout the life of the mortgage,” said Pallotta.
About Loan Value Group LLC
Founded in 2008, Loan Value Group, LLC is a large scale, turn-key provider of private label, residential mortgage incentive strategies that positively influence consumer payment behavior on behalf of residential mortgage risk owners and servicers. Based in Rumson, New Jersey, LVG is the creator and exclusive provider of the Responsible Homeowner Reward® program, named one of the "50 Best Inventions" by TIME Magazine.
