Alltel has developed a new line of software designed to save lenders time and money in handling severely delinquent loans.
The software will link lenders with bankruptcy and foreclosure attorneys, the secondary mortgage market, title and escrow companies, and servicers that specialize in delinquent loans.
"This will help lenders manage delinquent loans quicker and cheaper, because everyone will be on the same system," said Bob Hunter, executive vice president at Alltel of Jacksonville, Fla.
Alltel, which provides servicing technology for 18.7 million mortgage loans-about half the market-is testing the new software on one client this month and expects to release it early next year.
"This will bring loss mitigation into the 21st century," said Richard A. Lee, executive vice president of business development at Fairbanks Capital Corp. of Salt Lake City, one of two delinquent-loan specialists on Alltel's software network.
Portfolio managers will be able to monitor activities performed on their assets daily, Mr. Lee said.
"This will give tools to lenders that they haven't had in the past when they choose to outsource this particular special servicing so they can accurately project loss severity," Mr. Lee said.
"What the project means to the marketplace is that we are able to ultimately reduce loss severity," he said.
Special servicing is going to have a more dominant role in the mortgage industry, Mr. Lee said, because firms like his have sharpened their skills and can collect more money for lenders than ever before.
Loans would be automatically transferred to a special servicer after 60 or 90 days of delinquency, said James F. Schneider, director of business development at C-BASS, the other loss mitigation firm on the network.
"This eliminates delay from the previous servicer and us, which brings about a greater amount of resolutions on delinquent loans," he said. "Before, you had to manually key in the data or send a hard copy, and lenders depended on the special servicer to relay back performance activity."