First American Sub Rolls Out Loss Mit Outsourcing

First American Loan Production Solutions, one of a seemingly endless stream of subsidiaries of the First American Corporation (FAF: 32.41 -0.77%), said earlier this week that it had expanded its borrower identification data and workout options and launched a complete loan modification solution for strapped servicers struggling to manage an influx of troubled borrowers.

The new offering from the company combines credit scoring, valuation services, risk modeling, scoring, document preparation and document recording to identify borrowers who are most at-risk of foreclosure. Based on this information, borrower refinance and workout options are presented and documents required to complete the loan modification process may be efficiently created and recorded; company executives told HW they had set out to create a “single, complete loan modification cycle solution” for servicers.

“Mortgage delinquencies and the percentage of loans in foreclosure nationwide are currently at a 29-year high according to a recent estimate by the Mortgage Bankers Association,” said Randy Gilster, president of First American Loan Production Solutions.

In a press statement, the company said its solution enables servicers to proactively monitor their portfolio and pinpoint loans that are at-risk of foreclosure so preemptive loss mitigation steps can be taken. Identified loans are monitored, analyzed and then slotted into alternative qualifying programs, such as a reverse mortgage or refinance. Servicers are able to choose the end-to-end solution or select individual components such as at-risk alerts, agency and proprietary documents, vetting and prioritization of borrowers for different programs, e-presentation and signing and recording.

First American also said that it had made the solution is available to HOPE NOW, an alliance of various mortgage market groups that aid distressed homeowners, which estimates that of the 718,000 subprime adjustable-rate mortgage loans scheduled to reset between January and May 2008, only 5.3 percent have been modified.

“Meanwhile, additional borrowers are falling behind as a result of ARM resets, declining home values and rising energy costs,” said Gilster. “Servicers need assistance immediately.”

For more information, visit http://www.loanproductionsolutions.com.

Disclosure: The author held no positions in FAF when this story was published; other indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.