One of the reasons that mortgage brokers were so important (and will be again, in my opinion) is that when people engage in a transaction as large as a home mortgage, they like to do it face to face. That forced national lenders to recruit, train and manage large third party origination networks to sit down with prospective borrowers and walk them quickly through the process. Some would argue that wholesale lenders fell down on the management part, but I'm pretty sure they got exactly what they wanted out of those professionals and then sacrificed them when the game was up, but that's another column.
People just respond better to face-to-face interaction, especially when it involves major commitments. That's one of the reasons combat servicers like Franklin Credit Management
are so successful. The company's door knock service puts registered credit counselors right in the face of borrowers who think they are out of options and surprisingly good things happen—for borrowers and investors. (Disclosure: I've been paid to write about Franklin in the past, which is why I know so much about what they do).
Some legislators are beginning to realize that if they really want to help lenders they're going to have to get someone across the table from them to work this out. Consequently, we're seeing more states around the country start to mandate mediation before the foreclosure process can be completed. I'm not sure how well this will work, but servicers can't waste time wondering about efficacy; they have to comply. They are already stretched to the limit with everything else they're doing for loss mitigation, so it appears that this is just more pain for them. But perhaps not.
A company in Florida has found a way to multiply its mediation staff through the power of video.
“Mandated mediation is a tremendous burden and can really slow down the process, which hurts everyone,” said Joseph Cvelbar, a counselor with Consolidated Credit Counseling Services in Fort Lauderdale, Florida. “We've tested video on our website and people use it. Now, we can introduce our clients to the mediation process anytime, day or night. That really speeds up the process.”
Consolidated works with consumer and mortgage loan servicers to help get borrowers back on track. The company provides a range of counseling services, some of which employ web-based video. The company went live with its mediation videos yesterday.
To power its those videos, Consolidated is working with Financial Literacy Solutions
, Plantation, Fla. The company, which was started by mortgage industry veterans Robert Sullivan and Garth Graham, provides Internet video learning solutions targeted to the Financial Services Industry.
The FLS flagship product is the “Interactive Video Solution” (IVS) which allows companies to quickly deploy up to the minute educational video information to its customers through their existing website. Completely branded and customized solutions can be deployed in days, allowing FLS clients the ability to better educate their customers through the Internet.
Consolidated is betting that video will speed up this process, allowing it to help more consumers, which will also benefit mortgage loan servicers. If the company is right, it could mean that video is an adequate replacement for face-to-face interaction for consumers involved in large transactions, and that could change the future for the next wave of third-party mortgage loan originators.
Rick Grant is veteran journalist covering mortgage technology and the financial industry.
Follow him on Twitter: @NYRickGrant