New Program Targets Underwater Homeowners

By Mike Colpitts

A new program designed to identify underwater homeowners who may qualify to refinance mortgages has been put into operation by one of the nation’s largest real estate house under foreclosure technology firms. The program targets homeowners who are more likely to walk away from their underwater mortgages.

CoreLogic, which evaluates hundreds of segments of the U.S. housing market, has launched the program to assist lenders to determine mortgage holders who now qualify for the Obama administration’s Home Affordable Refinance Program. The expansion of the program was announced by the U.S. Treasury Department January 27th in an effort to reduce the number of mortgage walk-aways.

The Obama administration’s first portion of its refinance program has been a miserable failure, with just 1.1 million permanent home loan modifications through March, according to the Federal Housing Finance Agency, which oversees the government’s giant mortgage lenders, Freddie Mac and Fannie Mae.

Core Logic’s new analytics program targets more than 2.3 million homeowners with a strong likelihood of qualifying for the program. HARP 2.0 strongly encourages lenders’ to reduce mortgage principal as part of its program, offering 18 to 63 cents on the dollar in tax payer incentives depending upon loan-to-value ratios.

“The new HARP 2.0 guidelines provide a great opportunity for homeowners with negative equity who were previously unable to take advantage of historically low interest rates to refinance their existing mortgages,” said CoreLogic CEO Anand Nallathambi. “It may not be clear to homeowners how HARP 2.0 eligibility requirements apply to their circumstance.”

The research firm uses a list of eligibility criteria, database filters and other techniques to identify likely refinance prospects. Loan-to-value ratios are determined using the company’s automated valuation models. The company re-evaluates eligibility issues on a monthly basis as homeowners eligibility requirements change.

“By utilizing CoreLogic proprietary databases and analytics teams we can provide a targeted and customized list of very high probability HARP 2.0 refinance eligible candidates,” said the firm’s chief data officer Dianna Serio. “Our ability to provide specific homeowner data, highly accurate loan-to-value estimates, identification of lenders, current owner occupancy status and liens associated with a property can be especially helpful to originators looking to build or defend their current portfolio.”