Home Equity Loan as Loss Mitigation Tool?

First mortgage servicers can add home-equity loans to their loss mitigation toolbox for delinquent borrowers who want to bring their loans current.

A new loss mitigation analysis report from Flueid assesses the borrower’s available equity, property valuation and equity runway to help determine the best solutions to bring a mortgage current, a news release Tuesday said.

Flueid Vice President of Product Priscilla Flake noted in the announcement that the report helps servicers “counsel and advocate for their borrowers.”

On transactions where the borrower wants to be reinstated, the new offering, dubbed ‘Equity Insights,’ enables servicers to analyze whether a refinance, loan modification or HEL is the most viable option, then present it to the borrower.

“When thinking about the loss mitigation life cycle, we recognized a need for a tool to equip servicers with this data early in their process, so they have ‘instant awareness’ on the condition of title when a loan reaches the 30-day delinquency mark,” Peter Bowman, co-founder and CEO of the Austin, Texas-based company, said in the media statement. “By having the title data and intelligence in a contextualized and digestible format, servicers are empowered to counsel the borrower on the most favorable path, saving both parties time, money and even distress caused by a non-performing loan.”