Real estate analytics company CoreLogic released a new program this week that can predict a borrower’s willingness to continue making mortgage payments, enabling loan servicers to make more informed loss mitigation decisions.
The system, known as WillCap, categorizes borrowers into 22 “clusters,” allowing loan holders to determine how, when, and with whom they should take action to reduce defaults.
Several of the clusters predict candidates that are likely to “ruthlessly default,” despite having the ability to continue making mortgage payments.
WillCap can also pinpoint borrowers who will benefit from a principal balance reduction, and determines the optimal principal reduction amount.
Additionally, it can assess whether a borrower will succeed with a loan modification and refine the terms to minimize re-default.
If it determines the borrower is better off with a short sale, it recommends the optimal price to ensure the property is sold within a specified amount of time on-market.
“WillCap brings objectivity, transparency and predictability to loss mitigation and default management, said George Livermore, group executive for Data and Analytics, CoreLogic.
“Servicers and investors can use this new solution to craft workable distressed loan treatments that can increase loan modification success, while significantly reducing losses.”
With re-default rates on loan modifications as high as 68.7 percent, a program like this certainly seems worthwhile.