Credit Counselor: Freddie Mac Hopes to Assist Servicers with Late Payments.(Brief Article)

Among the biggest cost savers of any business is to make sure your customers pay on time. In the case of mortgage servicers, it's especially important now given the current economic times.

An ongoing concern for Freddie Mac, the agency has recently rolled out a new Web-based tool, EarlyResolution, for collectors to use in counseling delinquent borrowers.

The tool is used primarily for borrowers that are 16 to 60 days delinquent, though "you could certainly use this tool anywhere through the process," said Phillip Comeau, Freddie Mac's vice president of servicing and cash management.

Mr. Comeau described that tool, saying, "It's a scripting system that assists the collector to walk through (the counseling process with the borrower) and determine what the issues are, and what opportunities are available to help the borrower given their situation."

More specifically, EarlyResolution provides counselors with direction for a range of re-instatement and workout options including promises to pay, repayment plans, forbearance plans, loan modifications, short payoffs and deeds in lieu of foreclosure.

Wells Fargo Home Mortgage Inc., Des Moines, which could not be reached for comment by press time, is the first servicer to use the tool.

In a statement though, Robert Caruso, the company's senior vice president of loan servicing, said, "As we suspected, EarlyResolution is very effective. In fact, our foreclosure rate has dropped 60% since we started using this technology. It has proven particularly valuable for our first-time homebuyers, who are generally more vulnerable to short-term financial problems."