As millions of homeowners struggle to make their mortgage payments, a loan modification may be their last option in order to avoid foreclosure. But a successful modification isn’t guaranteed. Out of the 4 million people who have applied for a loan modification since 2010, through the government’s Home Affordable Modification Program, one million of them have been denied for inaccurately filling out the paperwork, according to the U.S. Treasury Department.
Dedicated to fixing the problems in the loan modification industry, Stephfan Nurse, CEO and founder of ConsumerEducationOnline.com, is focused on leveling the playing field by putting the power in the hands of the homeowner, and using education and software to help simplify the modification process.
BLACK ENTERPRISE spoke with Nurse about the problems in the modification industry and how his company has been providing solutions to help homeowners.
BLACK ENTERPRISE: What made you start ConsumerEducationOnline.com?
Nurse: After being in the loan modification industry since its inception, I realized a major problem with the industry where homeowners did not receive accurate and consistent information about modifications. Â It seemed the only information available was surface-level education that only re-directed people to contacting a third party such as bogus credit counseling companies. Â In early 2010, I decided to create a website that guided homeowners throughout the entire process, providing practical education and online tools that they could immediately apply removing all of the jargon and fluff.
What kind of online tools do you provide?
We developed the first and only loan modification pre-qualifier on the Internet. This online tool allows anyone to enter in their financials and know immediately if they qualify for the government’s Home Affordability Modification Program, or the lender’s traditional modification program. The traditional modification is the modification most people get approved for but most people are unaware of its existence.
What were some of the difficulties you encountered when starting your company?
It would have to be distinguishing our company from everyone else in the modification industry. Before recent legal changes, the industry was filled with many opportunists who wanted to take advantage of desperate homeowners. Justifiably, people became skeptical of anyone or anything that had to do with modifications. The Internet was filled with nothing more than capture pages used to gather information so they could resell it back to companies promising modification assistance. Â However, I am confident we have real solutions, and overtime, the results will speak for themselves.
Why are homeowners having so much trouble getting approved for a loan modification?
The number one difficulty homeowners are facing in being approved for a loan modification is filling out the paperwork correctly. Â According to the U.S Treasury Department, out of the 4 million people who have applied for a loan modification since 2010, 1 million of them have been denied for inaccurately filling out the paperwork.
What common mistakes do homeowners make when completing a modification application?
Homeowners usually do one of
two things when filling out the financials section of the Uniform Borrower Assistance Form.  Some will say, “Let me show the lender that I am really in the negative,†overstating their debt, which results in them only qualifying for a forbearance, short sale, or deed in lieu. Other homeowners will fail to input 100% of their correct income according to what is on their paystubs. As a result, they might get approved for a temporary modification but will be denied for a permanent modification once their lender verifies their paystubs, even if it was off by as little as $30.
How does your software prevent inaccurate information and improve a homeowner’s chance of receiving a modification?
The software includes a video guide that walks them through the process step by step as well as pop-up boxes that educate the homeowner on everything they are filling out. Â Most importantly, our software uses the same type of algorithms as the banking lenders to determine eligibility. Therefore, all homeowners who use our software will know the likelihood of being denied before sending their package; while also educating them on changes they could make to better position themselves for approval. Â This really helps homeowners see how important it is to be 100% accurate rather than leaving the application process to chance. The software will then merge all of their information to the correct forms and ensures they are complete and ready to send to their lender. Â After completing our software, all the homeowner has to do is print the forms and fax them to their lender.
Besides the application, are there other issues that can cause a homeowner to be denied?
Unfortunately, yes, human error can still occur during the process after submitting an application. Â Representatives from different departments are all working on the same file, which can lead to a communication breakdown. Â Also, call center representatives sometimes give incorrect information or forget to disclose helpful resources.
How does the software address that issue?
One of the features of the software called The Journey System is designed to track the user’s [modification] package and eliminate mistakes made by the lender. This feature will provide notifications days or even weeks in advance of possible problems while also providing a solution so that they are never caught off guard. Â The feature also provides audio recordings of phone conversations based on where they are in the process. We had professional actors, act out the script that lenders use so that the borrower will know what to expect when they call their lender. The Journey System is designed to eliminate the fear homeowners face when talking to their lender. It gives them the confidence to know exactly what to expect and what to say each time.
Why is it necessary to have homeowners listen to staged audio recordings?
[The foreclosure process] throws people off mentally. I say the biggest reason home modifications aren’t working is because homeowners are fearful.
They are stuck, but they don’t want to call somebody because they are embarrassed and don’t know what to say. I’ve seen this happen to doctor’s and even lawyers. When you know what to expect it takes away that fear. That is what The Journey System does.How does the software stay in compliance with all the different lenders and servicers?
The biggest misconception is that the lenders are the actual decision makers when in reality they are just the middlemen. Â The truth is the investors are the ones who decide approval and our software stays in compliance with all of the investors.
How can a homeowner trust the security of your software with all of their personal information?
Our software is a desktop application that is free to download and try. Therefore, all the homeowner’s personal information is saved only on their personal computer and not on the Internet. The software is free, but it costs $197 to use the Journey System and print out the modification package.
Editor’s Note: When using desktop software make certain that all of your anti-virus software is up to date to prevent malicious intruders from accessing your desktop files.