PERSON OF THE WEEK: Pramod Karachur is a project manager at IndiSoft, a provider of technology solutions to the mortgage industry. MortgageOrb recently interviewed Karachur to learn more about the trends counseling agencies can expect to see in 2015 – and how they will adjust to changing requirements.
Q: What trends do you think will be prominent for counseling agencies in 2015?
Karachur: The funding through loss mitigation cases that was a cash cow for many of the counseling agencies for the past few years is starting to dry up. Counseling agencies will expand into different types of counseling, such as post-mod and budget counseling, to compensate for the loss of revenue.
In the upcoming years, the focus is going to be on other types of counseling, primarily pre-purchase counseling. Lenders want to provide assistance to qualified homeowners, and there are various programs that can assist them with this. For example, we have seen lenders now actively working with counseling agencies for the potential homeowners who were denied approval by just a few points. By working with the counseling agencies, these lenders are able to save time and efforts put into the lead that could have been lost otherwise.
Q: In what ways will counseling agencies grow in 2015? How?
Karachur: Counseling agencies will have to be innovative in finding new revenue sources. The easiest and most important way to do this is through home buyer education and pre-purchase counseling. These programs can be funded through fee-for-service, sponsored by lenders, or by U.S. Department of Housing and Urban Development (HUD) grants. This is a win-win situation because it not only helps future homeowners to become responsible with their finances, but it also improves their local community.
Q: What role will technology play with post-mod counseling in the coming year?
Karachur: Counselors advise homeowners in post-mod by assisting them with their current financial situation and preparing them for the future. Along with that, counselors are expected to provide grant reports, prepare for the yearly audits (sometimes multiple times in a year) and develop strategies to attract more clients. These tasks can be very stressful for any organization.
Using a robust case management system (CMS) would be one of the quickest and easiest ways for agencies to meet manage their goals. One of the ways agencies can help borrowers through the use of technology is to use the CMS automated messaging service to remind borrowers of their monthly financial obligations and upcoming milestones, such as the monthly payment.
At the same time, using an effective CMS will allow counselors to manage all of their tasks, generate grant reports and be prepared for their audits. By running reports on the CMS' referral sources, agencies can more efficiently determine where to spend marketing funds.
Q: While technology is indeed useful, how can counseling agencies best use it to meet regulatory requirements and the needs of consumers?
Karachur: Agencies need to update their systems, including CMSs, in order to be compliant with the changes happenings at grantee. For example, HUD has updated its current HUD9902 form, and systems are required to be compliant with those changes. Counseling agencies that have adopted smart CMSs will not have to worry, as they will automatically be compliant with the changes. All grants come with extensive reporting and oversight. With the right technology, these tasks become very valuable to counseling agencies by saving time and money.
Q: What steps can counseling agencies take to ensure they have the right technology for them?
Karachur: Counseling agencies should follow a ‘work smart’ philosophy by adopting the technology in its entirety. In order to ensure that counselors are using technology to its fullest, agencies need to automate their entire process from intake to case submission with all of its cases, especially loss mitigation. Counselors should focus on their main skill set, counseling. By using a smart CMS, counselors are able to focus more on their main duties and less on non-value added activities, such as reporting and setting up email campaigns, which can be done by an automated system. This will help counselors increase their efficiency, manage more cases and ultimately increase revenues.