Sperlonga Data and Analytics, a subsidiary of national real estate asset firm MMREM, announced a new service designed to help mortgage servicers reduce their risk on loan modifications by alerting lenders that a borrower is falling behind on their homeowners association fees.

Unpaid HOA fees, a clear sign of potential mortgage defaults, have historically been very difficult for lenders and servicers to track. With this new service, the company said lenders can identify potential defaults or troubled modifications months before the borrower actually misses a mortgage payment.

The service, which Sperlonga calls Loss Mitigation Association Surveillance, makes it possible for servicers to stay up to date on problems regarding borrower payment of HOA fees. LMAS provides an authorization form for servicers to execute with the borrower during the loan modification process that allows Sperlonga to communicate directly with the HOA. Sperlonga then monitors monthly payments and notifies the servicer if the borrower misses a payment, providing a warning to trigger servicer attention that a potential default is looming. The LMAS service complements a related product, Sperlonga’s HOA Delinquency Check, which ensures that a borrower is not severely delinquent on HOA dues prior to a loan modification or short sale, forewarning servicers and lenders of potential difficulties with those transactions.
 
“In the majority of the cases, borrowers will stop paying their HOA fees before they stop making their mortgage payment,” said Matt Martin, Sperlonga’s chairman and CEO of MMREM.  “Knowledge that a borrower is late or delinquent on HOA fees will allow servicers to get in front of a loan that’s about to default. And in the case of loan mods, it can be even more critical to minimize losses.”
 
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