Loan Value Group (LVG), Rumson, N.J., is close to partnering with a national mortgage lender to begin rolling out a patent-pending program aimed at heading off "strategic default," according to industry sources. An LVG representative declined to comment and the lender was not identified.
The sources told National Mortgage News the program avoids the use of loan modifications or reduction of principal. Instead it provides an alternative way to keep at-risk borrowers who might otherwise be encouraged to default due to negative equity paying on their original mortgage notes.
The program is said to be designed to align the interests of lenders, servicers, GSEs and taxpayers while avoiding costs to homeowners or taxpayers. The sources said it is set for roll out and implementation on a private-label basis to eligible homeowners as early as the first quarter of 2010.