Fifth Third Mortgage Company Government Modification Conversion Rate Near 35 Percent
Modification rate more than four times national average
When the Obama Administration introduced the comprehensive Home Affordability and Stability Plan in March 2009, the goal was to provide refinance and modification options for millions of homeowners. Fifth Third Mortgage Company, a subsidiary of Fifth Third Bank and the 18th largest mortgage originator in the country (Inside Mortgage Finance, October 2009), has done its part to help homeowners stay in their homes.
Of the 89 percent of Fifth Third Mortgage Company's portfolio eligible for Home Affordable Modification Program (HAMP) consideration, nearly 35 percent of trial plans started have been converted to permanent modifications. According to U.S. Treasury data recently released for December 2009, that percentage is more than four times the national average of 7.4 percent.
"Fifth Third Bank works hard to provide the best for our customers," said Steve Alonso, executive vice president of Consumer Lending and Mortgage at Fifth Third Bank. "We have significantly increased staff in this department and continuously work to convert customers who are eligible for the program."
The Mortgage Company uses HAMP on its Fannie Mae-and Freddie Mac-owned mortgages, per government sponsored entities' (GSE) mandatory participation in the program. Housing and Urban Development (HUD) created a program similar to HAMP for the mortgages it owns and the Bank services. Both programs require a three-month trial modification period before being converted to permanent status.
Many portions of the Making Home Affordable Program have raised questions from borrowers completing the extensive paperwork necessary to participate in the program. Fifth Third Bank has created a Web site to help borrowers navigate through the paperwork. The site, www.53.com/promo/bettertomorrow, explains in easy-to-understand terms the program requirements.
More than a year prior to the Home Affordability and Stability Plan launch, Fifth Third Bank recognized the need for comprehensive assistance programs for mortgage, credit cards and other needs. The Bank developed proactive customer outreach and assertive modification programs to assist more borrowers experiencing financial hardship. The program, "You Have Options," allowed the Bank to offer flexible-term and rate concessions to bank-owned mortgages, approximately 8 percent of Fifth Third Mortgage Company's portfolio.
The Bank has decided to continue to use the "You Have Options" program for its bank-owned mortgages instead of the government's HAMP program. While HAMP does have benefits to the customer, Fifth Third's "You Have Options" program is tailored, through a menu of options, to each customer's specific financial situation – not just the customer's mortgage payment-to-income as in HAMP.
"'You Have Options' primary goal is to consider all debts and reasonable monthly obligations to ensure the customer has a surplus of monthly net cash flow for unplanned circumstances," said Alonso.
Approximately 70 percent of bank-owned modifications continue to perform according to the updated terms. With the "You Have Options" program, Fifth Third Bank also developed a proactive customer outreach programs with a "we're here to help" theme designed to build customer trust and enable solution-driven interactions between the Bank and its customers, including:
- A Centralized Toll-Free Contact Point – The Bank offers a centralized number ((866) 601-6391) for all loss mitigation related customer inquiries. If a customer would like to discuss workout options on their first mortgage, second mortgage, auto or credit card account, they can call one centralized number in order to connect with the appropriate department.
- Internet Communication Options – Customers can view different workout options, both stimulus and non-stimulus, on the Web at www.53.com or send an e-mail requesting assistance.
- Early Intervention Department – This department focuses on those accounts deemed to exhibit signs of possible default such as declining credit scores and depreciating market prices.
- Home Visits – Fifth Third Bank employees and third-party agencies visit homes of customers where we have had no contact and place them on the phone with our foreclosure prevention team.
- Travel Team / Outreach Events – The Bank sponsors and participates in programs in communities experiencing extreme economic hardships. Face-to-face borrower counseling is conducted with decision makers on-site to approve workout plans.
- Community Affairs Officers – Fifth Third Bank utilizes its Community Affairs Officers to partner with various non-profit and government agencies to offer loss mitigation alternatives in a non-threatening environment.
- Fifth Third Bank Community Advisory Forum Network (CAF) – Fifth Third Bank uses its Community Advisory Forums network in eight metropolitan markets. This group is made up of community leaders that advise the local Fifth Third Bank affiliate on matters related to lending, outreach and community engagement.
- Fifth Third Home Ownership Mobile – The Bank's eBus makes it possible for Fifth Third to deliver loss-mitigation assistance to the doorsteps of low-and moderate-income neighborhoods while providing other community based benefits (e.g. technology education).
Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. The Company has $113 billion in assets, operates 16 affiliates with 1,309 full-service Banking Centers, including 103 Bank Mart® locations open seven days a week inside select grocery stores and 2,358 ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Pennsylvania, Missouri, Georgia and North Carolina. Fifth Third operates four main businesses: Commercial Banking, Branch Banking, Consumer Lending, and Investment Advisors. Fifth Third also has a 49% interest in Fifth Third Processing Solutions, LLC. Fifth Third is among the largest money managers in the Midwest and, as of December 31, 2009, has $187 billion in assets under care, of which it managed $25 billion for individuals, corporations and not-for-profit organizations. Investor information and press releases can be viewed at www.53.com. Fifth Third's common stock is traded on the NASDAQ® National Global Select Market under the symbol "FITB." Member FDIC. Equal Housing Lender.