Innovative Program Turns Renters into Homeowners Using HLP.guru March 2017
Take 5 Darryl Lewis discusses Trio’s lease-to-own financing program for people seeking to purchase homes Page 2
People facing a variety of financial challenges to homeownership are getting help from a unique new lease-to-own program that helps them qualify for a mortgage loan. And to help them qualify, they are now using HLP’s new app, HLP.guru. Trio Residential, based in Bellevue, Washington, is a home lease financing program that provides several credit options for potential homeowners. Trio appeals to a wide range of potential homebuyers, including first-time homebuyers, those relocating to a new city and others still recovering financially from the housing crisis. Trio currently offers financing to people in California, Texas and Georgia and plans to expand to other states this year. “Instead of starting with a home mortgage, Trio qualifies a person or family for a lease without the need for a down payment. That makes it easier for a lot of people to get
Council Convenes Representatives of the nation’s top mortgage servicers attended our Servicer Advisory Council meeting
…continued on page 5
PHFA Sets New Standard for Government Agencies with HLP Tools
The Pennsylvania Housing Finance Agency (PHFA) is making final preparations before implementing new HLP technology in May that will streamline its processes and make it more efficient and easier to use.
That’s when PHFA is scheduled to begin using HLP’s case management system and affiliate management portal. The state housing authority is making the switch to better manage its work with more than 75 nonprofit counseling agencies. These agencies are responsible for filing approximately 20,000 cases annually with PHFA .
Finance of America Mortgage and HLP offer a new program to help qualify more applicants Page 4
With this initiative, PHFA offers a template to other government agencies on how to use technology to improve services for its citizens. Until now, the counseling agencies were using five different systems to submit their data, an inefficient, time-consuming process for the agencies and PHFA. HLP is providing a custom reporting system that will significantly reduce the time needed to generate and file reports. …continued on page 4
Darryl Lewis is chief executive officer of Applied Residential Inc. and managing director of Trio. Based in Bellevue, Washington, Trio is an innovative lease-to-own financing program for people seeking to purchase single-family homes.
What is the financial profile of your average client? Trio extends credit to consumers seeking to transition into homeownership. Our customers are primarily first time homebuyers—those that are newly employed, recovering from the loss of a home or those experiencing a major life change, such as relocation, medical challenges or divorce. We primarily serve households with incomes ranging from 80% to 200% of area median income.
How did you develop Trio’s business model? Our original program transitioned 100 percent of customers into homeowners. To increase affordability and homeownership conversion rates, we introduced our first assumable mortgage product with Fannie Mae in 2003. Today, our assumable mortgage is originated by participating lenders and provides customers with a fixed rate, 30-year mortgage they can qualify to assume when they are ready to become homeowners. By locking in home price and interest rate, more than 60 percent of our customers have successfully made the transition into homeownership.
What are the primary reasons people use Trio?
Trio customers have capacity in credit and income to qualify for a mortgage, but may lack down payment funds, are selfemployed or don’t yet meet the underwriting standards for their income from a new job or lingering collections from the recession. Trio’s financing agreement locks in the home price, typically at today’s cost, plus 1%, and a mortgage interest rate for up to five years. Industry partners prefer
Trio because every new Trio financing pays normal industry transaction costs from escrow and title to brokerage commissions and mortgage origination fees.
How can HLP.guru help your customers? We offer HLP.guru at two stages—before our applicants are qualified to be customers and once our approved customers embark on the purchase process after they move in to their new home. HLP.guru delivers unmatched credit analysis and has easy to read interfaces that our customers can actually use (without an interpreter) to improve their situation. We refer applicants that are not yet ready to finance with Trio to HLP.guru to help qualify by raising their credit score. Trio also includes HLP.guru services for every one of its customers after they move into their new home. The goal is to maintain or improve their credit to 660+ to meet the requirements of our included assumable mortgages to transition into homeowners.
Where do you offer the service? Are there plans to expand into new markets? Trio and its assumable OwnOption Mortgage are now available in California, Texas and Georgia. Expansion during 2017 is likely to include the states of Florida, South Carolina, North Carolina, Washington, Oregon, and Hawaii. Our goal for 2018 is to expand the program nationally. Lenders seeking to expand originations and counseling agencies seeking solutions for their clients may contact us at firstname.lastname@example.org.
U P D AT E
Servicer Advisory Council Tackles Industry Challenges More than 30 people representing the nation’s top mortgage servicers attended the group’s initial meeting in March. The council was assembled by HLP Chief Executive Officer Cam Melchiorre to address servicers’ needs in a new environment for the mortgage business. The council has three major focus area:
• Developing key industry-level initiatives involving HLP;
• Improving the functionality of HLP’s platform; and
• Using HLP’s technology to drive innovation in the loss mitigation process.
During the meeting, servicers shared their thoughts about how to achieve these goals as well providing HLP with information about their top priorities. The top issues emerged from the meeting included:
• Improving the customer experience;
• Finding additional ways to reduce costs;
• Complying with regulatory issues; and
• Developing more effective partnerships with HUD-approved counseling agencies.
The council was also briefed on HLP’s new technology platform for Homeowner Connect. This portal is designed to improve the customer experience and improve pull-through rates for consumers who apply for mortgage assistance and submit loan packages directly to its servicer. A working group has been created to define the requirements for improved functionality and has already held its first meeting. The goal is to have the new Homeowner Connect platform ready to launch in June.
HLP Assists Easterseals with New Housing Program HLP is supporting Easterseals’ new national outreach campaign that encourages their members to take positive steps to secure affordable housing options that promote independent living. This group of clients, caregivers, staff and donors totals more than two million people and many face unique challenges in finding the right housing. The goal is to connect this historically overlooked and underserved group with a variety of financial educational tools, home buyer resources and specialized lender programs. Easterseals is a nonprofit organization that offers help to more than 1 million children and adults living with autism spectrum disorder (ASD) and other disabilities or special needs and their families each year. Services and support are provided through a network of more than 550 sites in the U.S. Each center provides services tailored to meet specific needs of the particular community served.
Finance of America Invests in Help for Declined Applicants The dream of homeownership is getting closer for many people thanks to an investment by Finance of America to help its many of its declined applicants qualify for a mortgage loan. One of the nation’s top lenders, Finance of America will soon offer a select group of these prospective homeowners access to HLP.Guru, to help them raise their credit scores and qualify for a mortgage loan. To train Finance of America’s mortgage professionals on HLP.guru’s features, Alex Kolodner (above), HLP’s training and technology coordinator, taught classes on March 16 in Charlotte and March 22 in Irvine, California. HLP.guru helps prospective home buyers manage their credit, improve their capacity to borrow, and work with a certified nonprofit housing counselor. Each person has access to on-demand gurus—a nonprofit housing counselor to help potential applicants develop and implement an action plan to qualify for a mortgage loan.
…PHFA–continued from page 1
“We’re modernizing the reporting process, which will save time for counselors and allow them to spend more time with homeowners,” said Alex Kolodner, HLP’s technology and training coordinator. Counseling agencies will also benefit by sending all of their documents in one format, simplifying the billing and payment process for these organizations. HLP plans to start a series of in-person, webinar and written training sessions in May for PHFA and its counseling agencies to help them get the most from their new technology. While the case management system will streamline PHFA’s workflow, the new affiliate management portal will it better manage its counseling agencies. Data about each agency’s performance will be monitored on the system, as well as information about their compliance requirements and other needs. PHFA
administrators will be able to easily coordinate all activities with each agency in one portal. “The affiliate management portal will enable PHFA to better manage its relationships with counseling agencies while also saving time,” Kolodner says. Because all documents about each counseling agency are uploaded into the portal, PHFA will be more productive. The agency can also be more proactive in its relationships. For example, if PHFA reviews records in the portal sees that an agency’s certification for a compliance or other regulatory issues is about to expire, it can notify the counseling agency. A mediation portal will be included in the second phase of this project. PHFA is a state-affiliated agency that provides affordable homeownership and rental apartment options for senior adults, low- and moderate-income families and people with special housing needs.
…Trio–continued from page 1
financing up front,” said Darryl Lewis, Trio’s managing director. “Trio has fixed monthly payments, a choice to finance for one to five years, and the option to purchase at any time during the lease.” Many of Trio’s customers include people who are self-employed, recently started a new job, experienced a recent loss of income, face high student loan debt or have experienced foreclosure a short sale. They also work with people who don’t have enough money saved for a down payment or the professional that has moved to a new city, but isn’t certain they will live there for a long period.
To help its customers qualify for a mortgage loan, Trio is subsidizing nearly the entire cost of membership in HLP.guru. The HLP.guru app gives first-time homebuyers the tools needed to manage their credit, improve their borrowing capacity and connect with a certified nonprofit housing counselor. The gurus providing advice and guidance to consumers are HUD-certified nonprofit housing counselors from around the country. Once a person enrolls in HLP.guru, they can connect to a housing counselor that will help them develop an action plan aimed at qualifying for a mortgage loan. To find out more about Trio, visit www.thinktrio.com.
HLP wants you to know about six facts, figures and upcoming events:
1 Cam Melchiorre attended the recent HOPE Now quarterly fly-in meeting in Washington, DC .
2 Bank of America and HSBC recently completed their consumer relief requirements for the DOJ settlement and National Mortgage Settlement, respectively.
3 First- and second-lien mortgage default rates increased slightly in February for the 3rd consecutive month.
4 Loan modifications were up 3% in January over December as servicers worked through the remaining HAMP applications.
5 Unmet credit demand is partially caused by the reluctance of some to even apply for credit and more are pessimistic of future approval rates.
6 Homebuyers are thwarted by record-low supply properties and many may find the inventory of homes priced for them will be very limited.
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Published on Mar 23, 2017
News and Information from HLP. In this month’s issue, we report on Trio's innovative program that turns renters into homeowners and how Fina...