Wingspan Portfolio Advisors LLC, a Dallas area-based mortgage servicing specialist, announced yesterday that it has opened its doors to assist lenders and servicers plagued by seriously delinquent loans. The service, which applies a unique borrower-focused methodology, is aimed not only at mitigating losses, but at actually helping borrowers achieve full payment status, resulting in “re-performing” loans for lenders who had little hope of saving these transactions from foreclosure.

Wingspan’s mission is to give servicers, investors, and other stakeholders, such as mortgage insurance companies, a fighting chance to save loans that otherwise would have gone to foreclosure, the company said in a press statement. The company was founded and is led by servicing industry veteran Steven Horne, a lawyer who was formerly director of Servicing Risk Strategy at Fannie Mae.

“There are very few specialists out there with the tools and skills needed to cure these nonperforming mortgages, and so many times these loans, and especially the ones with low equity or low balances, are given up on,” explained Horne. “We have created a methodology that uses data and metrics to help us establish scenarios that offer hope to investors and borrowers alike. Our team of highly experienced and dedicated specialists understands that the ultimate value of a nonperforming mortgage does not depend exclusively on collateral value, but also on the borrower’s psychology.”

Traditional servicing methods rely on net present value (NPV) to arrive at decisions, Horne explained, and that creates an assumption that loans outside the loss mitigation model can never be saved. “We don’t arrive at the decision that a loan is lost before we completely understand the situation,” Horne said.

Wingspan’s advisors rely heavily on a non-monetary consideration that Horne calls “psychological equity.” In essence, it means that if borrowers truly have the desire to avoid foreclosure and stay in their homes, they will make many sacrifices to do so. Most servicers regard the whole process as a dollars and cents equation, but Wingspan recognizes that there is much more to it in the eyes of the borrower and a strong emotional attachment to the home, Horne explained. “Borrowers always think the house is worth more than it is because they have personal capital invested in it,” he said.

In addition to the company’s unique approach, Horne said that one of the keys to its success is the right incentive plan for Wingspan advisors, who achieve 50 percent or more of their income by bringing loans back from the brink of foreclosure to paying status. Once that hurdle is overcome, the case is handed over to specialists whose job is to keep the payments flowing until the loan is contractually current. The company provides a very high degree of touch with borrowers. According to Horne, that’s another one of the company’s departures from traditional servicing methods, but he noted that the borrowers they work with need that extra attention to successfully bring their mortgage current.

Horne spent nine years as a partner with Sherman Financial Group, where he built three of the firm’s most successful business lines, including a unit that purchased and resolved portfolios of delinquent mortgage loans. He also served as director of default servicing for Ocwen, where he provided outsourcing services to Freddie Mac. Wingspan’s senior management team includes industry veterans with over 125 years of collective default servicing experience, focusing on severely delinquent first and second mortgages for lenders, servicers, and investors.