One-man operation launches tool to help people stay in their homes
Searching for resources to avoid foreclosure against a backdrop of pandemic can be a daunting and humbling task for a typical homeowner. Now, enter the aptly named Cakeforms software to make the process a little sweeter.
The Cakeforms Automated Underwriter for Mortgage Assistance is designed to let vulnerable homeowners know immediately if they are pre-approved for the new COVID-19 mortgage recovery programs created by Fannie Mae, Freddie Mac and FHA.
Typically, homeowners wait an agonizing 60- to 120-day period for lenders to make a decision related to their properties once they get behind in payments. There are still more than one million – some 2.7 million at the peak of the COVID-19 pandemic – locked into forebearance agreements, a temporary program that put a stop to mortgage payments to allow people to recover economically from the corrosive economic effects of the pandemic.
But those programs are about to end for many.
“Their lender can only pause the foreclosure and those payments for so long, and usually that period of time is between 12 to 18 months, max,” Cakeforms CEO Allan Robinson (pictured) told Mortgage Professional America. “Once the forbearance nears expiration, something has to be done. Either the lender forecloses, or the homeowner is transitioned into a long-term, loss mitigation option.”
That is where his product comes in, priced at $19.95 a pop. Robinson noted the cost is a one-time expense given that users will likely only need it for one month’s time as they seek resources to help stave off foreclosure.
“My product is for people who need to be transitioned into a long-term loss mitigation option,” Robinson said. “We give you all the programs that are available through Fannie Mae, FHA or Freddie Mac, which is roughly about 57% of all the mortgages that are out there. Our software tells you for which programs you qualify, and how to qualify for previously denied programs.”
The Cakeforms Automated Underwriter is a single PDF file – with guidelines for mortgage assistance encoded in it – that homeowners can download from the Cakeforms website. Robinson noted these are the same guidelines that lenders and servicers must use. There are separate versions of the software for Fannie Mae, Freddie Mac and FHA mortgages.
“I wanted to help people,” Robinson said. His “day job” consists of running a company that negotiates short sales, deeds in lieu (of foreclosure) and loan modifications in addition to having a programmer background.
To further offer people aid, Robinson sought to demystify the process of seeking foreclosure-averting resources.
“I’ve been working with homeowners for 23 years,” he said. “There’s a lot of people out there who are scared, who are intimated by the process, because they have to fill out this very complicated mortgage assistance application and don’t understand the process. It can involve multiple forms, and that’s intimidating in itself.”
Strict guidelines attached to government-sponsored entities in normal times adds to the intimidating nature of dealing with the agencies, Robinson suggested.
“The mandatory term for a loan modification is a 30-year loan,” he said. “So, if you already paid half of that – let’s say you’re in your 16th year – and you get in trouble and you want to do a loan modification with the FHA, you have to start over at 30 years, and it’s 40 years with Fannie Mae.”
Yet in addition to Robinson’s helpful software, homeowners can also count on empathy from government-sponsored entities intent on keeping folks in their homes. “These are the most aggressive programs ever at keeping borrowers in their homes by offering historically low interest rates and incentives,” he said.
Sadly, not all will weather the storm – with or without his software: “When they declared the COVID emergency on March 01, 2020, you had to be less than 60 days delinquent. So, you could only have missed one payment or you didn’t qualify for the program,” Robinson explained. “So there’s going to be lots of people that fall through the cracks, basically.”
