Lending in the High Tech Age

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Feature I t should go without saying the mortgage industry today is a completely different animal than it was only a few years ago. Loan qualification criteria have been upgraded, proper documentation is more important than ever on the processing side, and servicers are now working like never before to collaborate with distressed borrowers to explore all the options available. Here's the problem, though: A lot of borrowers haven't yet received the memo. From new communication standards to changing consumer needs, servicers are having to stay flexible in their approach to reach those borrowers still out in the cold. Finding a Comfort Zone T he first and perhaps most difficult challenge servicers is bringing distressed borrowers to the table in the first place. Having witnessed firsthand the fallout of the housing market's collapse in 2007–2008, these customers are skeptical of getting involved with a servicer if they don't believe their best interests are being protected, and many seem to have resigned themselves to losing their home.a "That's probably our biggest challenge—engaging someone who doesn't want to work with us," said Dana Dillard, EVP and chief customer officer for Nationstar Mortgage. "I think customers would tell you the reason they don't engage is they feel like they need a plan, and they don't have a plan. They feel, 'What am I going to engage about? I don't have the money to pay you.'" The key, Dillard says, is meeting the customer where they are, and that means adopting a multi-front strategy based on which medium will encourage a response from each borrower, ranging from phone calls to email to—as is sometimes the case with younger borrowers—social media. "You kind of have to ask the customer 'How do you want us to work with you?' and figure out a way to go there." As outreach options have expanded, servicing departments have gained some flexibility in terms of the way business is conducted. Travis Hamel Olsen, Giving Customers the Tools O f course, each tactic has its own challenges: Phone calls and emails can easily be ignored, so-called "snail mail" is tossed in the trash more often than not, and while the public nature of social media can make it useful as an educational tool, it also makes it difficult to communicate directly with consumers. That's why it's also important to give borrowers the tools to make the first steps themselves, says Rochelle Gorey, president and co-founder of MortgageKeeper, a company that helps servicers connect borrowers to financial assistance resources. One way servicers can help borrowers get started is by working with referral services to provide self-service tools right on the company's website. Portfolio Advisors, explains that the servicers' response to increased distress following the crash was to load up call centers with representatives, resulting in multiple transfers, confusion, and an overall experience in which the borrower feels disconnected from the process. "We're trying to help the customer as much as we can, but just spinning them over and over and over again into a switchboard mentality is not helping at all," he said. Now, Dickard says the approach is to do the research on each borrower's specific situation (preferably before contact is ever established) and to have one thorough conversation in which every path is laid out—keeping in mind that delinquency is most often a symptom of a larger financial problem. That way, he says, servicers can provide a prescription for a true resolution rather than just a generalized foreclosure prevention strategy. Continuity of What we'll see with the Conversation regulations is a more strategic egulators also seem to feel imporR strongly about the "the approach . . . instead of just tance of getting out of switchboard mentality"—so much moving through a process." so, in fact, that the Consumer —Jason Dickard, Wingspan co-president of Loan Resolution Corporation, says he's already seeing some of the biggest banks save on costs by letting their employees work from the comfort of their homes. "I think companies are going to continue to cut down on costs, and one of the big costs companies have out there is office space and all the equipment that goes with that," Olsen said. "So I think you'll see companies start to relax how comfortable they are having people work from home." "That helps the customer that's fearful of picking up the phone and talking to [his or her] servicer. [Customers] can do it on their own and get started on the right track prior to talking with the servicer," Gorey said. "It's a pretty simple approach, yet it's one that's still underutilized." No matter how customers get involved, the next step is to make sure they know that the tone of conversation has shifted from where it was a few years ago. Jason Dickard, EVP at Wingspan Financial Protection Bureau (CFPB) and other agencies are requiring servicers to provide borrowers with a single point of contact (SPOC), a dedicated person or team with whom they can communicate regarding their loan. The idea is to create "continuity of contact" between servicers and borrowers. "That is something that has really been driven into a lot of peoples' minds in the industry. It goes back to the idea of instead of adding just more random bodies to control call volume, [servicers are] targeting specific strategies by having a single point," Dickard said. "What we'll see with the regulations is a more strategic The M Report | 25

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