The last five years have seen significant change in the servicing sector. The emergence of special servicers to provide high-touch servicing has created new requirements and challenges for the servicing and technology industries. Today, a special servicer is working with information coming from multiple sources and has to ensure quick and accurate dissemination of that data within its organization, which creates numerous information management challenges.
Special servicers have a high volume and frequent contact with borrowers. This contact may be through a combination of outbound contact by the servicer, as well as inbound contact from borrowers. Through the workout process, borrowers are sending in required information and documentation. As a servicer, it is critical to ensure that the borrower is asked for the information only once. Servicers need to ensure that all incoming information is integrated with an enterprise content management system.
In addition to documentation being stored, borrower communication needs to be documented in the servicing system as well. A single point of contact model creates a single destination for all this incoming information, and servicers need to align their documentation processes to enable these processes.
Another source of information exchange is communication with investors. A special servicer is typically acting on behalf on investors who may provide certain delegated authority, and require loan-level approvals beyond certain thresholds. It is important for the servicer to have an electronic method of communication with investors. Such tools ensure a single place where an investor can view its entire portfolio, but also have audit abilities for future portfolio reviews.
A third source of information is regulatory and guideline changes for loans in various jurisdictions. As guideline changes are being communicated by various agencies, servicers need to develop an efficient and consistent process of communicating these changes to the front line associates working with borrowers and loan cases.
In this constantly evolving environment, the servicers need to update their information management processes and tools to ensure high level of service to borrowers. In addition to being good business practice, this will also ensure compliance with direction that servicers are receiving from regulators and during the judicial process in the default arena.