Servicers were ill-equipped to handle the influx of delinquent borrowers that sought answers and guidance to avoid foreclosure.
Prior to the crisis, a servicer’s focus was on collections. Now, five years later, that focus has shifted to collaborating with distressed homeowners and utilizing every available option to avoid foreclosure, and ultimately, another housing crisis.
The largest servicers participating in Making Home Affordable, an initiative launched in 2009 to provide mortgage modification standards, are required by the Department of the Treasury to provide each homeowner seeking help through MHA with a single point of contact, or SPOC, who will work with them in the event of delinquency to avoid foreclosure.
For an industrywide effect, the national mortgage settlement now includes a SPOC requirement in its servicing standards, and the Consumer Financial Protection Bureau includes a similar mandate known as the “continuity of contact” in its servicing standards.
A servicer has the option of assigning a single agent or team to satisfy the SPOC requirement. However, major problems associated with SPOC range from lengthy loss mitigation telephone calls, to call prioritization and audit reporting. SPOCs will provide homeowners with stability, open lines of communication and answers during delinquency, but how can servicers adjust to the new rule and effectively achieve the success it was meant to bring?
Under the new CFPB guideline, servicers must assign a SPOC to a delinquent homeowner or a homeowner no later than the 45th day of delinquency. The SPOC is responsible for pursuing other MHA programs, including the Home Affordable Modification Program or the Home Affordable Foreclosure Alternative Program, or home retention and short sales, to avoid foreclose at all costs. With demands, inquiries and the sheer number of assigned homeowners, the SPOC is bound to face significant challenges.
Time is of the essence when dealing with delinquent borrowers. SPOCs must ensure sensitive calls—both inbound and outbound—are given priority. Leveraging technology that pulls loan-level data and call characteristics enable SPOCs to handle critical calls at a moment’s notice to more effectively handle borrower needs.
But what happens when a borrower’s SPOC is out sick? Or on extended leave?
If a SPOC is unavailable, borrowers must be given other options—call backs, informational messages or transfers to voicemail or a supervisor—so that their questions are answered in a timely manner, or given priority when their SPOC returns.
Servicers must be able to identify critical inbound and outbound calls that need immediate attention. Loss mitigation calls can be handled more efficiently if hold times and call abandons are reduced. For example, assigning priority to calls based upon loan-level data, call type, call history and call status enable servicers to take the next highest scored call to address impending loss mitigation issues. Facilitating better communication and attention to this kind of detail can improve overall borrower satisfaction.
Prioritizing calls to improve customer satisfaction and mitigate risk is only half the battle. Servicers must document each call attempt in the event of an audit, but more importantly, to improve, or maintain, the servicer-borrower relationship. Captured call activities allow servicers to transfer calls to supervisors or reschedule calls, while documenting each communication effort for a single borrower.
Comprehensive reporting allows servicers to measure the effectiveness of its SPOC initiatives, providing data that proves, or disproves, of communication and borrower claims.
The SPOC regulation is here to stay, and servicers are more equipped to handle delinquent borrowers’ needs than ever before. Technology, training and workflow processes can only be improved from this federally-mandated rule that will ultimately enable servicers to maximize resources and effectively communicate with borrowers. Upgrading operations will guarantee compliance and improve relationships, further stabilizing the housing market and preventing future crises.
Barry Hays is senior vice president and co-founder of TeleVoice. He may be reached by email at firstname.lastname@example.org.