Understanding the Borrower in Borrower Outreach

SEP 5, 2012 12:26pm ET
Comments (2)

Simple messages communicated repeatedly over multiple mediums yield the most successful communication strategies.

Effective borrower outreach is really no different, especially in today’s times when thousands of borrowers are struggling or underwater with their mortgages.

Servicers reach out to borrowers regularly, but when it comes to late payments and loss mitigation, many tactics have not been successful because borrowers may be in denial about their circumstances and the overall process of working with a servicer is often perceived to be difficult.

However, proper outreach can make all the difference in borrower response and moving the borrower-servicer relationship forward.

It is essential to understand each borrower since no borrower is the same and they do not respond to every tactic in the same manner. Many companies continue to dabble with new technologies and they adopt new tactics for origination, closing, servicing and loan modifications. Naturally, the evolution of technology carries over to borrower outreach and gives servicers a number of new channels to get their message across.

With so many options for communicating with borrowers, servicers need to match communication channels with the needs of the individual borrower. This is essential since there is no method of borrower outreach that will work for everyone.

And so, servicers have to assess many trial and error tactics to find how the message will resonate best with each borrower.

Servicers can of course continue to make traditional phone calls and send letters through U.S. mail to each borrower, often to no avail. Borrowers can avoid calls, especially once they recognize the number, and some simply throw away any warning letters they receive.

But as communication channels continue to evolve, we now have avenues such as email and text messaging to get in touch with the borrower. Many consumers opt to receive correspondences from a bank or lender through email and text messages, and so with their consent, servicers can now tap these technologies and leverage them for borrower outreach.            

Borrowers can avoid contact attempted through phone calls and letters if they do not want to communicate with the servicer.

However, the message that there are options to avoid foreclosure must be communicated across multiple communication channels in order to be successful. It is crucial for servicers to use a variety of methods for each borrower in order to get through. While a phone call may work for one person, it may take a visit to the home for the next.

As the servicing environment continues to remain unpredictable, as does the borrower, servicers must be persistent but also pleasant to have the best luck with a borrower. If borrowers are shown professional courtesy and flexibility, they will tend to be much more agreeable and a sensible solution can be reached for all parties.

The key is to have consistent messaging communicated across the numerous options now available. 

Kevin Osuna is vice president and director of default services for Gateway Mortgage Group LLC, a complete end-to-end mortgage banking firm that offers origination, servicing and correspondent lending services.

Comments (2)
Effective borrower communication is at the root of all regulatory compliance, loss mit and default management efforts. Almost as an afterthought, organizations address communications issues with an ad hoc approach, fixing each communications issue in a silo of ignorance that fails to consider the integrated nature of internal and external customer interaction. My company, CEDAR Document Technologies, specializes in integrated mortgage multichannel communications - print & mail, mobile sms text, web portal, tablet, and secure email. I will be at the MBA's 99th Annual Conference in October.
Posted by | Wednesday, September 26 2012 at 3:40PM ET
Truly effective borrower outreach should include phone campaigns, door knocks, and skip tracing efforts to ensure quality right party contact is made and gather trailing documents to help reach an agreement and create a helpful loan alternative for troubled borrowers. Third-party borrower outreach companies such as NCCI, www.NationalCreditors.com, may be of great assistance to servicers, by providing a national network of field representatives, the latest call center technology and meeting FDCPA guidelines and GSE standards to help reduce delinquencies and foreclosure loan losses. Ultimately, servicers should choose an experienced, compliant, and effective vendor to help minimize losses and keep more families in their homes.
Posted by | Monday, October 29 2012 at 5:10PM ET
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