Special Servicing's New Talent Model

You've probably heard the counsel that "repeatedly doing the same thing despite getting undesirable results is the purest definition of 'crazy'."

But that's where some special servicers find themselves these days if they fail to identify new talent approaches to meet the immense and historic challenges they are facing.

As John Vella, executive vice-president, GMAC Mortgage Subservicing, said in a panel discussion during this year's MBA Servicing Conference: "The old loss mitigation template has changed totally." So has everything else, including the people executing that template. The new talent acquisition model for special servicing no longer centers around assembly line, "old-school" approaches to difficulties ranging from delinquency to default. This new model requires multi-dimensional customer service that takes a disciplined (4 C's) approach, tracking with and clearly reflecting the new borrower behavioral dynamic.

In that new dynamic, borrowers need immediate attention to their individual circumstances from empathic professionals who have an ability to implement and monitor outcomes.

Special servicing, then, takes on a whole new look; it's no longer about collections staff. Rather, it's about actions like the searches we're doing to help servicers find the right people with the sophisticated edge and know-how to leverage and deliver the right solutions, for borrowers, investors and servicers.

The new servicing sector performer is capable of implementing changing diagnostics and more comprehensive solutions to a needs-based approach. Performance is defined on the quality of deliverables considering all the variables like shorter timelines, lower severity, less recidivism and best execution. I believe their creative passion for success, and drive for performance, during this volatile period of uncertainty, is creating the necessary changes and practices that place them and their companies at the forefront of tomorrow's leaders.

Servicers will have complex government rules to decipher and implement under the new $275 billion Homeowner Affordability and Stability Plan, which aims to prevent up to 4 million foreclosures by providing mortgage modifications.

And, it is a challenge made all the more difficult because traditional servicers are reeling under the strain of this defaulting market. Budgets configured for uninterrupted collections, escrow accumulations and payout transactions are dwarfed by the giant-sized costs of tracking delinquent customers, multiple communications with them and proactively identifying people who can and should be helped - all extremely time- consuming tasks.

Rick Glass has served the mortgage banking industry since 1983. Before opening his own business specializing in nonprime mortgage sector executive search, he led the mortgage division of the nation's largest executive search firm. Glass can be reached at: (916) 564-8400, or: rick@rtgaa.com.