In a marketplace where pressure comes from a variety of sources starting with unprecedented volume, servicers are finding themselves performing a balancing act. Keeping the right balance between costs and expenses, as well as in-house and outsourcing services, is just one additional pressure to handle.

Rescuers sometimes are third-party field servicers offering traditional before-and-after foreclosure assistance in addition to partnership-based services. In the case of Mortgage Contracting Services the company started a 24-hour hotline designed to assist servicers in responding to tenants of defaulted or foreclosed properties facing living condition problems. In these cases the Helping Families Save Their Homes Act of 2009 requires servicers to act like landlords.

Loss mitigation also is a hot market for both servicers and third-party providers like Service Link. Executives expect significant growth in demand since many servicers face capacity issues. They see loss mitigation, either as in-house or as third-party outsourcing, becoming a permanent part of the mortgage servicing market, marking one of several long-term changes the marketplace is witnessing in current times. ServiceLink, for example, expects to see a tenfold growth in loss mitigation revenue in 2010.

Technology providers are at the forefront of that growth in service and automation demand. ISGN is one such provider that created the ISGN default and loan servicing group, a separate division providing loss mitigation services for lenders and servicers.

There is a wide industry consensus that the speed and quality of loan analysis, borrower outreach and follow-up, fulfillment of loan modification packages and transparency of information are key to reaching sustainable solutions for servicers. Oftentimes outsourcing makes much more business sense to overloaded mortgage servicers.

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