By: Anthony Forsberg, SVP of Default
As the dust starts to settle on forbearances and post-forbearance available options, the vision of what the post-COVID-19 future of loss mitigation looks like is starting to take shape. The industry has worked diligently to be able to offer assistance to customers, with each company having come up with their own strategies to manage the volumes of customers needing help while attempting to minimize delinquency.
At TMS, we sprinted out of the gate early by providing proactive insight and education. We wanted a well-educated customer to know what their options were, the impact of each option, how they would work with their unique situation, and most importantly, to know that we were there to assist them in difficult times. Despite the enormous challenges early on when the pandemic started, TMS was determined to lead by example when it came to meeting the needs of our customers.
We knew that customers were going to need and depend on us like never before. They were going to be confused, scared and misinformed–and we knew we had to get out in front of that. With that in mind, we focused on three important areas:
1. PROACTIVE EDUCATION
We wanted to make sure that customers understood the facts about forbearance–what it is, what their options are, what happens during and after forbearance, and more importantly, what it is not. We made sure that we pushed that information through our website, online banners, FAQs, blogs, customer notifications on their web portal, a video walk-through, social–every way digitally possible because we knew customers would be out there looking for help and clarity. We made it front and center and easy to find. To better understand forbearance, we avoided technical industry jargon and used plain language. We also made sure that all of our CAREologists taking calls were fully trained and armed with the same information, so that there was consistency no matter where the information was coming from.
2. COMMUNICATION AND AVAILABILITY
TMS not only scaled up our external hiring extensively to handle the situation, but we immediately moved people from other areas in the organization and cross-trained them to deal with the influx of calls. In addition, we stepped up our outbound efforts to ensure we were in constant contact with our customers who were in distress, regardless of whether they were in forbearance or not. When our data told us that they were straying from their normal payment patterns, we would reach out immediately to see what the issue was. Was it just a blip or did they need assistance? Those in forbearance got monthly wellness check-in calls, along with texts, emails, app and web push notifications. These covered the status of their forbearance, due dates, end dates, etc., so that they knew exactly where they stood at all times.
3. SELF-SERVICE CONVENIENCE
Given the situation they’re in, a lot of customers just don’t want to speak to you, or they may be ashamed to speak to you about their situation. To ensure we were able to service this population, we ramped up the ability for customers to communicate digitally. They could go through the process from start to finish, from initiating a forbearance all the way through selecting and completing a post-forbearance option all online. Customers who were coming close to the end of their forbearance were notified via wellness calls, texts, and notifications, which directed them to our website self-service option to determine next steps based on their situation. After answering a series of questions, they were presented with options (including extending their forbearance or taking a post-forbearance option) that aligned with their situation, loan type and investor/insurer rules.
Although there were times when direction from the agencies to the servicers was minimal, we knew if we continued to focus on the customer, and do the right thing–with a smile–in the long run this would pay dividends for us and them.
WHERE THINGS STAND TODAY
Fast forwarding a year and we have seen the results of our initial efforts and execution. Our average call answer speed and our forbearance rates have remained consistently below the MBA averages since the start of the pandemic, and we have maintained higher exit of forbearance levels than MBA averages when compared to all lines, IMB’s and banks. As a result, we are now focusing on a proportionally smaller population of customers in forbearance and those needing assistance finalizing post-forbearance options.
Although we have done a tremendous amount of work on our strategies for assisting our customers, the looming idea of the moratoriums lifting is not as clear. As of this article, we all have our eyes set on 6/30/2021, looking around each corner to see what is going to be pushed out. We know that the CPFB has until 8/31/2021 to announce their proposed rules, so servicers are still in an awkward dance of not being sure if the right or left foot should go first. However, as with chaos at the start of the pandemic, we know that even through this latest fog we must act in advance. We must be focused to mitigate risk and loss for ourselves and our clients.
PREPAREDNESS FOR LOOMING FORECLOSURES
We are acutely aware that there will be foreclosures, and a lot of them. There is a segment of customers who simply can’t afford their mortgage payment or need to walk away for any number of personal reasons. We already know this will not all occur at once, as there are varying states coming up with their own moratoriums, but that doesn’t change the reality that you must have a plan and already be taking action.
While we are still under the moratoriums, focus on the work you can do now. Ensuring you have adequate staffing and efficient, stress-tested processes and procedures internally is a great first step. Next, you should be working with your vendors to ensure they have capacity. Beyond that, you will need to dig deeper and anticipate what roadblocks or impediments you might run into.
Although the numbers will be nowhere near the Great Recession of 2008, there will no doubt be competition among servicers. Getting your assets moving and striving to be the first to file those first legal actions, while having documents prepared for court review before large servicers and banks get their population moving, is critical. Then dive deeper into your default organization by challenging and questioning where you stand. Ask yourself the following questions:
- Have you checked your collateral and validated you have the note and allonge?
- Have you created automation, so your pre-foreclosure referral checklist is picking up pertinent statuses?
- Are your referral packages prepared to send to your Attorney Network?
- Do you have automation around title ordering?
- Are your dialing and contact strategies delivering the desired collection and loss mitigation results?
- Do you have options in place to go above and beyond your standard phone strategies, such as door knocking and skip tracing for customers that you have not been able to have contact with?
In short, are you as prepared for this next and most critical phase of this pandemic response? If not, what are you doing to change that?
PAVE THE ROAD TO SUCCESS
As a servicer, or in working with a subservicer, the above questions are just a sample of what you should be asking, and taking action on, to ensure you and/or they are ready when the moratoriums lift. While the regulatory road ahead is not yet fully clear, there are steps that can be taken today to ensure the best possible chance of success for your organization and your customers tomorrow.