All posts tagged borrower

Mortgage servicers get help with SPOC implementation

by Brian Moore on July 19, 2011 in Brian Moore, Mortgage, Varolii News with No comments

Over the past four months, mortgage servicers have been inundated by a wave of new guidelines and mandates that threaten to overwhelm their already stressed default servicing operations. Chief among these is the requirement to establish a single point of contact or SPOC for any borrower seeking to prevent loss of their home through one of many foreclosure prevention options.

With record numbers of loans in default, servicers have struggled to handle such borrower requests for assistance. In fact, one of the most frequent borrower complaints concerns their inability to get consistent, accurate information about modifying their mortgage from the variety of representatives they might speak with at their servicer. It is these complaints that have led to the SPOC requirement.

The FDIC, one of the multitude of agencies with oversight of the mortgage industry, said this as they announced their SPOC mandate:

“Having a single point of contact will not prevent all foreclosures, but it will reduce the numbers of avoidable foreclosures, as well as operational risks, associated with foreclosure processes that violate the servicers’ legal obligations.”

While establishing a single point of contact may lessen borrower frustration, it will cause a major disruption for servicers. Moving from a pooled agent contact center operation to one where the borrower speaks with one and only one representative every time they call would require servicers to quintuple their headcount. Even if enough experienced representatives could be found or new ones trained (difficult given the aggressive timelines mandated by the regulators), the costs of SPOC are almost unbearably high.

That's why Varolii has developed a comprehensive SPOC Mortgage Servicing Solution to automate most of the communications required to help move a borrower through a foreclosure prevention process while simultaneously providing them with easy, timely access to their SPOC. We estimate this will reduce demand for new headcount by 15% and could save the servicing industry $100 million per year.

Just as important, it will improve the borrower experience by proactively communicating status, next steps and any actions required on their part as they move through an unfamiliar and undoubtedly worrisome process.

In Search of SPOC - "Single Point of Contact"

by Brian Moore on June 3, 2011 in Banks/Finance, Brian Moore, Mortgage with No comments
SPOC

When I sold my first predictive dialer for collections in 1986, one of the major objections I had to overcome was that efficient use of the system required my client to abandon "account ownership" by his collectors.

In this scheme, each collector is assigned a specific set of delinquent accounts, typically numbered in the low to mid hundreds. The collector would be responsible for these accounts "from cradle to grave".

Many collections managers loved this arrangement, as it allowed them to easily measure a collector's effectiveness. All dollars collected, every account cured, every write off recovered would have been due to the effort of the collector as they were the only ones to touch their accounts.

Unfortunately, for a predictive dialer to deliver its benefits, the direct relationship between an individual collector and a specific set of accounts had to be severed. This allowed the system to dial ahead on behalf of a large team of collectors, screen out no answers, busies and answering machines, and connect the longest available collector to the next answered call. Productivity measured in customer contacts per hour increased 300-500% or more, allowing for the ratio of accounts to collector to rise to more than 1000:1.

With gains like that, only the most hard core advocate of account ownership was able to resist this compelling new technology, and the predictive dialer quickly became standard operating equipment for collections.

Fast forward 25 years, and as Yogi Berra might say, "it’s deja vu all over again". Only in reverse.

Reacting to borrower complaints about being unable to get consistent, accurate information about modifying their mortgage from the variety of representatives they might speak with at their servicer, various regulators are in the process of imposing"single point of contact" (SPOC) requirements on the mortgage servicing industry.

While the actual rules are still emerging, all indications are that at some point in the aging of a delinquent mortgage (and possibly even before the loan is past due), servicers will have to assign a Relationship Manager as the SPOC for a borrower seeking assistance with payment of their obligation. In other words, account ownership is back.

Since the predictive dialer is ill equipped to function efficiently unless any answered call it makes can be connected to any available representative, once an account is assigned to a Relationship Manager, servicers are going to struggle to use these systems to help deliver the high volume of contacts required in working through the modification process.

Enter Varolii

Our high quality, interactive voice messaging applications are more than capable of taking on the outbound contact work required. Many of the outbound calls during the modification process are made to provide the borrower with status updates or to make requests for specific documents. These calls do not necessarily require a conversation with a representative, but if the borrower requests to speak with their Relationship Manager, Varolii can facilitate a conversation with the borrower's SPOC.

Closing Thoughts

The SPOC requirements are forcing a significant and demanding change to the mortgage servicing industry at a time when they are already operationally stressed by the record high numbers of delinquent mortgage loans and the ever changing government mandated programs for borrower assistance. That said, the servicers I have spoken with say that the current system of pooled accounts is not well suited to working through the multi-stage process of loan modification and loss mitigation. Both the borrowers and the representatives are frustrated with the lack of continuity and the resulting opportunity for confusion and delay.

So servicers are actively engaged in reorganizing their processes. They are looking for solutions that will improve their productivity and hold down costs, just like they were twenty five years ago. Since Varolii has SPOC-ready applications, the only difference is I don’t have to convince them to abandon account ownership in order to help them.

Instead, I’m going “in search of SPOC”.

 

Poor Communication Paints Loan Modification Process

by Brian Moore on March 9, 2011 in Banks/Finance, Brian Moore, Mortgage with No comments

“You’re going to need a bigger boat.”

It's perhaps the best line from the best movie in the past 50 years – Sheriff Brody (Roy Scheider) to Captain Quint (Robert Shaw) in Jaws, after Brody has a close encounter with the title character, and correctly foresees that the little fishing trawler they are setting out in is not up to the task at hand.

If only those that police the mortgage servicing industry had the same sort of vision when they set up the Home Affordable Modification Program (HAMP). Expected to be a lifeline to the millions of borrowers facing imminent default on their mortgages, instead relatively few have actually been helped through loan modifications. Continue reading →