Tom Millon, CMB, of Computershare Loan Services on Default Loan Servicing
Tom Millon, CMB, is CEO of Computershare Loan Services US, Ponte Vedra Beach, Fla.
MBA NEWSLINK: What do you see as the biggest takeaways from the pandemic year?
TOM MILLON, CMB: During the initial onset of the pandemic, our two main objectives were ensuring employee safety and continuing to service loan transactions for our clients.
We pivoted our operational structure and modified our technology to migrate more than 90% of our employees, including those working in call centers, to a work-from-home model. This enabled us to continue providing services to our clients and manage customer inquiries while ensuring we remained in full compliance with industry regulations and safeguarded borrower data.
NEWSLINK: How are you preventing loss mitigation?
MILLON: As of this week, the Mortgage Bankers Association estimated 2.1 million Americans are still in forbearance. The question for many will be ‘what’s next?’. Our strategy for loss mitigation has three main areas of focus – forecasting, engagement and routine.
There was an inevitable increase in inquiries from borrowers who sought to understand how they were affected by ongoing events, but many understood the uncertainty and were patient while the situation became clearer for the industry. They also adapted quickly and willingly once we had rolled out additional self-help tools via our website, email and phone. These tools also enabled us to increase the amount of resources we could dedicate to helping those facing forbearance.
Forecasting: Loss mitigation begins with predictive analytics, which forecast the most likely outcome based on historical trend data with a high degree of reliability. As a result, loan servicers can better engage borrowers to help them avoid defaults and foreclosures.
Engagement: Another essential measure to help prevent loss mitigation is borrower engagement. Even before forbearance ends, early and frequent communications through text, phone, video and email can result in increased reinstatements and deferrals while counteracting defaults. Educating borrowers early and frequently on their options, including repayment, loan term extensions, payments deferrals or loan modifications, can help them more confidently make an informed decision without feeling rushed.
Routine: Establishing a routine payment helps prevent loss mitigation. While our team approach all borrowers with a sense of understanding, sometimes their circumstances are particularly sensitive. By beginning a dialogue with borrowers better to appreciate their position, it is more likely that we can help them adapt and reinstate some form of payment routine as a first step. Some borrowers may only be able to make a partial payment, and a servicer can help ascertain the amount. Once monthly payments are re-established, continuous customer communications help maintain the payment routine and identifies when the borrower is ready to move onto the next leg of their journey.
NEWSLINK: What are some challenges currently faced by the default loan servicing market?
MILLON: Over the past year, many servicers deployed staff members from their foreclosure and bankruptcy groups to help in other areas, including origination. When moratoriums on foreclosures were lifted, shifting and training resources continued to be a challenge. When the Federal Housing Finance Agency lifts its restrictions on foreclosure, the industry will need to refocus resources back into its foreclosure groups
Other challenges include improving predictive analytics, creating new customer tools and ensuring that investors’ expectations are aligned appropriately with the outcome.
NEWSLINK: What’s should the next priority for the industry be?
MILLON: Loan servicing companies face the same challenges as many other industries. During the pandemic, servicers created new operating models that kept their services running, including increasing working from home. Executive orders and temporary waivers from states and other regulatory jurisdictions enabled remote work during the pandemic. State governments and regulatory agencies will therefore determine whether these temporary models end or become permanent – or somewhere in between.
This decision will also relate to hiring and training. Computershare saw extremely high volumes of calls from customers seeking assistance during the pandemic and, as such, adapted our extensive hiring and training program to reflect this continued need as well as new working practices. Some companies may see the work from home model as an opportunity to expand recruitment beyond the location of an office.
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