Forgoing Automation is Literally Setting Servicers Up for Disaster–Clarifire CEO Jane Mason

Jane Mason is CEO of Clarifire, Clearwater, Fla.

This year’s storm season is testing everyone’s capacity to be responsive in the face of the unexpected. I know firsthand, as most of our team lives in Pinellas County, Florida, which was recently hit by multiple deadly storms.

As I write this, our streets and our hearts are torn as we all try to recover and seek assistance from our servicers and other providers.

The 2024 season kicked off with the earliest Category 5 hurricane on record—Hurricane Beryl, which struck Texas in late June. In September, Helene arrived. A Category 4 hurricane, Helene tore through the west coast of Florida with record storm surges that surpassed anything in history, then moved throughout the Southeast and devastated the Carolinas. Hurricane Milton followed two weeks later, striking the western coast of Florida and delivering record rains, tornadoes, and flooding.

We prepared ahead as best we could. The rest of the country had to anxiously watch as these storms grew in size, strength, and category. Yet on the heels of these disasters—with impacts that have yet to be fully assessed—more devastation could still lie ahead.

Handling back-to-back natural disasters is surely a terrifying experience for homeowners. It’s also incredibly challenging for mortgage servicers. And after everything that’s happened this year, every mortgage servicer should be asking themselves one question: “Do we have the right technology arsenal in place to protect our customers and our ability to deliver relief?”

Unless they are leveraging modern process automation, the answer is a definite “no.” That’s because the ability to respond swiftly and accurately to widespread borrower needs following a large-scale disaster is no longer possible through human effort and legacy solutions.

Mortgage servicers are obviously familiar with the impact of natural disasters. However, this year’s storm season is expansive in terms of hurricane volume, storm severity, season duration, and most importantly, the number of homeowners impacted. And it’s not the only challenge servicers face, either.

Servicing transfers and the sale of mortgage servicing rights (MSRs) remain fairly robust, which can create their own type of assault on borrowers when the entity servicing their loans changes multiple times after origination. Meanwhile, rising escrow costs that reflect the increasing cost of insurance and taxes and recent volatility in the U.S. economy are generating a larger pool of at-risk borrowers. And when borrowers are under immense stress, so are their servicers.

To manage these operational strains, human expertise is crucial. But in terms of efficiency and effectiveness, human effort alone pales in comparison to process automation. Without it, servicers have no hope of delivering the responsiveness, rapid relief options, proactive outreach, and education borrowers need when they need it most.

For example, following a disaster, many homeowners need loss mitigation assistance and guidance as they assess damages, file claims, wait for insurance and FEMA relief, and begin the often-lengthy repair and rebuild process. This may start with the need to pause mortgage payments and eventually involve a loan modification to help get back on track. When these processes are supported through workflow automation, servicers can manage loss mitigation workouts rapidly and efficiently, and instantly connect borrowers with the best options for their situation through self-service portals.

The same is true for managing insurance claims, assessing damages, and coordinating federal and state disaster relief programs. These processes are equally tedious for homeowners and servicers, and require a significant amount of tracking, coordination, education, and administration. With process automation, each one of these complex tasks can be united in one place, ensuring that claims, inspections, and disbursements are handled in a timely, transparent and efficient manner.

Last but not least, mortgage servicers are quickly overwhelmed by emails and phone calls before, during, and after a natural disaster. Addressing borrower needs requires timely and accurate responses across multiple areas, including relief options, managing status updates and general relief communications. Once again, workflow automation empowers servicers to deliver interactive, real-time responses and resources to distressed borrowers, so they are able to see light at the end of the tunnel.

The bottom line is that we’re all in uncharted territory when it comes to natural disasters. But for those of us who work in the mortgage servicing arena, throwing our hands in the air and surrendering is not an option. There is only one path forward, and that is constantly finding better, faster, and more efficient ways to provide homeowners with the assistance, resources, and hope they need to get their lives back on track.

Yesterday’s solutions won’t do the trick. It requires modern workflow automation solutions. And regardless of where and how you get it, there is no better way to streamline the extraordinary complexities and processes that accompany disasters than by replacing chaos with clarity.