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» VISIT US ONLINE @ DSNEWS.COM 57 of utilizing data to prioritize proactive engagement. "With the continuing maturity of the mortgage and credit data landscape, servicers have and must continue to evolve in how they utilize this data," Williamson said. is includes maintaining up-to-date information about a borrower's other credit history, including auto and credit cards. "ese pieces of information, if utilized properly, can provide early signals about a borrower's risk of default or the severity of the default when it happens." Monitoring these factors provides servicers with the chance to reach out and better coordinate strategies or counseling opportunities. PROVIDING HOPE IN DIFFICULT TIMES "Both Carrington's lending and servicing business are tilted toward underserved borrowers," said Raymond Brousseau, President of Carrington Mortgage Services. "Dealing with borrowers that are on the cusp of default or who have the propensity to default is something we're very familiar with." Brousseau described the typical Carrington customer as an average, middle- income American. However, for many such ordinary Americans, Brousseau points out, an unexpected expense such as a blown hot-water heater or a popped tire can be the only thing between paying their bills on time or falling delinquent. "When a borrower is struggling, it's important for them to feel that they have hope and that they have the opportunity to solve their problems," Brousseau said. "An automated website isn't going to provide that, but talking to a loan counselor who can understand their issues, and talk to them about ways to solve those problems is critical. at borrower comes away feeling like, 'I might be able to get through this.'" Radian's Connally underscored the importance of providing delinquent borrowers with all the information they need about their available options is crucial. is can include mediation or other strategies to move those loans through the process quickly, especially in states with longer foreclosure timelines. Hughes said that having a servicing system that relays information to staff quickly and clearly is vitally important when dealing with confused or worried borrowers who may not fully understand their options. "It does no good to overwhelm borrowers with unnecessary information or prolong a discussion to reach the objective," Hughes continued. "It is also crucial to manage borrower expectations honestly. Even if there is bad news to deliver, they will appreciate hearing the truth, along with helpful options and next steps." Hughes also emphasized the importance of speeding up the decision-making process. "If your borrower applies for assistance on day one, do your best to trim the process cycle time down and fast-track the review time," Hughes said. "Bottom line—borrowers are more apt to work with and trust lenders/servicers that communicate with transparency and speed." Where possible, Williamson advised that servicers establish a single point of contact (SPOC) structure, "so that borrowers can have a personalized interaction, and they don't have to continue retelling their story to multiple parties, adding to the stress and frustration of the situation." He also recommended having a robust system, strong loss mitigation and call center specialists, and a comprehensive training program for all involved personnel. at way, if a handoff must occur, "the receiving specialist is armed with the history creating a more connected experience for the borrower." ompson told DS News that Flagstar keeps a strong focus on the first 60 days of default. "Once a borrower goes over that 60-day mark, when they owe three mortgage payments to the bank—the average American just doesn't typically have that amount of money available in their checking account, and they have a much more difficult time catching up." She added that, beyond that 60-day point, the commitment to communication remains, but the tenor and tone of the conversation, and the potential borrower end goals, shift. "We know that that's a sensitive time period, because circumstances are much trickier with the borrower's ability to repay and the bank's ability to help. Because of this, we try to be even more cognizant of our words and our approach. We try to focus on the borrower ability to repay the obligation with our language, like shifting from the word 'home' to 'property,' but still try to be as sensitive and as human as possible." When dealing with delinquent borrowers, ompson said Flagstar operates on a "ree Rs" system—reinstate, repay, refer to loss mitigation. "Our initial focus is pure—to try to get the customer to bring the loan current through reinstatement, and if access to funds- now is an issue, we talk the customer to a solution that they can afford on the short term to make up for missed payments—maybe they can make a payment and a third for the next three months." e process then shifts to the final R: referral to loss-mitigation. At this stage, sensitivity, empathy, and borrower engagement can be more crucial than ever, and ompson revealed that keeping borrowers current with Flagstar is so important that its collection team is incented to work with borrowers to apply for loss-mitigation programs. Williamson told DS News that, although Fannie Mae always encourages a borrower to contact his/her servicer early, if a servicer can provide accessible and robust self-service tools and educational resources for loss mitigation options, this can help the borrower understand his/her available options and prevent misinformation. A servicer's mobile application can often be a great avenue to deploy some of these self-service tools and educational resources. Brousseau said that for Carrington's servicing business, "our associates know that the number-one job is to keep the borrower in their home." With that goal in mind, the company communicates with borrowers early and often, reaching out as early as when the borrower is only 10 days later on their payment. "ose conversations are open, non- threatening, and helpful," Brousseau said. "If you establish that kind of relationship at the very beginning, the borrower is more likely to talk to when things get difficult." THE TECHNOLOGICAL FRONT While the shape and speed of innovation are apparent on the origination side of the business, the ways technology is changing default servicing are often more practical and less glamorous—but no less important. However, Chappell observed that the low-volume environment can often make it difficult to justify the expense of innovating in "Talking to a loan counselor who can understand their issues and talk to them about ways to solve those problems is critical. at borrower comes away feeling like, 'I might be able to get through this.'" —Raymond Brousseau, President, Carrington Mortgage Services

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