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62 I N D U S T R Y I N S I G H T / C O U R T N E Y T H O M P S O N Strategic outsourcing of foreclosure avoidance matters can yield significant returns in a low- default environment. With default volumes reaching historical lows, servicers nationwide are looking to get their houses in order by enhancing control environments, tightening processes, and redesigning or implementing new technologies to manage operations more efficiently while mitigating the risk to scale quickly in the next market downturn. While there is a massive push in the industry to tech-up with process automation, artificial intelligence, robotics, big data solutions, and the latest and greatest workflow tools, the cost to implement is high, the business requirements are complicated, and people with the right skills required to implement them are either nonexistent or in excruciatingly high demand, especially with the default workforce steadily shrinking to meet operational bottom lines. We have learned through trial and error that sometimes the high cost of technological enhancement is the best answer. For instance, after conducting a deep dive into all of the available end-to-end loss mitigation options for better consistency and control in the loss mitigation workflow, Flagstar was unable to find a solution that met our goals. As a result, we are committing substantial resources to build a proprietary tool that will be nimble enough to keep up with the bank's conservative perspective on loss mitigation requirements, while maintaining the quality of a thorough evaluation with a robust audit package to meet regulatory needs in advance of a request. We anticipate that our solution will eliminate 10 days from the final conversion process but remain so user-friendly that even I could underwrite a loss mitigation application. LEARNING FROM THE BEST In the stability that a lower volume environment created, the Flagstar default team was permitted the luxury to swap our jackets for cardigans and slippers and took the time to develop better solutions to manage our bottom line. Taking a page out of philosophical history (also a luxury in the mortgage servicing business), we leveraged Occam's Razor and tried our best not to overcomplicate it. Academically credited to William of Ockham, a 13-14th- century friar, philosopher, and theologian, Occam's Razor supposes that the best strategy among competing hypotheses is the one with the fewest assumptions. Others agree. Aristotle is first credited with the idea that, when capturing the inherent value in the simple solution, "we may assume the superiority, other things being equal, of the demonstration which derives from fewer postulates or hypotheses." e forefather of infectious disease, eodore Woodward, once stated, "When you hear hoof beats, think of horses, not zebras." Albert Einstein's perspective? "Everything should be made as simple as possible, but not simpler." Said another way, the simplest solution is often the correct one. e best news? We found that adopting this strategy in default servicing operations is a veritable gold mine. We looked at the rules, the

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