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64 people, our P&L, our service providers, and our customers. We evaluated expensive technologies and cringed at implementation calendars. We scratched our heads. And then, we endeavored to define a series of small wins—simple changes—that have yielded significant returns. KEEP IT SIMPLE Most significant among the small wins in our new strategy was connecting our two favorite groups of lawyers—our internal legal department and our business line foreclosure/ bankruptcy attorney network (the "business line attorney network"). At many servicers, the foreclosure and bankruptcy departments carry the responsibility to manage the contested foreclosure or adversary proceedings, by leveraging the business line foreclosure and bankruptcy attorney network managed by the business. For matters that fall outside the general contested rubric, the bank's in-house legal department will review the matter to determine whether its intervention of a file is warranted—based on risk factors such as a proactive claim against the bank. If the matter meets the criteria and is escalated, then the legal department will take jurisdiction and manage the matter through their process. In turn, the legal department appropriately leverages their network of attorneys to manage these files—these attorneys are typically not in the business line foreclosure and bankruptcy attorney network and carry a multistate or national presence. Although this strategy generally works, we learned that it was not the best approach in all cases. When we evaluated our litigation expense budget and the litigated matters portfolio for default loans, we found it largely consisted of cases arising from a foreclosure or bankruptcy matter, and the crux of that litigation was residing within the foreclosure or bankruptcy matter itself—comprised of an attempt to avoid the underlying foreclosure. We realized that, instead of leaving the foreclosure avoidance matters with the business line attorney network firm managing the actual foreclosure or bankruptcy, we were moving them to another law firm—one residing in the corporate legal department network. Typically, these firms are used to charging the higher hourly rates to support the management of matters of much greater diversity and complexity (requiring independent research and time spent by associates), and of much higher operational, reputational, or financial risk to the bank. Further, when being transferred a new matter they must review the matter de novo. In partnership with our trusted legal department partners, we posed a simple hypothesis, which became a key cost savings initiative that was put into action through a pilot program wherein we believe, conservatively, that we will reduce our litigation expense budget by at least 30% for these matters within the next year. THE CASE FOR COST SAVINGS What if we leveraged the business line attorney network (the litigation department at an assigned foreclosure firm) instead of the corporate legal department network (frequently national firms, with enhanced cost structures)? Said another way, what if we did nothing and left the cases where they were? Total timeline to implement: Hours. Comprised of coordinating the right partners both internally and externally, and conducting the steps necessary for the legal department to leverage the business unit attorney network. Total cost to implement: $0 e total effort on behalf of the BU: Nothing Key factors leading to the success of this program include: » It is not only what you know, but who you know that is important in matters having a geographic origin. Default matters are sensitive, deserve compassion, and are frequently litigated in the counties and municipalities where our customers live. Banks and servicers are outsiders, and when it comes to default, especially, we are often viewed as the bad guy. Frequently, the outcome of a matter is dependent not only on the merits of a case, but also on geography, local practice, judicial disposition, judicial appointment practice, and many other characteristics tied to the community wherein they are litigated. Firms in your business line attorney network have inherent ties to the states, communities, and municipalities in which they operate. Conversely, a firm with a multistate or national presence may either hire a local attorney to achieve the above objectives (thus increasing the cost), or send a young associate to a neighboring state where they happen to have a bar card to manage the matter in an unfamiliar court—which can be detrimental and undermine the increased expenditure. Depending on the nature of your matter, choosing the business line attorney network may be your best option. » The firm in the business line attorney network has both a history with the file and a vested interest in the litigation resolving well. Foreclosure avoidance lawsuits, more often than not, arise out of an attempt by a 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.

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