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64 a forbearance plan," said David Hughes, SVP of Contact Center for RoundPoint Mortgage Servicing Corporation, one of the nation's largest, fully integrated nonbank mortgage servicing companies. "Many customers would like to see a deferral program where their mortgage term is extended by the number of months they are unable to pay. e GSEs were already in the process of developing a deferral program when the pandemic hit and are now working to fit the needs of those impacted by COVID-19." However, Hughes added that the program won't work quite as some customers have sought, as the forborne payments won't result in an extension of the remaining term, but rather a non-interest-bearing balance due when the loan pays in full. "is could in the future introduce a hardship to customers intending to pay off their mortgage on an amortized schedule," Hughes added. COMPLIANCE CONCERNS A record number of borrowers are requesting forbearance or modifications on their mortgages, presenting numerous challenges for the mortgage servicing industry when it comes to compliance, operations, and finances. Servicers need to proactively notify and educate borrowers of any compliance or modification options and offers made, as well as any offers accepted, ongoing communications as incidents evolve, and any temporary, subsequent, and final resolutions— record-keeping that can be cumbersome at the best of times. With the surge in volume, it's even more critical to have automation in place, said Jane Mason, CEO of Clarifire. While physical letters have been essential documentation for years, the sheer volume of communications means that servicers need to be open to other forms of communication, said John Dunnery, Bayview Loan Servicing's VP of Government Loan Servicing. "e GSEs and HUD have mentioned other means of communication than by phone or letter—that's a first," Dunnery said. "ey're trying to push out there the need to contact customers in the way they normally get contacted, which is not through the phone anymore and not with the letter that normally gets trashed even before it's opened. So, the opportunity for us to develop other ways of communication and how to leverage that communication in order to get out the message to customers is something new and hopefully something that most services have learned since the 2008 crisis—how to leverage that and implement that in their systems." Even servicers who have been much more conservative with their communication practices have had to shift to "meet consumers with where they are at in 2020," using electronic communications when necessary, said Courtney ompson, SVP, Default Mortgage Servicing, for Flagstar Bank. "ere are many layers of risk infrastructure that we have to get through to get some of those [electronic] mechanisms approved and to control it appropriately." So, while technology helps cast a wide net for initial communications, follow-up call campaigns can provide consumers with more specific help, ompson said. Technology also helps because the jump in volume means that not all callers can get through in a timely manner. e call volumes, along with the rate of call abandonment (the consumer hanging up, often due to long wait times) has increased significantly in the industry during the pandemic, although ServiceMac said they have not experienced these issues impacting their customers. "We increased staffing and have strong vendor support to ensure our service levels remain above the industry standard of 80% or more of the calls answered in 30 seconds or less and our abandonment rate remains below 2%," said Sharon Zuniga, SVP, Default Operations, ServiceMac. Another compliance concern is agents who go off script on calls or in a text, Zuniga said. Electronic communications can provide customers with some information so that they do not have to wait on the phone or keep calling back. However, regulators are closely monitoring forbearance and related Information provided through websites and IVR recordings, Zuniga cautioned. "It's important that you monitor your websites to ensure the accuracy of the content as this is a source of risk concern going forward in our industry," she added. Dunnery said that Bayview helps ensure compliance by recording each call, then searching for specific keywords. e quality assurance team reviews the calls with the COVID-19-related keywords to ensure consistency, which is the hardest part of the "Many customers would like to see a deferral program where their mortgage term is extended by the number of months they are unable to pay. The GSEs were already in the process of developing a deferral program when the pandemic hit and are now working to fit the needs of those impacted by COVID-19." —David Hughes, SVP of Contact Center, RoundPoint Mortgage Servicing Corporation Cover Story By: Phil Britt

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