DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/1388591
71 clear that servicers will be evaluated on their demonstrated ability to be proactive, work with borrowers, address language access, evaluate income fairly, handle inquires promptly, and prevent avoidable foreclosures. In fact, the CFPB has proposed rule changes to ensure servicers are ready. With numerous COVID-19 consumer protections about to expire, and almost 1.7 million homeowners who are more than 360 days delinquent, the CFPB's proposals would provide borrowers with a special pre-foreclosure review window that would push foreclosure starts out to the end of the year. ey would also allow servicers to offer borrowers suffering from COVID-19 hardships special streamlined loan modifications instead of having to explain and propose all options. While some of the CFPB's changes will impact servicers immediately, they've also moved some proposals further back. In order to appropriately address unfair debt collection practices, the CFPB has delayed the implementation of two rules originally set to take effect on November 30 of this year, moving the effective dates collectively to January 29, 2022. ese rules are designed to improve clarity and specificity around the information required when debt collectors communicate with consumers. e first rule offers more transparency around communication guidance and restrictions to prevent unfair collection practices, including harassment, abuse, and making false or misleading representations. e second rule provides information on required actions and disclosures associated with time- barred debt. Although this typically does not apply to a mortgage, the line could be plausibly breached as a part of collection efforts. WHY IT'S IMPORTANT TO ACT NOW Even if the rule proposals, extensions, and temporary guidance slow down in today's environment, servicers simply will not prevail without the right technology. Irrespective of the size of a company's default servicing team, only modern automation can help servicers achieve the velocity, transparency, and precision they need to manage loss mitigation processes and the predicted surge in foreclosures. at's why it's so important for servicers to act now. e first thing servicers should do is start organizing their data and implement process automation for all stages of default, so they are ready for any and all borrower scenarios. ey should also identify and adopt workflow technologies that ensure both flexibility and transparency to manage new rules and requirements, which will continue as we move past the pandemic. ese technologies should have the ability to centralize all borrower communications, requests, and complaints—including all past interactions—into a single view. Fortunately, with today's technologies, it's possible for servicers to implement such systems, which can also automate bulk processing and default decisioning in addition to providing borrower self-service options. at last piece is important. By centralizing customer communications and automating borrower assistance, it becomes much easier to improve response times, which is likely to keep servicers out of trouble with the CFPB. It's also easier to resolve complaints, as such technologies can apply business rules and automatically distribute complaints to staff as soon as they're received. ey can also alert staff as to what actions to take and the appropriate timeline based on the borrower's individual needs. Make no mistake, mortgage servicing is tough, and it's only going to get tougher. But for organizations that plan ahead and equip themselves with the right technologies, new rule changes don't have to create major business disruption. Instead, it offers servicers the confidence to handle any rule changes with minimal effort. Now they can put borrowers first and give them their maximum attention, which is how it should be. Jane Mason is the CEO and Founder of Clarifire. She is the original architect behind CLARIFIRE, an application that brings all parties within mortgage servicing operations together onto one secure platform and is a recognized leader in technology solutions for the financial services and mortgage industries. With over 15 years' experience in financial services technology, Mason started her career in business operations, quickly becoming an executive of an international law firm. As an entrepreneur and innovator, Mason has received numerous awards and accolades for her service in local business and the national mortgage stage. Each rulemaking scenario creates a near- term response on behalf of mortgage servicers to digest, educate, and properly implement new or changed processes, which will disrupt their ability to support distressed homeowners.