DS News - Digital Archives

solution. We have to ensure borrowers engage with us in the right way so we can actually help them." "It's important to make every contact count," according to Loeb. "There are so many times you need to reach out and contact that borrower, you don't want to disengage them." This point hasn't been lost on servicers. In fact, Loeb says nowadays the assignments he and his staff receive from of borrowers that haven't returned their response packages to the servicer or borrowers with loans mods that weren't executed correctly—those are very strategic populations, and we have a strategic end deliverable as our goal." Dillard says she's seeing a lot of customers who are working on their second or third loan modifications; borrowers who have experienced "It's one thing to get in contact with a borrower; it's quite a different thing to say you have borrower engagement." —Jay Loeb, National Creditors Connection Inc. servicer clients call for "very specific, very strategic borrower contact." In addition, he notes that more clients are going back to early intervention outreach and employing nontraditional contact methods such as door-knocking for accounts that are just 45 days delinquent. "For the last four years, they [servicers] have been concentrating on back-end collections, which is mitigating losses just prior to foreclosure," Loeb said. Recently, however, there has been a discernible shift from reactive to proactive loss mitigation and as a result, Loeb says servicers are seeing a "huge lift" in reducing rollover to laterstage delinquencies. Loeb also notes that the early intervention strategy is pushing borrowers to a designated single point of contact (SPOC) earlier in the delinquency instead of back to collections. Dana Dillard, chief customer officer for Nationstar Mortgage, says of the many new regulations and servicing reforms, SPOC has had the biggest impact on how servicers communicate with delinquent homeowners. Because of SPOCs, which at Nationstar are also investor-aligned, she says servicers are much more deliberate and precise in their outreach efforts, whether it's local foreclosure prevention workshops, call routers, or mail campaigns. "It affects who we market to," Dillard said. "With SPOC, we're able to identify which specific borrowers we're missing documents from or need to engage." That doesn't mean the need for outreach at the back-end of the process is eliminated, but Loeb says communication even for late-stage delinquencies has likewise become "more of an engagement." "The work we're getting now is for very specific, targeted borrower populations, specific to an end deliverable," Loeb explained. "It might be a group 44 another life-altering situation and are back for a second or third try to make additional adjustments for the latest curveball they've been thrown. Lost in Conversation Loeb contends there are a lot of lost opportunities for borrower engagement. He says there are many times that the servicer has an opening to reach out to the borrower and doesn't. He points to occupancy inspections as a prime example. Servicers have to send someone out to inspect the property as part of the standard default routine, and historically inspectors have not had any communication with the borrower, even been precluded from doing so. "It's a missed opportunity to talk to the borrower," Loeb insists, and it presents itself as one of the most effective communication models— face-to-face interaction—which typically results in big benefits for servicers. NCCI has begun a pilot program that offers clients a "hybrid" solution, a two-for-one service that converts a routine inspection into a borrower engagement opportunity. Ocwen has created an "appointment model" for borrower communication and Faris says it's been very successful. "If a borrower is delinquent and wants to explore their options, whether a loan mod or short sale or whatever it may be, we not only assign them a relationship manager, we encourage the borrower to set up an appointment with their relationship manager," Faris said. "What we try to do is to encourage the customer to do some preparation before that appointment occurs," Faris explained, likening the process to that of a visit to the doctor. "We try to do the same thing with our customers. We send them out information; on a preliminary call, we give them a sense of what the kind of things they should be prepared for at the appointment, and then we set the appointment." And according to Faris, about 75 to 80 percent of the time, the customer keeps the appointment. "By setting an appointment, we feel we get better buy-in from the customer, they're better prepared, and we're also better prepared because our relationship manager can spend some time before the appointment reviewing the customer's account history or documents they may have already submitted, and they're better able to help that customer once the appointment takes place," Faris said. Ocwen has also been very aggressive in its efforts to team up very early on with housing counselors and consumer advocacy agencies. Ocwen provides its grassroots partners with names of borrowers who have missed even one payment, and these community-based organizations assist with outreach via mailers, knocking on doors, calling campaigns, even town-hall-type meetings. "We've found this type of arrangement to be very effective," Faris said. "Many times customers are afraid or very skeptical of their servicer. They think the servicer is only there to take their home away from them, so by getting involved with counseling agencies early in the process and creating an agency relationship with them, we can provide them this information and have them go out as our agents and contact these customers." Ocwen partners with HomeFree and the National Council of La Raza, both of which have affiliates nationwide and can provide broad penetration. Specific to the state of Ohio, Ocwen works with the nonprofit group Empowering and Strengthening Ohio's People (ESOP)—a relationship Faris says has proven extremely beneficial. According to Loeb, on-site events to help struggling homeowners are also highly effective. He cites a more than 80 percent foreclosure avoidance rate at these one-on-one workout meetings chiefly because they involve both a committed servicer and a committed borrower. That 80 percent success rate is from the borrowers the servicer convinces to meet up for a face-to-face talk. From Nationstar's targeted marketing efforts to alert certain borrowers that help is coming to them, Dillard says the servicer's response rate is anywhere from 2 to 3 percent, which is a very respectable return and the general market rate for a well-executed marketing campaign, industry-wide. Nationstar participates in about 75 on-site community-based outreach events a year. Lately,

• Cover