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» VISIT US ONLINE @ DSNEWS.COM COVER STORY COVER STORY F See No Evil, Hear No Evil 'Early and Often Collections' The key, according to Loeb, is "early and often collections"—a phrase he credits to Lender Processing Services' Robert Caruso. It's what Loeb calls collections 101—the earlier you reach them, the better the chances of a resolution that aligns with both the borrower's and investor's interests and returns that nonperforming loan asset to "performing" status. It's not uncommon for specialized outreach operatives to finally connect with borrowers who are considered "aged delinquencies" and learn a borrower's situation has changed and the loan mod they didn't qualify for before is now a viable option, Loeb explained. Even so, he stresses early intervention as the most successful approach for the borrower, the servicer, and the investor. Ocwen has consumer psychologists on staff that help with many aspects of borrower communication, "from what we say in letters, to what we say when talking to them on the phone in a loss mitigation scenario," Faris said. He explained that certain keywords verbalized by the borrower can change the dialogue; Ocwen reps modify their words based on whether the customer is agitated or calm and rational in order to achieve the best possible results. "Dialogues are adjusted depending on what we deem as the state of mind of the customer," Faris said. "What we try to incorporate into the dialogue are certain techniques that scientists have proven will help you get better buy-in and better results. We're not trying to be manipulative . . . . We're trying to make sure we're being as effective as we can be to guide [the borrower] to a POINT— COUNTERPOINT Ron Faris, president and CEO of Ocwen Financial Corp., believes some borrowers remain apprehensive or may still be somewhat confused. "We've had customers who say 'this looks too good to be true,'" so they don't pursue it, Faris explained. "We've even found borrowers that have gone through the entire process, submitted all the documentation, and received an offer but then they don't act on the offer," Faris said. "They do all this work and then still at the end, don't pull the trigger and accept the assistance." At last year's Five Star Conference and Expo, Colleen Hernandez, CEO and president of the Homeownership Preservation Foundation (HPF), told the many representatives that were in attendance from the nation's servicing organizations that there are several reasons borrowers don't respond or reach out to their servicer. For one, when borrowers don't have the money to bring their account current, then for them, it seems pointless to contact their servicer. Secondly, borrowers don't know who to trust. With the countless scams that exist targeting struggling homeowners, Hernandez explained, it can be difficult to know who is there to truly help. And lastly, oftentimes, a borrower's problem is much bigger than his or her mortgage; instead, they need a qualified advisor who can look at their entire financial picture and help get their debt obligations under control. Even when a distressed homeowner is reached, the outcome isn't always favorable. As Jay Loeb, VP of strategic development for National Creditors Connection Inc. (NCCI), says, "It's one thing to get in contact with a borrower; it's quite a different thing to say you have borrower engagement." Loeb says if a borrower is more than 90 days delinquent and not involved in any sort of loss mitigation treatment, it's safe to say they are "disengaged." Based on that definition, industry estimates show the government alone is dealing with well over 1.5 million delinquent, disengaged borrowers when you combine the GSEs' and the Federal Housing Administration's seriously delinquent inventory of residential mortgage assets that aren't working toward a non-foreclosure resolution. BEST PRACTICES Outreach efforts have been widespread and persistent, yet some borrowers still haven't gotten the message. Residential mortgage servicers have prevented nearly 7 and a half million foreclosures since 2009, but there are another four and a half million past due mortgages currently heading to or already part of the industry's foreclosure inventory. INDUSTRY INSIGHTS or more than five years, housing counseling agencies have flooded their local communities with messages to distressed borrowers to let them know they're not alone in their struggle. Government agencies at both the state and federal level have canvased the airwaves with public service announcements, even bought space on high-traffic billboards, offering free mortgage assistance. Servicers have set up shop at city convention centers, hotel ballrooms, and small-town gymnasiums across the country to provide one-on-one support to delinquent customers. Housing counselors have manned hotlines and hosted countless foreclosure prevention workshops from coast to coast. 43

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