DS News

54 People, more than ever, are looking to their homes as something that provides peace of mind. We, as an industry, need to be prepared to do whatever it takes, collectively, to help anyone impacted by global pandemic and/or global warming-related events. We saw the industry take some of the strongest measures ever to help borrowers retain ownership of their homes during the COVID-19 recession, which I believe is emblematic of how we'd respond to any other challenges of this type that occur going forward. What are some ways climate change is impacting the industry and the way it must do business in the decades to come? Cultivating new or refining insurance products to ensure a swift response to natural disasters is certainly at or near the top. We need to be mindful of the fact that homeowners are much more mobile than ever before given the much higher incidence of remote workers in the post-COVID-19 era. Also, affected areas will likely see the need for expanded financing to cover preemptive protection for their properties, such as hurricane shutters or water conservation equipment, which very well may present new verification and underwriting challenges. How can technology best be leveraged to help predict, address, and solve these problems? With technology, we can deal with all these problems efficiently and get homeowners the solutions they require quickly. is will increase loan complexity, adding additional underwriting steps. Mortgage loans generally become more complex over time, making the use of automation more important to control costs and prevent increases in cycle time. Are there any other important aspects of natural disaster/climate change response that you think should be on the industry's radar right now? e fact that it is getting increased attention is encouraging, but we cannot lose sight of the idea that our measures must be preventive, not reactive. It's a matter of doing what's necessary to understand all potential outcomes and consequences, in order to make provisions for as many eventualities as possible. RYAN MCGUINNESS, Director, Mortgage Servicing Policy, Single-Family Servicing, Freddie Mac What are the most critical components of how the mortgage industry should prepare to respond to the waves of increasing, and increasingly damaging, natural disasters? It is important to develop and maintain a strong disaster playbook, including: • Readily available special policies and programs to address the needs of impacted borrowers • Educational resources to help borrowers to understand their options • Organizational processes for monitoring and assessing existing policies and to determine if/when additional communication is needed • Transparency with borrowers and the industry, including collaboration with other industry participants for both concept collaboration and external education on disaster program parameters What lessons have come out of COVID-19 that can be applied to natural disaster response and assisting impacted homeowners through those challenges? Freddie Mac's initial response to provide assistance for COVID-19 hardships was to leverage existing disaster solutions to the extent possible in order to provide assurance immediately that solutions are available. Adjustments were then made as necessary to account for the specific challenges presented by the pandemic. Probably the key solution that was developed to help borrowers withstand COVID-19-related hardships was the COVID-19 Payment Deferral, which has been very successful in reinstating loans for borrowers who became delinquent as a result of the pandemic but were able to resume their normal monthly payments with the help of forbearance. As a result of that success, we were able to adjust the COVID-19 Payment Deferral to create the new Disaster Payment Deferral. Interestingly, disaster policy helped to inform how we began to respond to the pandemic, and later as we worked through the crisis, pandemic policy would quickly return the favor and strengthen our disaster playbook even further. CHAD MOSLEY, President, MCS What are the most critical components of how the mortgage industry should prepare to respond to the waves of increasing, and increasingly damaging, natural disasters? Servicers and their vendors should have a plan in place before a disastrous event impacts a community. is includes plans for customer outreach, incoming customer service inquiries, vendor availability, access to properties, managing an increase in loss draft inspections, etc. Technology is also a valuable tool to identify the areas that are more severely impacted. It will allow servicers to place extra focus on those borrowers and properties in the severely impacted areas. Are there any other important aspects of natural disaster/climate change response that you think should be on the industry's radar right now? Perspective and preparation are key. As the adage goes, you must hope for the best and prepare for the worst. It is not acceptable to view operations from an "if " a natural disaster will occur point of view, but rather, you need to manage operations knowing a natural disaster "will" occur and will disrupt normal business activities. TODD PAWLINSKI, VP, Mortgage Operations Manager, US Bank What are the most critical components of how the mortgage industry should prepare to respond to the waves of increasing, and increasingly damaging, natural disasters? Plan ahead. It's easy to become complacent during an inactive disaster cycle. Develop a disaster playbook within your organization and ensure everyone knows their role in executing a response. What lessons have come out of COVID-19 that can be applied to natural disaster response and assisting impacted homeowners through those challenges? You must be agile as an organization and able to pivot in response to regulatory and Cover Story By: David Wharton

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