Loan Servicing and Buy Back Demands

Issues of the Top of Mortgage Servicer's Minds...

Posted on Wednesday, February 18, 2009

At a recent (Feb 17 to 20th) conference and expo held in Tampa, Florida by the Mortgage Banker's Association for national mortgage servicing companies, the topics for discussion included;

Servicing government loans
Mortgage litigation;current trends and issues
Loan level analytics
Next generation servicers
Bankruptcy litigation in today's new world
Lessons learned from the credit crisis; how to build a sustainable servicing operation for the future
Leveraging technology for process improvements (from reactive to proactive)
Solving real world issues in servicing and loss mitigation
Disposition of REO properties - altruistic or standard solutions?
Multichannel customer contact strategies
Innovative payment strategies in an economic downturn
Compliance issues around loss mitigation
Focus on the economy; a regional a national perspective
Servicing reverse mortgages
New mortgage market conditions require new rules for engagement-investors, servicers and borrowers
The blending of lending-customer service meets risk mitigation
Get registered-vacant property registration strategies and updates
Transforming distressed asset anyalysis, decisioning and resolution execution via advanced analytics
Bankruptcy best practices
Foreclosure and post foreclosure challanges

Simply looking at the wide rnage of topics covered that are critical to mortgage servicers can give you a pretty good idea of how difficult their job is. Servicers are charged with keeping borrowers happy with good customer service while making sure loans get paid - clearly two responsibilities that can oftentimes clash! Borrowers seeking to stop foreclosure or obtain monetary dmages for product features are placing increased focus on servicing paractices. The sheer number of defaults has necessitated that servicers proactively manage their portfolios to prevent losses. The standard toosl of yesterday simply arent enough anymore. Servicers need new higher levels of detailed data and more sophisticated analytical models to effectively mitigate risk in thiese trying times. Models help them estimate defaults, loss of property value and fraud as well as optimize loss mitigation strategies. All this under the gun or reducing costs too! Now more than ever servicers must scour every aspect of their operations to identify processes that can be simplified, eliminated or automated. Yet at the same time, increasing customer contact is a critical (and costly) component of collections and customer service effectiveness. Talk about a Catch-22. Still the most critical challange facing mortgage servicers today is simply getting paid. Servicers need to be proactive. They're clearly looking at econmic trends that may suggest future loan performance, demographic changes that may influence servicing operations in the future, and economic factors that could influence servicing costs and profitability. According to the MBA, the application of distressed asset analytics can mitigate over $80 million in losses for every $500 million in projected losses (can you believe we're even talking in terms of such huge losses?). Believe it or not, servicers are even trying to talk about enhancing customer loyalty on top of all this! Thankfully these folks also discussed how and when a distrseed mortgage should be modified to maximize the objectives and commercial interests of the investor, servicer and borrower (yes borrower came last on the agenda). And how the potential benefits to communities and risks to taxpayers can be measured (frankly I think servicers have enough on their plate to not have to worry about that too). One new, potentially scary twist - I've been talking for over a year now about a potential growing problem with reverse mortgages. The servicers talk about the growth of the reverse mortgage loan product and new challnages and "opportunities" (we wonder for who?) that presents. Reverse mortgage growth and the slowing of real estate values thorughout the country increases the need for timely and relevant information about reverse mortgage loans.

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