As a part of its efforts to prevent a huge spike in foreclosures, the Consumer Financial Protection Bureau (CFPB) recently instructed mortgage servicers to ramp up their communication with homeowners who will likely need further assistance.
As of January 2021, over 2.7 million consumers were still in forbearance programs while 2.1 million consumers were in forbearance and at least 90 days delinquent on mortgage payments. As per other reports, nationwide, one in every 4,078 housing units had a foreclosure filing in Q1 2021. States like Delaware clocked in the highest foreclosure rates where one in every 1,705 housing units had a foreclosure filing.
The CFPB has urged servicers “to dedicate sufficient resources and staff to ensure they can communicate clearly with borrowers, effectively manage borrower requests for assistance, and promote loss mitigation.” The Bureau will also be holding mortgage servicers accountable for complying with Regulation X with the aim of ensuring that homeowners have the opportunity to be evaluated for loss mitigation prior to the initiation of foreclosure.
To this end, the CFPB has suggested certain steps that mortgage servicers can follow in order to limit foreclosures:
- Providing clear and readily understandable information to borrowers about their options for payment assistance:
- Complying with the outreach requirements in Regulation X to ensure that borrowers are getting needed information about loss mitigation
- Promptly handling loss mitigation inquiries and avoid unreasonably long hold times on phone lines:
- Maintaining policies and procedures that are reasonably designed to achieve the continuity of contact objectives to ensure that delinquent borrowers receive accurate information about their loss mitigation options:
- Evaluating the loss mitigation applications consistent with the Regulation X requirements to promote timely and consistent evaluations
- Complying with foreclosure restrictions in Regulation X and other Federal or State foreclosure restriction
- Complying with the Fair Credit Reporting Act’s requirements to report the credit obligation or account appropriately.
It is possible that the above-mentioned requirements may seem like a daunting task for mortgage servicers who are already struggling with huge volumes of work. Servicers will now have to design proper communication strategies to make sure that, during this crisis, borrowers receive key information about their options at the appropriate time. To handle the whole situation, they may have to appoint separate personnel to inform borrowers about available loss mitigation options.
Servicers will also have to ensure that they let their customers know the steps they are taking to see that their applications are being handled as quickly as possible. This would mean that many servicers could see record web and phone traffic which will again have to be handled.
As a servicer, you will have to be prepared to address this range of issues even as your customers continue dealing with financial uncertainty. You will have to follow the guidelines laid down by the CFPB to streamline the process and offer respite to borrowers.
This is where mortgage servicers can consider outsourcing the process of limiting foreclosures and promoting loss mitigation efforts to the right partners. By doing so, servicers can efficiently manage the timeline of loss mitigation processes, while gaining time to focus on more important business objectives.
There are expert partners who are adept at offering a full suite of mortgage services to its clients. These companies provide loss mitigation services that are designed to help servicers handle their back-end and front-end operations with seamless efficiency. They are capable of providing clients with a robust system that helps mitigate losses and retain customers.
Their services also encompass the entire process from documentation to borrower outreach – a significant element as laid down by the CFPB. These companies help servicers by providing them with steadfast solutions that are geared towards reducing mortgage losses. They offer strong support for foreclosure management services that ensure quick returns and valuable asset management. This way, servicers can reduce their operational costs and also free up their in-house resources to focus on core business activities.
These partner companies reach out to the borrowers on behalf of the servicer to understand their situation and offer solutions that can reduce their monthly payments and interest rates. This helps borrowers get back on track with their installments while helping the servicer mitigate their losses.
PrivoCorp is one such company that is prepared to lift the burden off your shoulders by offering expert assistance with loan modification and loss mitigation processes. We help servicers establish streamlined workflows to efficiently meet the rising volume of loan modification and loss mitigation demands through standardized processes. We enable services through a broad spectrum of loan modification support services aimed at efficiently discharging end-to-end requests. Our expert team of professionals engages effectively with borrowers and we provide access to advanced technology-oriented tools.
You can reach out to us to know more about how we can assist you in effectively meeting the guidelines laid down by the CFPB. To connect further with PrivoCorpf, you can get in touch at email@example.com