Is your Company ready to face new loss mitigation challenges for loans in the Federal Forbearance program? Are your Company’s policies, processes, personnel and technology applications adequate to meet any new loss mitigation challenges? Here are some of the questions, among others, that should be answered to determine if your Company is ready for handling loans in forbearance.
Key questions to be answered include but are not limited to the following:
- Are your Company’s loss mitigation efforts significantly comprehensive to utilize the different methods that will be considered/used for loans in forbearance?
- Is your Company prepared to work with the borrower, the loan’s investor and the mortgage insurers?
- Has the Company implemented any specific new loss mit and/or foreclosure requirements for loans in forbearance?
- Is the Company’s forbearance process aligned with the loan investors (GSEs, Ginnie, private investors), mortgage insurers and guarantors (FHA, VA, MIs)?
- Is your staff ready to handle loans in forbearance that have different levels of risk?
- Has the Company acquired any new technology apps that are targeted to loans in forbearance?
- While implementing the strategy for handling loans in forbearance, is the Company going to identify opportunities to reduce the timespan and the cost for all loss mitigation and foreclosure activities (resulting in increased operational efficiency, lower servicing costs per loan and meeting regulatory compliance requirements)?
While assessing the Company’s preparedness for handling loans in forbearance, the Company may take advantage of assessing opportunities involving servicing operational efficiency, compliance and risk mitigation in the loss mitigation and foreclosure areas. The benefit will be to identify significant impact on operational performance, efficiency and cost of such operations.
Hilltop Advisors is a consulting/accounting firm that has helped many loan servicers with their business analysis, identification/implementation of operational process improvements, evaluating the Company’s level of compliance (all types) and identifying methods to reduce the cost of such compliance and identifying ways to reduce all servicing costs. Hilltop’s consulting team has significant experience with loan loss mitigation and foreclosure for all loan types (QM loans, bank portfolio loans, non-QM loans, Reverse Mortgages, ARMs, etc.).
Our team can assist your Company with any of the following:
Loss Mitigation and Foreclosure Policy, Process, Resources and Compliance Assistance:
- assessing the Company’s loss mit and foreclosure operations (using a scope that we will jointly create),
- helping create a scope and deployment plan for changes to be made in the loss mit and foreclosure areas (and expand if needed),
- helping with making the Company’s policy changes,
- creating an Excel based tool to match the loans in forbearance to new/existing investor programs to help avoid foreclosure and to better determine the likely hood of which borrowers are going to be able to fully reinstate or perform under the new terms of the existing loan or a new loan,
- improving the level of regulatory compliance knowledge and policy documentation (to eliminate process duplication,
- strengthen the use of current technology apps (already available) and how such use can assist with streamlining loss mit and foreclosure activities,
- inventorying the number, skills and depth thereof for all servicing employees,
- creating a process and Excel based resource tool to match up the skills of the Loss Mit and Servicing personnel to the loss mitigation and foreclosure required steps needed to handle loans in forbearance based on the risk level of default and compliance (this matches skills to risks of the loans in forbearance),
- helping identify the “gap” between the available employees or consultants with the appropriate skill types to the required process steps for loans in forbearance,
- helping with the filing of Default Claims or Loss Mitt Incentive Claims,
- review interim Claim filings of loans that were in forbearance and that have now reinstated to determine proceeds that were recaptured from the borrower that need to be returned to the investor,
- assessing regulatory compliance for foreclosure process and timelines for FHA, VA and Conv loans (Hilltop was under contract to FHA for review of foreclosure claims over the last 5 years),
- helping the Company with Loss Analysis Review and support Claims filed,
- performing pre-CFPBB Exam reviews of loss mitigation with an emphasis on evaluating income and handling inquiries promptly,
- identifying necessary training for all or targeted personnel, and
- assessing the Servicing management team’s involvement,
Performance (Operational Efficiency and Cost of Servicing)
- identifying the opportunities to increase operational efficiency (policies, processes, compliance, management involvement, depth of experienced servicing personnel, use of technology and others) and calculate the cost savings to the Company,
- analyzing the current servicing cost per loan in total and specifically for the loss mit and foreclosure direct and support activities and identify opportunities in operational areas, policy improvement, direct process cost, overhead if any, use of technology, etc. – all of which can reduce the cost of these business areas.
- assessing the technology apps used in Servicing (are available tech apps being used and is the technology app version up to date with Forbearance/other compliance requirements),
- performing a comprehensive review (efficiency, cost, tech apps, subservicing, risk, etc.) in all loan servicing departments/functions.
Addressing both the loans in forbearance and your Loss Mit and foreclosure operations can result in increases of operational efficiency, improved regulatory and investor compliance, reduction of compliance, credit and other risks and decreased costs of loan servicing. Please contact our senior team (listed below) to discuss any of the comments noted herein.
Please contact Jeff Oliver at gaoliver@thehilltopcompanies.com or Mark Kline at mkline@thehilltopcompanies.com for further information
