Clarifire Conversations

Put “good faith efforts to comply” and extended flexibility in the rearview mirror, the Consumer Financial Protection Bureau (CFPB) kicked off the month with a warning to mortgage servicers…. “Unprepared is Unacceptable”. In the first of two press releases issued during the opening week of April, the CFPB drives home their efforts to ensure servicers are ready to prevent avoidable foreclosures.

In the healthcare industry, the Objective Structured Clinical Examination (OSCE) is a cornerstone assessment method that evaluates the student competence for a range of skills and provides invaluable learner-centered feedback. The trouble with simulation-based assessments, such as OSCEs, is they can be logistically complex to administer and create large volumes of assessment data for future review. These paper-based assessments can generate endless stacked piles on the corner of a desk. These challenges make OSCEs the ideal technology adoption candidate for universities' digitized marking systems.

To say that our world was turned upside down in 2020 would be an understatement. However, as we arrive at the one-year anniversary since the enactment of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, it is the perfect time to take stock of how far mortgage servicers have come as innovative industry participants. What lessons have we learned as we’ve pressed our organizations to the extremes of their potential? What business practices helped us push through unprecedented volume and velocity, and which impaired our momentum? How has pandemic disruption forever changed the servicing landscape and how we do business?

Have your servicing operations become too comfortable with the monthly guideline extensions for foreclosure, forbearance, and/or deferment? Let’s face it there are a lot of moving parts, with overlays from disaster relief guidance, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and the Fair Credit Reporting Act (FCRA), as well as state, local, and investor requirements. Amidst extended moratoriums, Lender Letters, Bulletins, FAQs, and other guidance, there are varied areas of rolling and evolving requirements, including some obvious and some not so obvious guidelines such as:

Suppose you mash up the 300-foot drop in Millennium Force at Cedar Point with the 720-degree, triple, upside-down twist of Outlaw Run at Silver Dollar City and the 149 mph top speed of Formula Rossa in Abu Dhabi. This would give a glimpse into the roller coaster ride servicers experienced in 2020 due to the COVID-19 pandemic. The ride began on March 27, 2020, when The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law and ushered in forbearance relief for approximately 4.3 million homeowners. Despite migrating personnel to remote work, mortgage servicers rose to the challenge, and by May 10, 2020, the Mortgage Bankers Association estimated that 4.1 million homeowners had found relief.

With a vaccine in distribution and optimism for what’s to come in 2021, we all need to have our eyes wide open as we continue to navigate the unparalleled circumstances of a pandemic. The first area to watch is definitely delinquency rates. With foreclosures under federal and state moratoriums, coupled with the absence of data on forbearances and other accommodations, mortgage delinquency is more than likely the truest indicator of mortgage payment trends available. Recent headlines and metrics on the state of pandemic delinquency can be misleading given a skewed data perspective, and they will remain this way until the protections offered under the Coronavirus Aid, Relief, and Economic (CARES) Act expire. Currently extended through the end of January, we may easily see these protection deadlines prolonged again.

We can all say that 2020 will end as a year to remember, or forget. The amazing aspect is that we have survived the challenges, no matter how pervasive. The quest that awaits us in the new year is awareness, preparedness, and modernization. We need to look back, learn, look forward, and engage trusted industry partners for this challenge.

The mortgage industry has already broken origination volume records this year, with the Mortgage Bankers Association (MBA) predicting $3.39 trillion originations in total. Next year’s forecasts fall short but still indicate 2021 will rank as number two for origination volume experienced over the past 15 years. With interest rates at historic lows, the industry is grappling with both refinance and purchase business. Even as rates more than likely creep up next year, purchase volume will stay strong with the MBA forecasting that purchase originations will hit $1.59 trillion in 2021.

The mortgage industry, financial services, and FinTech arenas have all received a boost from technology during struggles to provide relief under COVID-19. Whether it be a result of the immediacy and severity of borrower needs, the scale and velocity of transactional requests, or depth of data and digitization capabilities being sought, the pandemic environment has pushed corporations to reevaluate technical innovation from every direction. As this erratic year comes to a close, it creates a very real opportunity to reinvent how you do business by maximizing the progress you’ve already made. Now you can learn how to tap into automation that can free up your organization permanently.

A new population of borrowers are requesting forbearance, amidst news of overall decreasing forbearance percentages. The Mortgage Bankers Association’s September 21st Forbearance and Call Volume Survey showed that despite a 15-week improvement in forbearance volume for the Government Sponsored Enterprises, Ginnie Mae has experienced two consecutive weeks of rising forbearance requests. Although this trend flattens for the following week, results released this week are expected to show an increase in the total number of mortgages in active forbearance, breaking the previous trend. More importantly, there is a strong indication that a new segment of borrowers will be facing a loss of income, unemployment, and/or delinquency and therefore seek relief through forbearance.

Healthcare systems have been in crisis mode for most of 2020, impacted by the pandemic and decidedly distracted with challenges related to PPE, supply chain issues, and staffing. While many struggled managing the impact, other organizations thrived.   How were they able to do that?

Workflow is defined as a systemic distribution of tasks, information, and documents to users or groups for action based on a predefined set of business rules. Exponentially adding to the power of this definition, Clarifire has been in the business of delivering high-tech automated workflow for over a decade. Starting with a sophisticated application that standardizes and simplifies complex business processes, CLARIFIRE® leverages data that is sourced through strategic industry partnerships. This relationship approach to workflow improves interoperability, accessibility, and seamless system dynamic displays powering servicer capabilities reducing timeframes, errors, exceptions, and cost. The results are compelling and represented in opportunities like one-click loan modification approvals.

COVID-19 has disrupted the lives of many, but none more so than the healthcare workers on the front lines providing patient care to those battling the virus. The Coronavirus Pandemic remains an incredibly fluid and demanding situation with ever-changing guidelines and increased safety measures. Healthcare workers have their hands full with the virus and its unpredictable effect on each patient. Add in abrupt changes in procedures, staffing scarcity, and supply deficiencies, and it becomes an exhausting environment for all involved.

With an enormous risk of exposure to COVID-19, healthcare workers are pivotal to our fight against this virus. Each day they face the risk and work under tremendous amounts of pressure, in understaffed conditions, while working around the clock to provide the specialized care needed for these very sick patients. In addition, they are often required to take on the role of both caregiver and family surrogate, since loved ones can’t be there for support.

As mortgage servicers continue to juggle pandemic relief, we find ourselves in the midst of an unusually overactive hurricane season. If you add extensive disaster relief on top of COVID-19 relief, we could see a real cascading effect as homeowners and servicers are hit with the complexities and rapid pace of changing relief programs, as well as further degradation from the employment and economic impact in areas hit by both. The National Oceanic and Atmospheric Administration (NOAA) reported a record-breaking number of storms, with the count at nine before August and 13 formed storms before September. A normal full season only produces an average of 12 named storms. The forecast for this season includes seven to 11 hurricanes with the possibility of the total storm count hitting as high as 25. The U.S. Secretary of Commerce, Wilbur Ross, remarked, “This is one of the most active seasonal forecasts that NOAA has produced in its 22-year history of hurricane outlooks.”

As the summer concludes and many homeowners are preparing for ongoing lifestyle changes under COVID-19, September holds another challenge for mortgage servicers. Approximately 2.2 million mortgage forbearance agreements are set to expire next month. Despite decreasing numbers of homeowners in forbearance, from 8.55 percent reported in early June to 7.8 percent as of July, the domino effect of forbearance roll-off cannot be underestimated. Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, homeowners can request a 180-day pause in making their mortgage payments, with an additional 180-day extension also permissible. Many servicers are trying to manage distressed homeowners in 90-day increments in order to stave off the longer-term impacts of non-payment on both the servicer and the homeowner while adding to the number of mortgages set to roll off of forbearance. Are you prepared?

Mortgage servicers continue to be subjected to overwhelming obstacles as COVID-19 has spun record low delinquency rates into record highs. Attempting to address overburdening requests for relief from distressed homeowners that have lost or fear losing income and/or employment, servicers struggle to stay abreast of day to day challenges. While staff work remotely, servicers have had to implement a new wave of regulatory and investor requirements, amidst the onset of this year’s hurricane season, and record low interest rates producing portfolio inquires and runoff.

Have homeowners grown accustomed to mediocre service when they reach out for assistance from their mortgage servicer? Not in the least - today’s customers not only want the next generation of service, but they also need it. With approximately 4.7 million mortgages in COVID-19 forbearance at the peak back in May, assisting homeowners as they transition back to regular payments and/or seek the next phase of payment relief, is gearing up to be another immense undertaking.

It is hard to imagine that we are approaching the three-month mark for working under COVID-19. Keeping up with industry change as we continue to grapple with pandemic disaster has kept us all on our toes, from the Coronavirus Aid, Relief, and Economic Security (CARES) Act to CFPB guidance to regular investor updates. Now more than ever, vendor partnership is an essential component to success. It's important to partner with an experienced, nimble innovator that can understand your unique needs, in addition to managing the ongoing maze of regulatory guidance.

While some hospitals prepare for a second wave of the COVID-19 pandemic, others have not yet reached the peak of the curve. In either case, hospitals are reopening non-essential services as states start various stages of reopening America.  With an ongoing pandemic, what are the considerations?  Will patients feel safe enough to show up for their care?  Many people continue to be reluctant to return.  Undoubtedly, it will take more than reassuring messages about safety and process, especially with contradictory information from friends or family on social media. In most cases, until an organization has demonstrated safety measures, the patient volumes will remain decreased.  What can hospitals, surgery centers, and other medical facilities do to mitigate patient fears?

Self-quarantine resulting from the Coronavirus (COVID-19) pandemic has propelled the industry into an entirely different mode of doing business.  With barely two months passed since the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted, mortgage servicers have been thrown into a tailspin.  Experiencing what many businesses have in the face of COVID-19, mortgage servicers now have their entire staff (for the most part) working from home, and all customers sitting at home as well trying to make contact for relief services.  The exception is that not all businesses have customers receiving a pass to not make payments, while also having to foot the bill for nonpayment.  Plus, the regulatory bodies have each issued and continue to update “temporary flexibilities” that require understanding, implementation, and tracking. The cherry on top is that mortgage servicers are now expected to ensure their customers all transition to a secondary relief plan, either six months in or a full year later, that at this juncture, is loosely defined at best.

A record number of homeowners have taken advantage of COVID-19 related forbearance, pushing the percentage of mortgages in forbearance up to 7.54 as of April month-end. The real concern today is that the disposition of these loans at the end of forbearance is extremely unclear. Under the Coronavirus Aid, Relief, & Economic Security (CARES) Act, impacted homeowners who have federally backed mortgages can access up to 180 days of forbearance relief with the possibility to extend for an additional 180 days. The current industry concern is that details surrounding what happens when forbearance ends are extremely unclear, which may leave many financially stricken borrowers who took advantage of a COVID-19 forbearance in a precarious situation.

As servicers grapple with the numerous temporary “flexibilities” and “accommodations” that have been recently issued, accurately adhering to credit reporting requirements under COVID-19 may create long term issues for servicers, credit reporting agencies, and consumers. The credit protection offered under the Coronavirus Aid, Relief, and Economic Security Act (CARES) is fairly nuanced from an implementation perspective and will require significant attention to requirements, implementation, and reporting.

The extensive suspension of elective surgeries due to the COVID-19 pandemic has undoubtedly resulted in a significant economic hit to the orthopedic segment of the healthcare industry. There is no question the onslaught of the backlog will be stressful. But where do organizations even begin?   

With skyrocketing unemployment, which will invariably lead to more delinquencies, consumers will have access to credit reporting relief under the Coronavirus Aid, Relief, and Economic Security Act (CARES) enacted on March 27, 2020. By modifying the Fair Credit Reporting Act (FCRA) and Regulation V, under Section 4021 of the CARES Act, protections have been put in place for consumers that need temporary “accommodations” due to the personal impact of COVID-19 on their livelihood.