The outlook for the mortgage industry, including the future of loss mitigation, was the background for the Five Star’s recent Government Forum in Washington DC. Keynote speakers and panelists enlightened attendees on what to expect from rising interest rates, declining housing inventory, the quest to attract millennials, all the while managing to a purchase-centric market. Afternoon panel discussions focused on servicing specific scenarios to include what’s next for loss mitigation and the challenge of property preservation.
The future of loss mitigation is tightly coupled with the sunset of the Home Affordable Mortgage Program. Created in 2009 to assist defaulting borrowers, HAMP provided nearly $10 million in relief to consumers. In the post financial crisis era, delinquencies and default have normalized considerably thanks to HAMP. The initiative however highlighted a genuine deficiency in the industry’s ability to assist borrowers when their capacity to pay takes a change for the worse.
Panelists addressing “What’s Next: The Future of Loss Mitigation” included Laurie Maggiano, Servicing and Secondary Markets Program Manager for the Consumer Financial Protection Bureau, Prasant Sar, Manager of Servicing Policy and Asset Management for the Federal Housing Finance Agency, Kevin Cooke from Altisource Portfolio Solutions and Ed Kramer of Treliant Risk Advisors. Moderated by Julia Gordon, Executive Vice President of Community Stabilization Trust, who led an engaging discussion of what the agencies are doing to support borrowers post HAMP and what are the various modification scenarios developing as a result.
HAMP lessons learned are a critical component of developing future modification guidelines. Important areas called out during the forum included earlier communication with borrowers on payment options and leveraging the growing availability of data and technology. These areas will help to mitigate risk and improve efficiency through workflow, as well as flexible waterfall workout modeling.
Notably, the industry is working collaboratively, beginning at the agency level, to ensure consistency amongst servicers in process operations and documentation, both of which will be improved with expanded communication, workflow and technology.
Preparing for the next iteration of loss mitigation guidelines will continue to impact already stretched servicing resources. Additionally, amidst industry focus on consistency and consumer accessibility, servicers are seeking to purchase loss mitigation solutions to quickly and easily implement changes. Choosing an automated workflow solution with a flexible workout and business rules engine will keep your organization nimble.
Jane Mason, Founder and CEO
Jane has applied her vast experience (over 25 years) operating process-driven businesses to successfully redefine client-focused service. Jane has worked with expert programmers to apply cutting-edge web-based technology to automate complex processes in industries such as Financial Services, Healthcare and enterprise workflow. Her vision confirms Clarifire's trajectory as a successful, scaling, Software-as-a-Service (SaaS) provider. A University of South Florida graduate, Jane has received many awards related to her entrepreneurial skills.
