How Do Servicers Outpace Rising Foreclosure Activity With Mounting Oversight?

Have you seen the latest foreclosure stats? The picture they paint isn’t a pretty one. The June 2022 U.S. Foreclosure Market Report shows an increase of 219 percent for foreclosure starts over the past six months! Other foreclosure activities, including filings, default notices, auctions, and repossessions have increased by 153 percent compared to last year. We are fast approaching pre-COVID foreclosure levels. Although you may remember those numbers as industry lows, this is not the same economic or interest rate environment. Many consumers are only now beginning to recover from pandemic impact, but rising inflation is making it more and more difficult to transition to normalcy.

The extent of relief measures that mortgage servicers must pursue and track clearly is not easing. With foreclosure activity continuing to rise, oversight agencies, including the Consumer Financial Protection Bureau, persist in keeping a watchful eye on post-pandemic relief efforts to ensure servicers don’t lose their focus on loss mitigation. This keeps the pressure on to effectively respond to distressed borrowers and, most importantly, maintain solid default servicing practices that are automated, support complex modification options, and include a thorough audit trail of your efforts.

How do servicers stay ahead of rising foreclosure activity with mounting oversight? Implementing a sophisticated and concise risk plan is vital to helping borrowers avoid foreclosure, documenting efforts, and simultaneously managing servicing costs. Here are our top four suggested areas of improvement to minimize the risk of foreclosure exposure:

1. Automate modification processes – Modern process automation powers servicers’ capabilities to tap data and complete complex workout decisioning across the organization. By incorporating smart logic delivered via a SaaS application, servicers immediately gain results, as well as the agility to modify servicing processes, coupled with robust workout underwriting when and where needed.
2. Automate pre-foreclosure loan analysis – Review critical data and events prior to foreclosure communication and filings. Gain new competencies allowing servicers to analyze borrower scenarios at the onset of default, in bulk, preventing foreclosure action, while automating decisioning for superior quality control.
3. Respond to distressed borrower needs – The CFPB, as well as federal and state agencies, want to make certain consumer demands are quickly and thoroughly addressed. Providing 24/7 self-serve access that supports inquiry, application, no-touch eligibility determination, and completion of workout options is essential. Mobile accessibility is also a key component of ensuring today’s consumer requests are rapidly satisfied.
4. Add visibility into operational activities, timelines, and exceptions – Putting innovative, smart processes in place only fulfills part of the risk requirements that oversight agencies seek. Servicers need traceability. This means exceptions are dynamically displayed on dashboards so issues can be immediately addressed, timelines are visible to pre-eminently ensure regulatory requirements are met, and all activities are tracked to meet critical management reporting and oversight needs.

Preparing for the next phase of loss mitigation and default is at the forefront of every servicer’s risk plan. The pandemic pushed the entire industry to embrace automation and expanded remote access for consumers. However, many servicers have yet to truly modernize their approach to loss mitigation and borrower access, from sheer volume overload. Don’t wait to find out what’s next. The CFPB is using data to double-check your efforts to manage consumers who continue to exit forbearance, which will logically roll into your ability and capacity to help consumers avoid foreclosure in a volatile economy.

Modernize Your Processes with CLARIFIRE®

Start modernizing your loss mitigation processes today with a proven, experienced partner, Clarifire. Delivering a demonstrated, dynamically smart, automated workflow application, CLARIFIRE has revolutionized business process automation, beginning with the Great Recession, strengthened through the post-financial crisis, and fully modernized at the onset of the pandemic. CLARIFIRE replaces old-school workflow with process automation that is intelligent, transparent, and has far-reaching flexible capabilities. We provide innovation that is specifically designed to meet today’s requirements for success, implementing automated workout relief eligibility and loss mitigation options in seconds. CLARIFIRE is a cloud-based process automation application powered by a versatile business decisioning engine. Servicers are able to meet foreclosure demands, supplying a seamless servicing experience comprised of self-serve workout options available to borrowers 24/7.

Don’t wait for the next wave of foreclosures or iteration of oversight and enforcement. Modernize your business in 2022 with CLARIFIRE and experience truly seamless servicing. Contact us at 866.222.3370 or visit us at eClarifire.com. Let us show you how to future-proof your organization with BRIGHTER AUTOMATION®.

Jane Mason | @janemasonceo

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.

 

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