Adapting to change: Innovation and transformation in loss mitigation

We are seeing tremendous transformation within the loss mitigation space. Remedies for distressed borrowers previously limited to bankruptcy relief have seen significant expansion through the creation of FHFA, Dodd-Frank, and the CFPB. Hardships have been expanded to include weather disasters and the COVID-19 pandemic. More recently, we have seen an extension and expansion of loss mitigation remedies with VASP and related government programs, and on the immediate horizon, many changes to Regulation X.

Meanwhile, servicing management has never been busier trying to implement these programs cost-effectively and compliantly while facing significant headwinds addressing the servicing standards set forth by the investor community—whether that be FHA, related entities, or private investors. In our history, an election has never been so pivotal to the mortgage industry in terms of the outcome. Will we be doubling down on the last four years or perhaps repealing some standards that have been put in place?

Throw the evolution of e-signing, RON, single sign-on, and cyberattacks into the mix, and your work will be cut out for you.

HousingWire spoke with Jane Kennedy, Executive Vice President of Servicing Products, Sales, and Strategy at Mortgage Connect, a leading provider of loss mitigation services, to ask how they are addressing the changes taking place.

HW: What is the most critical factor in choosing a loss mitigation service provider?

JK: There are a lot of important factors, including providing comprehensive end-to-end services and the UX experience for both the servicer and the customer. However, at the top of my mind right now, I would be partnering with someone with regulatory expertise and an experienced team to help you navigate the many changes taking place (such as VASP) and what we see on the horizon (Reg X proposed rules). Having a partner to guide you through these changes is crucial, and it is essential to have one who can help you execute effectively and on time.

What we are seeing is that servicers are looking for guidance on these changes. We have a dedicated team of compliance attorneys whose sole focus is monitoring and implementing changes as they come across and engaging with our clients when these rules are being proposed to ensure they are asking the right questions.

Clients want that extra layer of compliance, and monitoring state, local, and federal changes is a full-time job. Our team of compliance attorneys spends a great deal of their time on calls with our clients, sharing best practices. It has been a considerable value-add investing in compliance libraries, and I really think it gives a tremendous lift to our clients, who, in turn, must ensure that they have controls in place to manage these changes.

HW: What other areas of focus and trends do you see in the loss mitigation space?

JK: In today’s fast-paced world, a seamless user experience is essential. The expectation is that one system can be leveraged from order entry through disposition without touching a file. For services, this means reduced full-time equivalents (FTEs), with limited touchpoints and manual processes, improved service level agreements (SLAs), and an overall enhanced experience.

We’ve made significant investments in our FINTRAC system, empowering our clients to easily place and edit orders, manage documents, and track file statuses from start to finish. Plus, our suite of accessible reporting tools gives you the insights you need at your fingertips.

The borrower’s experience is equally vital. Our partnership with Ink’d (formerly Simply Secure Sign) has positioned us at the forefront of e-signing and remote online notarization (RON). As the industry shifts towards digital solutions, this innovation dramatically reduces SLAs and minimizes execution errors. The upcoming generation of homeowners prefers a paperless process. With our e-signing platform, they can sign documents from the comfort of their homes on their schedule—all while keeping track of their progress. The UX of this platform has a specifically designed loss mitigation module that keeps the customer engaged and fully educated on how to use the platform and expedites the signing process.

This streamlined approach not only enhances borrower communication but also improves conversion rates for our servicers and expedites timeframes. With the right e-signing platform, the servicer can streamline their borrower communication to enhance the overall process from borrower electronic adoption through finding a satisfying remedy for their hardship. We have also found this to be positive for expedited time frames and conversion rates for our servicers.

HW: How else is Mortgage Connect evolving to meet industry needs?

JK: I would say technology continues to be an increased part of the process. We are now frequently using APIs to exchange data with our clients. Leveraging standard industry integrations can be a great strategy given the complexity and challenges in data exchanges. As mentioned previously, the UX experience for both the servicers and customers are key – having a centralized platform and leveraging RON/e-signing are crucial.

Cybersecurity is a heavy focus now more than ever after the data breaches we saw in the industry last year. We participate in a very stringent program to continue to educate our staff, as it only takes one employee to make a mistake. Training is the most important front line of defense as more and more clients move toward single sign-on.

HW: What makes Mortgage Connect unique in the loss mitigation space?

JK: Our commitment to operational excellence and an exceptional consumer experience sets us apart. Our management team and front-line staff are among the most seasoned professionals in the industry, ensuring every interaction is handled with expertise and care. Execution is crucial, and we proudly boast the best track record in operational excellence.

In the realm of loss mitigation, our cutting-edge technology is designed with workflow automation, compliance, and cost savings in mind. We focus on meaningful efficiencies that benefit services and enhance the consumer journey every step of the way.

When you choose us, you’re choosing a partner who genuinely cares, and it reflects in the outstanding results we deliver.

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