New CFPB Guidance has Loan Servicers Rethinking Communication Strategies
On April 1, 2021, the Consumer Financial Protection Bureau (CFPB) issued a Compliance Bulletin titled “Supervision and Enforcement Priorities Regarding Housing Insecurity”. The bulletin provided guidance on efforts that mortgage servicers should make for contacting borrowers at risk of foreclosure and needing assistance due to the economic effects from the COVID-19 pandemic. Since federal foreclosure moratoriums will expire at the end of June and a high number of forbearances are set to be lifted later in the year, the bulletin urges mortgage servicers to be proactive in order to avoid a wave of foreclosures that could likely be avoided with efficient communication practices and loss mitigation assistance. The CFPB emphasizes that communication is crucial, and mortgage servicers need to take extra steps to adequately contact and respond to homeowner requests.
In the bulletin, the CFPB indicated it would be increasing oversight and calls for mortgage servicers to devote specific staff and enough resources to effectively manage accounts that require loss mitigation assistance – from homeowners exiting forbearance to those that are delinquent but not in forbearance. As such, it is a good time to look for a provider that can help with reaching out and responding to borrowers behind on payments and requiring further assistance. A combination of technology, automated processes, and experienced staff will be essential. To obtain compliance in a cost-effective way, mortgage servicers should look for remediation providers that that offer the following capabilities:
Automated tracked mailing processes: When sending important time-sensitive communications, regular mail and email are insufficient. With the surge of mailings on the horizon, mortgage servicers need to look for a provider that deploy automated processes equipped to handle large amounts of mailings each day. The CFPB strongly suggests that these communications should be tracked via an overnight delivery service like FedEx or UPS. When dealing with USPS, look for a provider that offers tracking with priority delivery. While automation is necessary based on sheer volume, other benefits include discounted rates and delivery reporting. A superior automated process will also recognize remote areas that do not accept overnight delivery and default to a backup process, like USPS priority mail. When receiving official mail, there is a greater chance the borrower will open and read the contents. All of this will help with managing large volumes of applications and proactive communications about loss mitigation assistance.
Reputable customer service centers: This will be a key asset for managing calls, emails, and other communications from homeowners about the status of their mortgage and options to avoid foreclosures. Look for a provider with skilled agents spanning over several locations and offering multiple language preferences. Other key attributes mortgage servicers will want in a customer service center include professional equipment, advanced technologies, customization options, call recordings or transcriptions, and sound security protocols.
A skilled vendor can help mortgage servicers complete tasks like processing applications or responding to calls more efficiently and effectively during a time where becoming overwhelmed and failing to adequately communicate with borrowers is a real risk. Proven consistent workflows will help with communication efforts and will undoubtedly lead to the ultimate goal of fewer foreclosures. A few factors the CFPB indicated that it would review include providing clear information to borrowers, proactive measures, telephone hold times, contact continuity, and evaluation timeliness. The CFPB will take the measures a company expends for managing loss mitigation into account when determining if there have been any violations. Partnering with an experienced provider that deploys sound technology-based processes is the answer to achieving compliance and avoiding CFPB violation investigations
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