Editor's note: This feature originally appeared in the July issue of DS News, out now.
Amy Neumann manages all aspects of Flagstar’s Foreclosure Operations and Oversight, including Flagstar’s Default Attorney Network. She oversees the foreclosure functions performed by multiple servicing vendors and attorneys, as well as the in-house foreclosure operations at Flagstar. She joined Flagstar in September 2015 from Trott & Trott, P.C., where she was a Senior Managing Litigation Attorney. Neumann has over 10 years’ litigation experience, specializing in mortgage banking, default servicing, and defense of regulatory compliance claims on behalf of financial institutions. She graduated with a BA from Oakland University and received her JD from Wayne State University School of Law.
Neumann recently spoke to DS News about how technology is changing the industry, the importance of disaster preparedness, and what trends to look out for in the months ahead.
What are the biggest challenges currently faced by servicers operating in the default space? For the law firms that assist them?
State compliance is getting more and more complicated and expensive. I appreciate our law firm partners more than ever as they assist us in navigating the ongoing state law changes—not only from a pure legislative aspect but especially when it comes to developing law as interpreted by state courts.
Low volumes combined with increased risk and compliance expenditures have been an ongoing issue. There is a real concern that even a modest increase in volume may be problematic across the board, as default firms have been operating within a period of austerity that has been necessary for survival. Having a plan to identify impacted loans, reaching out to customers where traditional methods may fail, providing customers with accessible (online) information related to the disaster and relief available, ensuring that customer-facing representatives are trained and kept current on disaster events—all of these objectives will provide better service to impacted customers. Time is of the essence in these situations, so appropriate measures should be in place and ready to deploy where and when needed.
How can servicers work to support borrowers through future natural disasters such as storms and wildfires?
As with any good business, being prepared and having a plan so that when disasters occur—an unavoidable inevitability—is critical. Servicers should ensure that there is a plan in place so that the only chaos they face is external, stemming from the disaster itself.
How is technology changing the industry?
Tech provides a significant lift to the overall process, ultimately resulting in the ability to build better reporting. Effective reporting produces better metrics. The data that tech yields can result in significant operational gains through strengthened transparency and controls. However, there is a cost—taking advantage of technology requires resources and investment. Balancing the cost of these benefits against competing priorities is a constant challenge.
What are the most challenging aspects of managing the interactions between servicers and their various partners?
It is so important to actively manage the communications between firms and servicers. Ongoing training and use of internal escalation protocols are imperative for meeting client expectations. Any time staff indicates that communication with a client is futile, that is a red flag that something has broken and must be addressed. In my experience, a passive management of this area leads to costly issues for both servicers and firms alike.
What are some of the most significant challenges facing the industry heading into 2020? How can servicers work together to solve them?
Cybersecurity remains a critical challenge. Technology has advanced the industry considerably, but at a great expense caused by the expense of maintaining security protocols.
Why are events such as the Legal League Summits important?
The importance of meeting the people that you rely on everyday to keep your business moving forward can’t be overstated. Discussing topics of mutual interest can garner insights and novel solutions to the latest challenges facing the industry.