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Five Star Conference: Mortgage Servicing Challenges & Government Insights

FSC2020_Logo_300x200The second day of the 2020 Five Star Virtual Conference began with an emphasis on the mortgage servicing landscape’s current state and what the coming months could offer.

Ann Thorn, EVP and Chief of Operations and Servicing at Caliber Home Loans, observed that the stress of the pandemic created a new sense of union as lenders and borrowers “banded together a lot more than we have in the past.” And while the current crisis has only been in motion for a matter of months, Thorn admitted “for servicers that have been on the front lines, it felt like a long time—and the first few months were very difficult when trying to explain to our customers what is going to happen.”

Wes Isley, Senior Managing Director at Carrington Holding Co., noted that servicers managed to maintain high levels of quality customer service while undergoing their own operational difficulties.

“During this crisis and its peak call volumes, we moved from centralized call centers—which we never would have thought of—to work in from home,” he said. “And we did that in a week and a half—the industry as a whole. You didn't hear stories about major problems.”

Robert Caruso, CEO at ServiceMac LLC, gave kudos to the vendor community for supporting servicers during this unprecedented period.

“They were looking at things and trying to monitor it,” he observed. “The technology enhancements that had to be done to help meet the COVID components were done quickly and efficiently by the vendors. I was thrilled that we got it done so quickly and were ready for it.”

Scott Arnold, SVP at Wells Fargo, recalled that servicers spent much of early pandemic weeks trying to absorb shifting rules and mandates, adding that “keeping up with it was a challenge.”

John Dunnery, VP at Bayview Loan Servicing, observed that this situation ran against the basic tenets of mortgage servicing.

“For most servicers, change is not a good thing,” Dunnery said. “We want changes locked down. We don't want changes to go on and on as we're trying to implement and be compliant with the rules and regulations that are coming out.”

Still, Dunnery gave praise over the manner in which “servicers have been able to be nimble and have been able to address most of the regulations and rules that come out.” At this point in time, Dunnery noted that most servicers are trying to maintain contact with borrowers.

“We're building into our servicing systems an array of ways for us to track those customers,” he continued. “First off, are they impacted by the COVID pandemic? If they are, are we making sure that we have that noted in the servicing system? Are they experiencing financial hardship? Do they need that forbearance and for how long being done as well?”

The conference’s second day also included input from officials at the U.S. Department of Veterans Affairs, Ginnie Mae, Freddie Mac and Consumer Financial Protection Bureau regarding the policies, programs and procedures within their respective offices. Brian Montgomery, Deputy Secretary of the Department of Housing and Urban Development (HUD), made a special appearance before the conference to detail the work of the Federal Housing Administration (FHA) during the ongoing pandemic.

“In the current pandemic, FHA was able to build up their reserves to arguably the highest amount ever in the last actuarial review, close to $109 billion of what we call MMI capital. And even in our most recent report to Congress, we’re still showing that the reserves made strong. I know folks were talking to us about lowering premiums and all that. And it's easy to be a Monday morning quarterback. But it's good that we didn’t.”

Montgomery added that both FHA and Ginnie Mae possess the capital “it will take to weather the storm,” noting the agency is also working to focus on non-pandemic crises including responses to recent hurricanes, as well as the regular day-to-day operations that were never put on hold during this period.

“In a lot of different ways, FHA and HUD needs to be there for Americans, certainly during the good times but even in those times that are more challenging,” he said.

You can see all our Five Star Virtual Conference coverage by clicking here.

About Author: Phil Hall

Phil Hall is a former United Nations-based reporter for Fairchild Broadcast News, the author of nine books, the host of the award-winning SoundCloud podcast "The Online Movie Show," co-host of the award-winning WAPJ-FM talk show "Nutmeg Chatter" and a writer with credits in The New York Times, New York Daily News, Hartford Courant, Wired, The Hill's Congress Blog and Profit Confidential. His real estate finance writing has been published in the ABA Banking Journal, Secondary Marketing Executive, Servicing Management, MortgageOrb, Progress in Lending, National Mortgage Professional, Mortgage Professional America, Canadian Mortgage Professional, Mortgage Professional News, Mortgage Broker News and HousingWire.

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