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All Eyes on Risk

About 1.4 million homeowners are still in forbearance and all eyes are examining the possible risks. Servicers have shouldered much of the risk over the past year, earning a place in the industry spotlight as forbearance volumes soared. They bobbed and weaved to comply with regulatory and market changes and managed high volumes of borrower inquiries through multiple borrower contact points. Investors and lenders who rely on sub-servicers have also kept a close eye on their risk, particularly in fear that their sub-servicer may not be equipped to manage the high-touch level of care that borrowers require as they exit forbearance plans.

In the midst of this, Ginnie Mae’s evolving pooling rules for RPLs have spurred a run on the lucrative early buyout (EBO) market with benefits that include mitigating ongoing P&I losses and balancing DQP ratios. Holders, however, need an airtight servicing strategy to cure these loans. Dave Vida, a mortgage industry veteran and EVP of Business Development at Computershare Loan Services (CLS), states, “EBO buyers need to ensure they are adequately staffed to manage non-performing loans and are prepared for changing market conditions. This includes having the proper level of expertise to manage a surge in loss mitigation.”

CLS is a leader in sub-servicing and supports re-performance along the entire EBO lifecycle. Their strategies protect client assets and generate returns with an average six-month FHA cure rate of 53%. CLS’ due diligence process identifies risk across five categories (borrower information accuracy, borrower cooperation, payment history, loss mitigation status, and foreclosure & bankruptcy status), so clients can anticipate their expected return.

Readiness Makes the Difference
COVID-19 undoubtedly challenged the mortgage industry, but most servicers were able to adapt quickly. The J.D. Power 2021 U.S. Primary Mortgage Servicer Satisfaction Study reported a slight lift in borrower satisfaction from prior years—partly because of high satisfaction rates among borrowers who participated in forbearance programs. For example, CLS’s configurable systems and tools assisted borrowers with forbearance requests in real-time through skill-based routing. They took every measure to ensure borrowers could easily access their forbearance plans and understand their repayment options. At the height of the pandemic, they responded to more than 100k borrowers seeking pandemic-related assistance and, because of their high-touch engagement, 86% of borrowers on forbearance plans exited successfully, as of September 10th.

Future-Proof Your Business With the Right Partner
Lenders and investors need progressive, client-centric partners that drive innovation and keep the borrower at heart. With more than $40 billion in UPB boarded annually, CLS shows no signs of slowing down. They are committed to helping clients reach their goals—no matter the challenges ahead. There is no question there will be a wave of default, but their goal is to make that wave as small as possible. Their comprehensive managerial oversight, enterprise risk management (ERM) control environment, proactive client response model, and operational strategies, partnered with their commitment to the borrower experience, set them apart. Kelly O’Bannon, servicing industry expert and CLS’ EVP of National Servicing Sales, states, “Our core servicing platform complies with changing investor loss mitigation guidelines and adapts to borrowers’ preferred method of communication. Whether it’s online or on the phone—we’re ready to help.”

Computershare Loan Services (CLS) has 18 years of experience protecting clients’ portfolios. With deep roots in default sub-servicing and proprietary loss mitigation technology, their solutions evolve as the market changes. CLS operates as a Tier 1 Ginnie Mae and Federal Housing Administration (FHA) servicer. They are approved by Freddie Mac, Fannie Mae, the U.S. Department of Agriculture (USDA), and the U.S. Department of Veterans Affairs (VA). Recent ratings from Moody’s, Fitch, and S&P agree that CLS’s continued investment in management, servicing, and growth models offers clients and borrowers a better experience. Additionally, they continue to earn Freddie Mac’s Servicer Honors and Rewards Program (SHARP) award and Fannie Mae’s Servicer Total Achievement and Reward (STAR) Performer recognition year over year.

Catch up with Dave Vida and Kelly O’Bannon at MBA’s Annual Convention & Expo. Or, email them at CLSsales@computershare.com.

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Computershare Loan Services (CLS) delivers solutions that help companies succeed in today's market, propelling clients toward growth at each stage of their business' evolution.
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