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How Servicers Can Assist Struggling Borrowers

Editor's note: This story originally appeared in the November edition of DS News.

Steve Bailey, Senior Managing Director and Chief Mortgage Operations Officer at PennyMac Financial Services, Inc.,  has held a variety of roles and responsibilities since joining PennyMac in 2010. He is responsible for directing Loan Servicing and Portfolio Strategies. PennyMac has grown its servicing portfolio from $2.5 billion to over $388 billion during that span. Before joining PennyMac, Bailey served in a variety of executive and leadership positions at Countrywide Home Loans and Bank of America.  

The hot topic in servicing right now is the impact of COVID-19 on the industry. While foreclosure moratoriums and forbearances help homeowners stay afloat, how can servicers prepare borrowers for when these measures eventually lift? 

It’s really all about providing notification to homeowners and staying involved in the loop of information with investors and government entities because the rules are not fixed. I think as we come up across each new hurdle, communication is key as there is some amount of nuance that gets addressedIn order to have the right answers for your homeowners, servicers need to remain. Communicating with the borrower involves emailing, texting, calling, placing messages on your company website, standard lettersanything you can do to get people to understand what's next for them. 

What common questions do you receive from borrowers trying to understand the guidelines surrounding their loan forbearance 

I think the two most important issues right now are 1) how to address your forbearance approaching expiration and 2)  what to do if they need more time. When this occurs, it’s important that people understand they really need to deliberately ask for it. So again, whether that's a phone call or going onto a website, borrowers need to be proactive or their loan will come off of forbearance with the way the rules are right now.   

I think in addition to that, we have to make sure borrowers understand what it means to come off of forbearance and what their different options are. Investor programs have evolved to have some really good programs that fit various different scenarios of homeowner’s ability to pay. In addition to talking to people about their forbearance expiring, it's important to make sure they understand the simplicity of some of these programs and how you can go from being a person on forbearance to a person who's repaying. 

What tools aid in overcoming the challenges that COVID-19 has posed? 

... read the complete story on page 34 of the November issue of DS News, available here [1].