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Technology May Eliminate Implementation Headaches for SPOC

While servicers attempt to develop processes to implement the single point of contact (SPOC) requirement that is part of the Federal Housing Finance Agency's Servicing Alignment Initiative, several technology companies have developed solutions to address the new regulation.

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""We believe technology is the heart of the solution,"" said Jane Mason of eMason, Inc., at a panel discussion at the Five Star Default Servicing Conference and Expo Tuesday.

eMason recently developed the Clairfire Community Portal, which allows servicers to implement SPOC with business process automation and centralized communication.

""What we're talking about here is an industry that's been asked to change the way they do business on a dime,"" Mason said.

Mason said what she's hearing from servicers is they don't know how they're going to implement such a substantial change so quickly.

However, she feels the regulation provides a distinct opportunity for all sectors of the industry to begin working together more closely and become more efficient.

Like ""eMason,"":http://www.emason.biz/ ""Decision Ready"":http://decisionreadysolutions.com/ and Barthel Consulting, LLC are developing technology to address SPOC. All three companies' solutions allow all information on a particular borrower to be stored in one data system and be accessed from one page.

The new programs also have ""smart business rules"" that each servicer can customize. For example, the system can automatically order a new BPO every 30 days, or check to make sure the homeowner is not on active military duty.

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Ravi Ramanathan, president and CEO of Decision Ready said servicers are being held to a new standard in foreclosure actions. They are no longer innocent until proven guilty, but guilty until proven innocent, he says.

""The burden of proof lies with the servicer for each foreclosure,"" Ramanathan said at the SPOC panel Tuesday.

Therefore, servicers must be able to track each action or communication with a borrower as well as any policy changes.

While the SPOC is meant to ensure better communication with borrowers, there are some logistical challenges. If a particular SPOC is not available, Ramanathan said another person can access the comprehensive file and address the borrower's needs.

On the other hand, Nancy Barthel of Barthel Consulting, LLC, the panel moderator, said her client is planning to keep only one individual involved in each loan, a sort of ""hand-holding in a sense,"" she said.

Mason said her clients are split on methodologies. However, ""as we get more efficient, having the data there is going to eliminate the need to have a person, I think."" Having the comprehensive file means anyone who accesses the file would have the same information as the assigned SPOC.

""We're being made to do what we should have been doing all along,"" said panel attendee Kurt Bertelsen, group vice president of default operations at ""Suntrust Mortgage."":https://www.suntrustmortgage.com/

Bertelsen said a previous servicer he worked with contemplated implementing SPOCs eight years ago but didn't because of the cost.

""One of the bad ramifications is a significant change in cost structure,"" Bertelsen said. Servicers now need a staff of employees who can have meaningful conversations with borrowers about their options, while also remaining empathetic and calm when borrowers become upset and agitated, rather than simply someone to answer calls and take information from a borrower.

Bertelson believes the increased costs will be reflected in mortgage costs, thus affecting originations and the overall market.

""From a regulation perspective, I think they may have underestimated the cost of changing the industry on a dime, and we don't even know if it will work,"" Mason said, adding that the industry needs to keep communicating with regulators.

About Author: Krista Franks Brock

Krista Franks Brock is a professional writer and editor who has covered the mortgage banking and default servicing sectors since 2011. Previously, she served as managing editor of DS News and Southern Distinction, a regional lifestyle publication. Her work has appeared in a variety of print and online publications, including Consumers Digest, Dallas Style and Design, DS News and DSNews.com, MReport and theMReport.com. She holds degrees in journalism and art from the University of Georgia.
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