How servicers can prepare for potential default wave

HousingWire recently spoke with Sutherland Mortgage Services President Krish Swaminathan about the next wave of servicing, how servicers can best communicate with their customers and the technology available to help with compliance even in a work-from-home environment.

HousingWire: What are servicers most concerned about in today’s environment?

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Krish Swaminathan: Servicers are most concerned about what’s going to come down the pipe in a few months. At some point soon, we’re going to have foreclosure issues, maybe another need for forbearance – things relating to nonpayment. There’s going to come a time where homeowners are going to be under pressure and the defaults and/or late payments are going to start, which is in turn going to cause foreclosures and defaults.

Servicers got through the forbearance period, and now they should begin to think about how to prepare themselves for a possible wave of defaults and the resulting actions from that.

HW: What should servicers do right now to prepare for the volume of requests they’ll face when forbearance periods end and foreclosure moratoriums are lifted?

KS: One of the key things that servicers should be preparing for right now is, how are they going to handle the inquiries that they’re going to get, from a customer experience and customer service standpoint? Those that are able to prepare themselves and have the tools in place so that they can actually address their customers’ needs would, I believe, benefit a lot.

Even during the forbearance period in April and May, you saw that a lot of servicers were getting tons of phone calls and their systems were just not ready to handle it, because we’ve gone through a long period of time where defaults were so low that they had gotten accustomed to not having a large amount of staff and or systems ready for it. They should be getting themselves ready, and this can be accomplished in various ways.

They can make sure that the telephone system that they have is capable of handling those incoming calls, and they really should be making omnichannel access available to their customers. Customers should be able to ask questions and get answers using chat capabilities, phone calls or different technology tools, including social media, so that the customers get the answers that they want, and servicers are able to provide those consistently across different platforms to those customers.

HW: How is Sutherland supporting servicers through the current uncertainty in the industry?

KS: Sutherland has capabilities from a labor support area and from a technology support area that we can provide to our servicers, and today we are doing both.

We stepped in and helped multiple servicers during the forbearance calls that they were receiving. We have a good-sized team in place and we are helping servicers handle these customer service calls.

We are also preparing ourselves to be in a position to help our clients when these volumes hit, to be able to provide team members to be able to handle those – but more importantly, we are helping our servicers get the technology in place so that they can do it.

We have multiple technology offerings that we can bring to the table. We have chatbots that we have deployed with a couple of servicers today that can answer a lot of the basic questions. Chatbots are one of the clearly low-hanging fruits that almost all servicers should have in place, because almost everybody’s computer savvy – they can go online and get all these basic questions answered.

They’ve also got to make sure that their different technology tools can talk to one another, so that a customer, when they call and reach your customer service representative and get answers, the next time they call, or do a chat or get a question answered through social media, they’re not having to redo everything.

I think it’s very important for servicers to have a platform similar to what we have, called Sutherland Connect, which provides the ability to have all the communications related to the customer in one portal. Whether the customer asked a question through a telephone customer service rep, a chatbot, a Tweet or through some other channel, all those communications are maintained. So that person from the servicer’s shop who’s helping is able to fully see and say, “Okay, you called on this day about this. You asked this question online about that,” so that you’re able to provide a comprehensive answer and a solution to the customer.

This is extremely important for servicers because that will lead to speedy resolution of the customer’s need, leading to a higher level of customer satisfaction. But it also just takes care of what is needed so that it doesn’t generate repeat calls or repeat queries.

HW: How can leveraging technology help servicers manage risk and compliance?

With COVID hitting and work-from-home becoming the norm now, servicers have a lot of their team members working remotely. It’s very important to make sure that the security and related compliance standards are maintained at a very high level.

Obviously, customers’ personal information is top priority. It’s important for servicers to have a platform in place where, no matter where their team members and customer representatives are working from, the information is secure and there’s no risk.

Sutherland Sentinel is a technology that the servicers can deploy to their entire work-at-home staff. It has various tools of authenticating that the representative is working and is doing things the right way, so that at no point is a customer’s information compromised.

I think it’s very important that servicers consider using that so that they can have a very high level of security yet give the flexibility and the comfort to their team members to work remotely – it’s a good combination of both.

HW: What changes has Sutherland made to grow its business over the past year?

KS: Over the past year, we’ve had multiple challenges – COVID obviously being the biggest challenge, but in addition, we have had an extremely low interest rate environment, leading to a significant surge in volume in the origination side of the house.

When COVID hit, one of the things that we were able to do is immediately move into action to get our entire staff to be able to work from home – this applies both to our onshore and offshore team members. We were able to move 100% of our team members in all three geographical locations where we operate from – India, Philippines and the U.S. – to be enabled to work from home, which is a monumental task because we have tons of folks at work and we have to make sure that we abide by the local rules.

Not everybody has a computer and/or high-speed internet accessible immediately, so we had to get those in place. We have to worry about customers’ information security, so we had to get those security items in place.

We were able to put into play a lot of what is offered to our customers in our own services – Sentinel being a very good example – to be able to enable our team members to work remotely. We’re very proud to say that over 90% of our offshore team members and 100% of our onshore team members are working from home, fully productive, very secure. We are able to not only do what we were doing earlier, but actually more of it.

HW: What does the future of servicing look like?

KS: The winner is going to be those servicers that can provide a good customer experience during what could be a difficult time. Customer experience has always been very important for servicers.

With what could likely hit in terms of defaults and issues related to that, I think it’s very important that servicers prepare themselves to provide a level of experience to their customers that will make the situation about as easy as it can be. The underlying issues, such as the foreclosure process, will be stressful for customers, but the way that servicers communicate with them should be extremely efficient and provide them with a good experience. 

The goal is to have consistent messaging across all channels to make the customer experience as efficient and as good as possible – I think servicers who can have this in place are going to be the absolute winners.

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