The number of homeowners still in forbearance plans has been declining as foreclosure moratoriums expire. HousingWire recently spoke with Joe Davila, president and CEO of Selene Finance, about how servicers can best help homeowners with next steps as they exit forbearance plans.
HousingWire: More than one million borrowers are exiting forbearance plans. How can servicers prepare to help them with next steps?
Joe Davila: Communication, borrower education and training of consumer-facing staff are all critical elements to ensure your servicing operation is properly prepared to help borrowers as they exit forbearance plans.
Embedding the loss mitigation rules into process workflow is needed to ensure consistency and proper flow of information and decisioning. The call center and loss mitigation teams must be properly trained on the options that are available to the borrower to properly guide the discussion.
In certain cases, with the proper technology, the borrower can self-service through a portal to select their exit plan with limited or no documentation requirements.
HW: What do servicers need to know about expiring foreclosure moratoriums?
JD: Servicers have foreclosures in process that are either stopped in a certain stage or progressing to the next stage that require appropriate reporting, tracking and documentation.
Once the moratoriums are lifted, the need to monitor state-by-state rules or potentially county-by-county in an automated fashion will be tricky and require technology enhancements and comprehensive training of the staff.
There are still many unknowns so the servicer will have to remain flexible and start to think about staffing the foreclosure teams because most of the foreclosure teams were reassigned due to moratoriums.
HW: How can servicers best help homeowners as those moratoriums lift?
JD: Servicers will utilize a structured waterfall to determine the optimal outcome for the borrower. These rules will assess the borrower’s ability to pay, property value and employment status.
The goal is always to keep the borrower in the home whenever possible. The servicer will provide outreach to borrowers in foreclosure as well and handle inbound calls where alternatives to foreclosure will be discussed.
HW: What will servicing look like in 2022, and how can servicers best prepare for what comes next?
JD: In 2022, the focus will be on the new CFPB and regulatory environment along with post-moratorium management of the borrowers and the foreclosure process. Compliance with regulatory changes will require technology adjustments, training and advanced reporting to identify real-time risk.
If post-moratorium foreclosure guidelines are set at the state or even county levels, the need to embed the new rules will also be a challenge to manage.
In addition to all of this will be managing the COVID-19 situation if the virus continues to impact day-to-day life. Hiring and retaining a work from home staff versus a hybrid model of in and out of the office will continue to be a challenge even though we have seen very good performance to date.