July 13th, 2016 5:30 AM by Jackie A. Graves, President
In the years since the
housing crisis we've made important strides in making the servicing industry
stronger, more efficient and better able to help struggling borrowers. Now
we're working to prepare for a new future in servicing, or a "new normal"
as we like to call it at Freddie Mac, since we expect the post–crisis servicing
model of the future, 2017 and beyond, to look very different than it does
today. In doing so, it's valuable to take a look at the lessons we learned
during the crisis.
there was a lot of trial and error over the last seven years, we learned there
were 5 major factors for successful loss mitigation:
1. Lower payments. Sufficient payment relief
is probably the biggest predictor of long–term success for borrowers and it
also drives ongoing modification performance.
2. Earlier borrower engagement. The earlier you can engage with a borrower, the better your
chances of completing a modification and the better it performs over time.
3. Reduced documentation. This has been a clear winner for both servicers and borrowers by
creating process efficiencies for servicers while reducing barriers to assist
4. Simpler programs. Simple is better for a reason – complex requirements translate
into inconsistent application of programs.
5. More feedback. Feedback has been critical
in helping us to evolve our programs and policies so we introduced more forums
to listen to customer feedback. Importantly, we also took action.
VP Yvette Gilmore discusses these and mortgage servicing's "new normal" in Executive Perspectives.
Courtesy of Freddie Mac - To view the original article click here