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TeleVoice Awarded U.S. Patent For SpotLight

TeleVoice, which develops and implements customized call center solutions, has been awarded a U.S. Patent for the unique technology embodied in SpotLight. The single-point of contact (SPoC) call management solution was designed specifically to address the challenges mortgage servicers face in implementing regulatory requirements for SPoC. SpotLight offers a distinct set of tools that improve agent efficiency and ensure regulatory compliance.

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“With SpotLight, single-point-of-contact operations become more than just an audit check box,” said Barry Hays, SVP and co-founder of TeleVoice. “A well-managed SPoC group really can achieve the true goal of loss mitigation, to move each troubled loan to the most favorable outcome as quickly as possible. Improving the flow of communications between SPoC agents and their assigned borrowers is the key to optimizing loss mitigation operations.”

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SpotLight manages all inbound and outbound call tasks assigned to SPoCs and may be used in environments where individual SPoC agents are assigned a group of loans or where a group of SPoC agents share responsibility for a set of loans. With SpotLight, agent resources are maximized and borrower needs are addressed more effectively.

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Using propriety technology, SpotLight dynamically calculates a call priority score (CPS), based on loan-level data and call characteristics, for each inbound and outbound call task. Critical calls are handled first, and less urgent calls are scheduled to be addressed later. Outbound contacts required by regulators receive priority as deadlines approach, insuring that regulatory standards are maintained.

The patented technology also provides critical audit trails by recording the disposition of every inbound and outbound call attempt. Servicers are able to instantly produce contact logs for individual loans, showing the outcome of every call that was placed by the borrower to the SPoC or by the SPoC to the borrower. Successful contacts, voicemails, requested call backs, abandoned calls and other call events are all tracked, providing a level of management detail not available with any other system.

Servicers using SpotLight for their loss mitigation operations have reported significant increases in Quality Right Party Contact, as well as increased SPoC efficiency and improved responsiveness from delinquent borrowers.

“The struggles the mortgage industry endured in the wake of the meltdown have largely abated, but the lessons learned have led to a lot of operational improvements,” Hays said. “We’re proud that SpotLight is one of the tools that is playing a continuing role in enhancing loss mitigation efforts.”

Progress In Lending
The Place For Thought Leaders And Visionaries

DIMONT Adds Auto Finance Industry Veteran

DIMONT, a provider of insurance claims adjusting and collateral loss mitigation services to the residential mortgage and auto lending industries, today announced that Mark Floyd has joined the firm as a board member, with a special focus on the automotive finance industry.

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Floyd is a seasoned auto finance executive, with more than 30 years of experience in banking and subprime lending. Most recently, he served as vice chairman and chief executive officer of Dallas-based subprime lender, Exeter Finance. He also held senior management positions at AmeriCredit Corp., including chief operations officer and president of dealer services, and executive vice president of strategic alliances. Prior to AmeriCredit, he served as president of the National Asset Placement Corp. and excelled in various leadership positions at banking institutions throughout Dallas.

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In his role as a DIMONT board member, Floyd will assemble and lead an advisory panel designed to provide guidance in client/services development within the automotive finance industry.

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“Mark has a proven track record of successfully building and leading a growing business platform,” said Denis Brosnan, president and chief executive officer of DIMONT. “We look forward to utilizing his expertise to help grow DIMONT’s solutions for the auto finance industry. His outstanding reputation in the industry, coupled with his wealth of experience and relationships, will help strengthen our presence as a best-in-class insurance claims service provider to auto lenders.”

“I look forward to building upon DIMONT’s strong foundation in the residential mortgage industry and expanding their reach into the auto finance space,” said Floyd. “Lenders will benefit tremendously from DIMONT’s products, service and dedication to excellence.”

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Prevent Loss Mit Delays

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As the impact of the housing crisis continues, lenders are still frequently pursuing short sales, deeds-in-lieu and other workout plans, often at the initial request of the borrowers themselves. Especially in states such as New Jersey and Florida, where foreclosure timelines are typically extended and thus, more costly for lenders, these loss mitigation strategies present a better option for all parties involved. However, while foreclosure alternatives are known for having shorter timeframes, they are no stranger to delays of their own.

When it comes to today’s non-foreclosure solutions, a lender’s overall objective is to identify and successfully execute a plan that leads to the fastest possible resolution. While undoubtedly quicker than foreclosures the vast majority of the time, loss mitigation processes are often prolonged when the strategy changes. This most commonly occurs when a short sale transaction must transition to a deed-in-lieu. This increasingly common scenario can disrupt progression and inevitably requires added resources, leading to a more difficult, lengthier process for the homeowner.

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This March, Hope Now reported that, while loan modifications in January 2016 were down 10 percent from the previous month, deeds-in-lieu jumped 17 percent in the same timeframe. It is likely that many of these deed-in-lieu transactions originated as short sales. With this upward trend, lenders are beginning to realize the importance of making loss mitigation adjustments more quick and seamless, and are looking first to technology to help.

Traditionally, lenders have managed their short sale and deed-in-lieu processes separately – separate departments, different personnel. From an organizational perspective, this might work. However, should a circumstance require a change in the loss mitigation strategy, lenders are often forced to start the process over entirely. For instance, if during a short sale a borrower is unable to sell his or her home within a given timeframe, a lender must typically close out the short sale and shift the transaction to either a foreclosure or deed-in-lieu. When using disparate systems, the information housed in the short sale platform would be completely lost when the transaction converts, ultimately causing delays. Instead, lenders can benefit from a dual-path approach, which entails running courses for a short sale and deed-in-lieu simultaneously. Then, if approval on a deed-in-lieu is granted first, there is a smoother transition to REO. Or, if a short sale begins, yet must transition to a deed-in-lieu, there is no need for the lender to start the process from the beginning.

By handling multiple loss mitigation options concurrently and within a common system, any notes or documents on file, messaging communication, property valuations and title work, all remain saved and can simply transfer should the strategy change. There is no need for information to be lost or for activities to be duplicated. Based on the frequency with which loss mitigation scenarios adjust, it is more important than ever for lenders to apply the methodology and technology to avoid further postponements, interruptions and confusion. Leaning on a single system as opposed to multiple platforms inherently provides lenders greater transparency throughout their loss mitigation departments while ensuring homeowners receive consistent and ongoing communication.

As many Americans continue to struggle to fulfill a mortgage, lenders remain responsible for both helping borrowers find an optimal resolution while preventing another downturn. The industry’s enduring need for loss mitigation solutions will continue to drive foreclosure alternatives. Given this, lenders should be updating their processes to ensure the short sales and deeds-in-lieu they pursue are handled in a way that results in the best possible outcome for the homeowners they serve.

About The Author

Keith Guenther
Keith Guenther is CEO of Lake Forest, Calif.-based USRES, Inc. and its wholly owned subsidiary, RES.NET, Inc. Guenther oversees all day-to-day activities and drives the strategic and technological initiatives for the companies. Since founding USRES is 1991, Guenther has been instrumental in building steady growth by identifying and maintaining key partnerships and client relationships. Guenther began his career in real estate as an agent in the 1980s. Prior to establishing USRES, he held several executive-level positions at Tarbell Real Estate, California’s largest family owned real estate company. This background has contributed greatly to his understanding of the market and awareness of customers’ unique challenges and needs.

Preventing Loss Mitigation Delays

As the impact of the housing crisis continues, lenders are still frequently pursuing short sales, deeds-in-lieu and other workout plans, often at the initial request of the borrowers themselves. Especially in states such as New Jersey and Florida, where foreclosure timelines are typically extended and thus, more costly for lenders, these loss mitigation strategies present a better option for all parties involved. However, while foreclosure alternatives are known for having shorter timeframes, they are no stranger to delays of their own.

When it comes to today’s non-foreclosure solutions, a lender’s overall objective is to identify and successfully execute a plan that leads to the fastest possible resolution. While undoubtedly quicker than foreclosures the vast majority of the time, loss mitigation processes are often prolonged when the strategy changes. This most commonly occurs when a short sale transaction must transition to a deed-in-lieu. This increasingly common scenario can disrupt progression and inevitably requires added resources, leading to a more difficult, lengthier process for the homeowner.

Featured Sponsors:

 

This March, Hope Now reported that, while loan modifications in January 2016 were down 10 percent from the previous month, deeds-in-lieu jumped 17 percent in the same timeframe. It is likely that many of these deed-in-lieu transactions originated as short sales. With this upward trend, lenders are beginning to realize the importance of making loss mitigation adjustments more quick and seamless, and are looking first to technology to help.

Traditionally, lenders have managed their short sale and deed-in-lieu processes separately – separate departments, different personnel. From an organizational perspective, this might work. However, should a circumstance require a change in the loss mitigation strategy, lenders are often forced to start the process over entirely. For instance, if during a short sale a borrower is unable to sell his or her home within a given timeframe, a lender must typically close out the short sale and shift the transaction to either a foreclosure or deed-in-lieu. When using disparate systems, the information housed in the short sale platform would be completely lost when the transaction converts, ultimately causing delays. Instead, lenders can benefit from a dual-path approach, which entails running courses for a short sale and deed-in-lieu simultaneously. Then, if approval on a deed-in-lieu is granted first, there is a smoother transition to REO. Or, if a short sale begins, yet must transition to a deed-in-lieu, there is no need for the lender to start the process from the beginning.

By handling multiple loss mitigation options concurrently and within a common system, any notes or documents on file, messaging communication, property valuations and title work, all remain saved and can simply transfer should the strategy change. There is no need for information to be lost or for activities to be duplicated. Based on the frequency with which loss mitigation scenarios adjust, it is more important than ever for lenders to apply the methodology and technology to avoid further postponements, interruptions and confusion. Leaning on a single system as opposed to multiple platforms inherently provides lenders greater transparency throughout their loss mitigation departments while ensuring homeowners receive consistent and ongoing communication.

As many Americans continue to struggle to fulfill a mortgage, lenders remain responsible for both helping borrowers find an optimal resolution while preventing another downturn. The industry’s enduring need for loss mitigation solutions will continue to drive foreclosure alternatives. Given this, lenders should be updating their processes to ensure the short sales and deeds-in-lieu they pursue are handled in a way that results in the best possible outcome for the homeowners they serve.

About The Author

Keith Guenther
Keith Guenther is CEO of Lake Forest, Calif.-based USRES, Inc. and its wholly owned subsidiary, RES.NET, Inc. Guenther oversees all day-to-day activities and drives the strategic and technological initiatives for the companies. Since founding USRES is 1991, Guenther has been instrumental in building steady growth by identifying and maintaining key partnerships and client relationships. Guenther began his career in real estate as an agent in the 1980s. Prior to establishing USRES, he held several executive-level positions at Tarbell Real Estate, California’s largest family owned real estate company. This background has contributed greatly to his understanding of the market and awareness of customers’ unique challenges and needs.

Loss Forecasting

*Loss Forecasting*
**By Tony Garritano**

***Looking to meet tighter loss forecasting and stress testing requirements with a sound, transparent, and proven methodology? One vendor is making this easier. Interthinx has launched TrueOutlook, a portfolio forecasting and stress testing tool that enables financial institutions to predict to what extent the quality of underwriting, age of loans, and economic impacts will affect future losses. Here’s how it works:

****TrueOutlook allows for the forecasting and stress testing of portfolios against different originations strategies and economic factors to show lenders what percentage of risk is within their control and what is not. With TrueOutlook, small to midtier banks and credit unions can leverage technology previously available only to large global financial entities. TrueOutlook uses Dual-time Dynamics, the patented forecasting technology of the Interthinx LookAhead and TrueCapital products, which has proven accurate through more than 15 years of global economic change.

****“TrueOutlook makes sophisticated scenario-based forecasting and stress testing available to a much larger group of lenders across the United States,” stated Michael Smith, chief technology officer and chief architect at Interthinx. “It’s a comprehensive, cost-effective service that can be used for all U.S. consumer retail portfolios, such as auto loans, credit cards, home equity loans, and personal or small business loans. TrueOutlook is designed to meet the needs of organizations with limited internal resources and staffing. The tool enables customers to benefit from industry benchmarking and more accurate forecasting models that stress-test portfolios under different economic scenarios in line with regulatory guidance from the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).”

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Magazine Feature Story

*A Web of Challenges*

**By Ravi Ramanathan**

***Servicers today face an unprecedented volume of delinquent loans and foreclosures, which likely will build as more distressed homes emerge from the shadow inventory. They also must cope with ever-changing layers of state and federal regulations, and investor servicing guidelines, and the constantly shifting requirements of government programs. All of these factors have created a complex web of servicer policy and compliance challenges.

****In addition to increased staffing levels to keep up with the volume surges, a new set of challenges has emerged for servicers: constant process adjustments to handle the investor and individual state- by- state level changes to regulations. Servicers must now also ensure that the decisions of their servicing associates who review the delinquent and distressed loans are consistently in line with their policy and procedural guidelines. Freestyle decision-making and experience-based interpretation of guidelines can leave servicers vulnerable to costly errors and reputational risk. 

****Banks are learning that origination and servicing compliance, prior to the subprime crisis, were largely related to document gathering processes. Generation of key documents, and the timely disclosure and execution of terms and notices, were the primary focus. This has now been layered with process-based compliance to ensure that the subjectivity of process decisions by bank employees is replaced with more objectivity. Furthermore, much of the compliance was based on a snapshot of loan file data. There is a real need to supplement document compliance with additional procedural associate compliance throughout the loan life cycle.

****Complex Rules

****Compliance in today’s world is not black and white. Most of the servicing compliance challenges are not just based on timelines, but are also process- dependent. For example, the Treasury’s Making Home Affordable Programs (HAMP, HAFA, 2MP) have gone through numerous major program changes as they have evolved. The GSEs have layered additional guidelines and updates to their servicing directives. The state, federal and regulatory guidelines also need to be accounted for. To further complicate matters, all of these regulations are subject to interpretation. The policies followed and the related actions that servicing associates take need to be customized based on several loan characteristics such as: the state the property is located in, whether or not the property is owner-occupied, property condition, Service members Civil Relief Act (SCRA) checks and the status of loan delinquency. 

****More Scrutiny

****The increased scrutiny of servicer decisions by internal and external auditors has raised the bar for electronic documentation of the process trail, in addition to the document trail. It is no longer enough to establish compliance by referring to training guides and processing manuals– loan level electronic documentation is required to prove beyond a reasonable doubt that the servicing associate followed the then prevailing policy.

****Servicers must show they made a compliant decision during each step of the loss mitigation and foreclosure processes, as well as how and why they took each step. Was the Home Ownership Modification Program (HAMP) offered to the distressed borrower? Was there a reasonable attempt made to reach the customer? Were loan modification, short sale and deed-in- lieu workout options pursued and presented to the borrower prior to initiating a foreclosure? Servicers must show that they have exhausted all the possibilities of keeping a borrower in their home before moving to foreclosure. How do servicers show that they’ve done enough to satisfy all these requirements?

****Subjective Decisions

****The investor guidelines around critical servicing decisions leave a good deal of room for servicer and associate interpretation. These complex decisions need to be broken down into a series of simpler objective questions to eliminate the ambiguity for associates. A couple of examples illustrate this point:

****1) What constitutes “Sufficient Customer Outreach”? Customer outreach functions involve a combination of calls, letters and face-to-face borrower contact attempts. The customer contact sufficiency check, combined with the definitions of non-cooperative borrower and non-responsive borrower, are as subjective as some of these activities get. The associate needs to be presented with a series of questions to collect data on contact attempts and the timing of the attempts. The data collected from these questions then need to be run through a decisioning process by a back end technology to determine whether the servicer made a sufficient effort to establish right party contact. Let’s leave the discussion on the subjectivity around “Quality Right Party Contact” being proposed by the GSEs for another time.

****2) What is the definition of an “Active Workout”? Most investor guidelines allow a servicer, via delegated authority, to postpone a foreclosure sale date if the borrower has a current active workout. The definition of what constitutes an active workout—as well as any exceptions that need to be noted for a waiver to this– are critical when determining  whether the foreclosure sale date postponement will be considered. In several states the only way to postpone a foreclosure sale date is to stop the entire foreclosure process and restart. This is not only costly but also results in substantially prolonged foreclosure timelines.

****Servicing Enablement

****Training alone will not eliminate the risks associated with servicing loans. It’s also important that servicing associates are taking the right steps in the right sequence consistently over the life of the loan, with no gaps. The reliance over policy and procedure documents, process cheat sheets and laminates has to be minimized.

****For consistent and effective procedural compliance, servicers must employ a new operational framework. Technology can facilitate a more qualitative process-based compliance by turning those process steps into auditable questions or decisions that each associate needs to make. Each of the steps and the decisions made are then documented to ensure consistency, fairness and accuracy. In essence, this means turning a qualitative process into a quantitative one.

****Collaboration between bank policy-makers and risk and default servicing departments is needed to ensure that rules are clearly defined. These rules need to be centrally stored and enforced within a technology that allows for decentralized global deployment of rule sets, and ensures consistent, unbiased enforcement across all servicing departments. 

****Technology solutions are required to track key decision points in servicing delinquent loans. They help establish that the proper decisions were made by all departments. Software systems can also give servicers peace of mind that proper sequences were followed with all the third parties involved in servicing distressed loans, such as property preservation and short sale vendors, broker price opinions and foreclosure attorneys.

****The Balancing Act

****The interpretation of subjective decisions by servicers to provide the borrowers with the appropriate amount of time to respond and provide documentation on critical servicing guidelines prior to moving a customer to foreclosure will have a significant impact on portfolio performance. It may not be the story everyone wants to hear, but the challenge is to manage the timelines and find a balance that accommodates the customer, investor, and regulator expectations and obligations. It’s a balancing act that technology can help with by enforcing consistent policy application and customer treatment across an entire servicing operation.

****Technology can enable servicers to efficiently move through and manage their inventory, while at the same time ensuring each customer is treated consistent and fairly. Severely delinquent loans need special servicing compared to newly delinquent loans. To complicate matters further, many of the loans are the result of acquisitions, and it’s often unclear which steps were taken. The conservative approach is to start from the beginning with borrower outreach and communication. By then, guidelines may have changed, new information is required from borrowers, and borrower situations may have changed.  The constant state of change requires more training on new policies and creates opportunities for missteps by servicers.

****Cloud Based Technology

****Servicing technologies have historically been plagued with an inertia to change. Making changes to a servicing system is expensive and typically involves a long implementation time period. With the advancement of technology and cloud-based computing, servicers now have options to embrace new software that is far cheaper and has substantially shorter implementation times.

****Software options are available where the entire software and server infrastructure is accessible from the “cloud” via a web-browser. The Software is delivered as a Service (SaaS) in a utility-style model. The systems now allow for storage and retrieval of documents, minimizing the need for paper-based processing. Many of the systems support bi-directional servicing system integration to eliminate the information timing gap on receiving current loan information necessary to complete loan reviews, and push updates back to the servicing system.

****The solutions not only allow servicers with qualitative process compliance by turning each step in the default servicing process into auditable decisions, but also stores all of that to ensure consistency, fairness, and accuracy. The decisions made on each loan by each associate are documented for quality control review, investor forensic audits, and portfolio analytics. That audit trail makes it easy to demonstrate compliance to auditors, investors, and oversight bodies.

****Strategic Advantage

****Embracing a technology-driven path to process compliance has a key strategic benefit for servicing operations. The technology activity and process data repository expands the customer value proposition through the operational analytics opportunities. The first stage of the implementation allows the servicer to focus in on process conformance and compliance. The data collected on each step of the process can be mined and analyzed to identify intelligent metrics around state, investor, and other loan parameters. This allows servicers to identify and drive process and policy changes through their organization. Leveraging third-party market and economic data combined with transactional data collected through operational technology can empower servicing management with business intelligence analytics.

****The technology platform can also assist servicers in managing the total servicing costs as they relate to vendor relationships critical to default servicing. The ability to enforce vendor compliance and score carding allows the servicers to have an objective process on vendor selection – a recent focus of the consent orders. The vendor management aspects apply to asset management, short-sale transactions, field inspections, and other third party outsourced services. 

****Technology Matters

****Today’s servicers are constantly challenged to keep up with evolving regulations and investor guidelines. The latest process-based technology solutions not only enable servicers to manage day- to-day compliance and process changes, but allows them to be agile. Managing timelines and finding the right balance that accommodates customers, investors, and regulators is critical. Without a technological framework, servicers would be hard-pressed to respond quickly to meet new regulatory and compliance changes.  And using the right technology—one that offers process-based compliance—can make all the difference.

****ABOUT THE AUTHOR: Ravi Ramanathan serves as president and chief executive officer of DecisonReady, a provider of end-to-end policy and process compliance solutions for default servicing, and is responsible for the company’s strategic vision. The company has reviewed for leading servicers more than two million delinquent residential mortgage loans for loss mitigation, and for foreclosure process and policy compliance. DecisionReady was founded in 2010 to assist mega to mid-level servicers in better managing the challenges and complexities in the decision processes of default servicing.

*****http://www.progressinlending.com/TME0911/TME0911-23.pdf*****

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Progress In Lending
The Place For Thought Leaders And Visionaries