North Texas Mortgage Servicers Getting Creative with Door-Knocking
Mortgage servicers are growing more and more creative in outreach methods and door-knocking services in an attempt to enter distressed borrowers into workout plans, according to speakers at the sixth annual Texas Mortgage Bankers Association (TMBA) Southern States Servicing Conference. Rick Roniger, executive vice president and chief operating officer at Westlake, Texas-based First American Loss Mitigation, said servicers used to mail outreach packages with return envelopes included. But when that method failed, servicers turned to increasingly creative rewards-based outreach programs. These "gimmicks" included mailing coffee mugs with single-serving-sized packages of coffee grounds to borrowers with notes encouraging them to "sit back, relax" and fill out the information about their late mortgage payments, Roniger said. Soon, servicers sent out field units to engage in a door-hanger service to encourage borrowers to contact their mortgage companies if they had trouble paying. Door-hanging services soon became door-knocking services, which ultimately produced occasions of field agents knocking on borrowers' doors and physically handing them a phone to call their servicers. "If we can talk to people, we can usually reach a workout deal," said Brad Staley, managing director at Irving-based iServe Servicing, who also spoke at the TMBA conference. He noted the main challenge in resolving extremely distressed, low-value assets is making contact with the borrowers and maintaining that contact once a workout plan is initiated. Some field services go so far as to knock on borrowers' doors after normal business hours and on weekend mornings, as well as stake out in cars in front of houses for up to an hour or until the borrowers return home. If the borrower responds to the outreach efforts, a workout plan can be reached 85-90% of the time, Staley said. He noted some field services will actually go with borrowers out to a coffee shop to go through paperwork and discuss workout options. If those same field agents keep in touch with borrowers once modifications or forbearance plans are initiated, the level of continuity achieved gives borrowers a sense of stability and customer service. Staley said these methods achieve a low recidivism rate around 18%. But that's only when the borrowers can be contacted. And in the case of servicers sending field agents out to knock on borrowers' doors, sometimes the homes are already abandoned. In the Midwest region, for example, Staley said around 55-60% of homes visited by door-knocking field agents are already vacant. Some proactive outreach methods like contacting the listing agent if the property has a for sale sign, or following through to a forwarding address, may still result in an avoided foreclosure, he said. For instance, some borrowers respond positively to pursuing a short sale or deed-in-lieu. Staley said this type of proactive outreach can bring around 30% of borrowers that have already walked away back into the homes and into workout plans. Write to Diana Golobay.