Servicers had a bad rap for not being compliant and hindering the housing recovery by not improving. But this is not the case anymore, with more servicers taking extra precaution.
Back in February, David Stevens, president and CEO of the Mortgage Bankers Association, said that there has been massive improvement within the industry, and while servicers still have a ways to go, most are genuinely committed to safe and sound consumer protections and support a strong national servicing standard — which would be for the good of the country.
And one of the biggest drivers behind the change: having a single point of contact.
Part of the NMS is the requirement for a “single point of contact” (SPOC) for troubled mortgage holders. Under the SPOC directive, servicers must assign a single relationship manager for each borrower in the HAMP or other foreclosure-prevention options, and that SPOC can’t be a third-party contractor.
Fannie Mae recently studied homeowner responses to working with a SPOC, as advocated by Fannie Mae’s Know Your Option Customer CAREprogram, which provides free training for a servicer’s SPOC.
The study looked at eight servicers using the SPOC model and was designed to help determine its impact on homeowner engagement.
The study found two distinct insights:
1. Homeowners who remembered being assigned a SPOC were twice as likely to receive and accept a mortgage modification and half as likely to be denied a modification. In addition, they reported higher overall satisfaction than those who did not (true for homeowners awaiting a solution, denied, or receiving a liquidation solution).
2. Borrowers who remembered being assigned to a SPOC were happier with the solution they received than those who did not. Since solutions are based on common underwriting guidelines, these differences likely exist because the SPOC stayed engaged throughout the loss mitigation process, which helped the homeowner understand the reasons behind the servicer’s decision.
Kevin Kanouff, president and CEO of Statebridge Company, explained that having a single point of contact allows them to do three primary things.
1. It allows us to provide a predictable and familiar high touch line of communication between the borrower and the Servicer. This has proven to result in higher right party contact rates (because we provide the SPOC's first and last name, email address and direct line in the hello letter) and more consistent, longer lasting communication between the specialist and the borrower (because they build a mutual relationship).
2. The single point of contact shortens servicing timelines, because the files are not transferred from department to department.
3. The single point of contact provides a high touch relationship between the investor and the Servicer. This is because the investor can talk to one person to get the full story on a loan.
While the servicing indurtsy is improving, Kanouff noted that although SPOCs are very popular with investors, regulators and special servicers, with mega servicers, not so much.