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A look at key mortgage claims challenges servicers are facing

HousingWire recently sat down with Newbold Advisors Partner Robert Simpson to learn more mortgage claims in today’s servicing climate.

HousingWire: What are some key challenges servicers are currently facing regarding mortgage claims?

Robert Simpson: This is a pivotal moment for mortgage servicers. The pandemic has brought to the surface the glaring inefficiencies – limited trained staff, multiple claims systems, inefficient manual processes – and (unnecessary) financial costs that have plagued the claims servicing process for decades.

Servicers are taking a harder look at technology to reinvent the way they process claims. The flexibility of being able to make the required changes to processes and technology can be extremely daunting without the right tools and vendor partners in place. The Cloud-Claims system automates the claims process, resulting in compliant claims with maximum cost recovery.

HW: How have the events of the past two years affected how servicers handle claims?

RS: The last two years have permanently changed how servicers view the claims filing function. First, many mortgage servicers now understand that the current people, processes, and systems of filing claims needs a rework. Facing a post-COVID remote workforce, servicers have struggled to find candidates familiar with the convoluted and cumbersome system for claims processing. To attract and maintain viable employees, servicers must focus on which technologies will allow them to integrate with existing platforms and provide quality controls.

Second, remote resources for servicing functions are here to stay. Or, at the very least, the mortgage servicing environment will never be the same. During the pandemic, servicers were forced to rely heavily on remote resources for servicing functions overall, including the claims filling process. This resulted in the expanded use of Cloud-based technologies like Cloud-Claims. The ability to manage and control all aspects of the workflow and generate reliable management reporting is one of the major changes resulting from COVID.

Third, with the GSE’s and FHA implementing new submission platforms it is critical to have such technology as Cloud-Claims that easily and seamlessly integrates with the bulk upload submission API of these platforms.

HW: What is Cloud-Claims, and how does it increase efficiencies for servicers?

RS: Servicers have been seeking a technology that would automate the entire claims process, with limited staff and maximum efficiency. Through the innovative thinking of VAT Mortgage, Cloud-Claims is a ray of light to servicers who have long been stymied by an antiquated process that wastes time, resources, and increases cost. Cloud-Claims uses a comprehensive rules engine to feed data from multiple systems into its database. The system ensures compliance to insurer or investor requirements, and flags missed timelines and inaccurate or incomplete information. Cloud-Claims increases efficiencies through automation and workflow throughout the entire claim’s life cycle.

What does this mean to default servicers? Claims that are complete, accurate, regulatory-compliant, and ready for submission. By automating the claims filing system, servicers can better scrutinize the process, e.g., identify areas where expenses are repeatedly denied, or interest is curtailed. The bottom line? Automation and inflow of real-time data simplifies the claims processes, reduces manual data entry, and provides time and cost savings for servicers.

HW: Why did Newbold partner with VAT to bring the Cloud-Claims system to the market, and what has the response been thus far?

RS: Newbold identified VAT Mortgage Services (VAT) and their revolutionary Oracle-based Cloud-Claims product as an industry game-changer. Our servicing clients have voiced frustration to us over the years about the lack of current technology and limited claims outsourcing options. Since the pandemic, servicers have been finding it increasingly difficult to find trained resources to process claims internally. The product is capable of processing all claim types and the comprehensive rules engine keeps the servicers consistent and compliant on their claim filings. The clients who have implemented Cloud-Claims and are quite pleased with the automation, the variable cost structure and the three configuration options (system only, full outsourcing, hybrid of both).

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