For homeowners in financial hardship, the American Dream can quickly become a nightmare. A home is the biggest investment most people will ever make, so it’s only natural they might be scared when they can’t make their next payment. To compound their problems further, they may also avoid notifying their servicer at a time when money is tight and when more, not less, communication could help them the most. Fortunately, savvy mortgage servicers can use technology to keep the conversation going and help homeowners stay in their homes.
A big part of resolving financial challenges is making sure homeowners understand their options so they can make informed decisions to get back on track. During the pandemic and recent extreme weather events, some servicers offered homeowners the opportunity to explore assistance options discreetly and at their own pace with automated tools. Self-service digital capabilities that use guided interview-type questions can help homeowners determine the appropriate repayment scenarios and available forbearance plans that meet their individual needs. Homeowners can browse and select from qualified assistance options anytime, anywhere – even when they wake up at 3 o’clock in the morning worrying about loan payments.
Another key solution to have in the servicer’s toolbox is a high-functioning default solution that can proactively alert the collections agent when a borrower has requested a payment deferment to avoid unnecessary calls. Servicers can also use the outreach opportunity to provide personalized programs to help guide the borrower through their forbearance options based on factors like the homeowner’s state of residence, type of loan, level of delinquency, past forbearances and more. This logic helps prevent the borrower from receiving a general list of options they may not qualify for – reducing confusion and frustration.
Servicing agents must stay abreast of homeowner’s needs and address delinquent payments quickly and efficiently to provide the best experience possible and ultimately avoid loans transitioning into default. With the right technology, agents can make informed decisions based on a homeowner’s circumstances, without having to ask uncomfortable or repetitive questions that can make the homeowner feel put on the spot.
Additionally, servicers can improve the overall experience by managing both first mortgages and home equity loans with one system. Doing so supports a consistent servicing experience for borrowers and streamlines resolutions across multiple loan types.
Giving Homeowners an Easier Path to Assistance
Homeowners need and appreciate compassionate assistance during periods of financial hardship. These difficult times provide opportunities to build stronger relationships between servicers and their borrowers. Using digital servicing technology integrated with discreet collection tools, servicers can now open the channels of communication to demonstrate that they’re an ally to the homeowner and ready to assist them through hard times. In the end, it is a win-win situation when the homeowner is relieved from financial stress and the servicer avoids transitioning the loan to default.
Are you ready to enhance the customer experience and help more homeowners avoid late-stage default?