When borrowers face financial hardship, they need seamless access to qualified assistance. The COVID-19 pandemic brought this to light like never before and with the number and intensity of natural disasters predicted to grow, it is in the best interests of both servicers and the homeowners they serve to stand prepared with self-service technology (SST).
We recently published a case study looking at borrowers who used Servicing Digital, our consumer-facing responsive web and native app solution during and after the pandemic. Servicing Digital gives users 24/7 access to detailed, timely and highly personalized information and helpful tools about their loan, including a devoted “Disaster” capability that can be activated by servicers and used to help them provide specialized assistance to consumers during times of exceptional need. This additional functionality helps servicers provide a broad array of forbearance options to borrowers impacted by disasters. With this capability, servicers can respond quickly to anticipated spikes in payment assistance requests with appropriate solutions, including repayment plans, FHA partial claims, GSE payment deferrals, loan modifications and more.
The study, “Helping Homeowners in Times of Financial Hardship,” looks at disaster data from a representative selection of 21 clients from August 2020 to September 2022. Among other things, the study found that approximately 342,000 borrowers interacted with the “Disaster” option to initiate a self-service loss mitigation request, with results including:
- 139,000 homeowners committing to new forbearance plans
- 49,000 extending existing forbearance plans
- 112,000 committing to final loan modifications
While most natural disasters affect a relatively small geographic region and a relatively small number of people, the COVID-19 pandemic provided an unusual opportunity to study the demand and efficacy of SST disaster assistance across a broad geography over an extended time. In addition to the positive borrower impact discussed above, Black Knight also discovered the following additional SST disaster assistance benefits based on its analysis of borrower actions:
- Accelerated borrower engagement, giving servicers more runway to work toward mutually beneficial mitigation solutions
- Configurable workflows allowing for a rapid and adaptive response by servicers to borrower needs
- Increased borrower engagement during a time of high anxiety when many borrowers have been known, historically, to avoid contact with servicers due to stress, embarrassment and fear of losing their homes
While events like 2017’s record-shattering hurricane season or the COVID-19 pandemic may not happen every day, natural disasters appear to be on the rise. By proactively engaging homeowners who may be struggling to pay their mortgage and empowering them with tools that help them understand their options, servicers can expect positive outcomes that may include higher portfolio retention, increased customer satisfaction and loyalty, greater servicing efficiency, and fewer third-party collections.
Click here to download a complimentary copy of the case study.