Mortgage loan servicing is not for the faint of heart. Anyone that thinks a mortgage servicer only collects payments and helps borrowers when they make a late payment, doesn’t know the half of it. Falling under heavy scrutiny during the Great Recession, servicers have since juggled immense regulatory oversight, as well as process inefficiencies, and mortgage servicing rights volatility. Responsible for helping distressed homeowners withstand the 2010 financial crisis, the pandemic financial crisis, and the impact of exponentially increasing natural disasters, mortgage servicers often operate with razor thin margins, perpetuating a constant juggling of resources. It doesn’t take much to tip the scales in this environment. This scenario makes resource management and change management critical to servicer success, ensuring resources are deployed where they are needed most… especially when it comes to customer facing activities and operational processing.
How do you make certain your business is reinforced when requirements and borrower impact are nuanced and unpredictable? We at QC Verify have found that meaningful, customized loan file reviews can help your sampling become a valuable tool, creating educational benefits and process improvement. We take sampling seriously and by focusing on the areas we know Fannie Mae, Freddie Mac, and other agencies are targeting, QC Verify has cultivated an approach that delivers organizational awareness and development.
As you evaluate the impact of current servicing concerns on your borrowers and operations, are you ready to strengthen your approach?
COVID OVERLAYS
The pandemic may be over, but we have not moved beyond COVID-19 overlays, many of which have, or will be, migrated into standard guidelines. There are a number of borrowers in loss mitigation scenarios that have been grandfathered and therefore remain in effect. The underlying difficulty for servicers stems from the fact that the various agencies, Fannie Mae, Freddie Mac, Federal Housing Administration, Veterans Administration, and the Consumer Financial Protection Bureau, as well as state and federal oversight, all have a slightly different twist on the myriad of requirements they publish. COVID overlays add to this complexity as servicers must parse through guidance that is grandfathered, integrated, or brand new. The QC Verify approach is uniquely designed to help you and your staff understand these nuances, while not becoming encumbered by them.
OCCUPANCY
Misrepresentation of occupancy continues to be a concern. With higher interest rates and a continued competitive purchase market, we can expect to see this issue persist in the future. Even though some markets are seeing a slowdown, others are still plagued by a lack of inventory and new construction remains sluggish, maintaining an aggressive purchase market. Verifying occupancy and uncovering fraud risk can be tedious and time consuming, with or without an active purchase market. QC Verify designed and delivers an innovative verification tool that targets this issue, as well as others, working to uncover any predisposition for occupancy fraud and minimize ongoing risk.
HAZARD INSURANCE DISBURSEMENTS
No matter where you stand on climate change, you can’t argue with the continued increase in natural disasters. The National Oceanic and Atmospheric Administration (NOAA) recently reported that the U.S has topped a billion dollars in damages since 1980. The frequency of disaster events has steadily increased during this time; however, more alarming is the exponential increase in the cost and impact to homeowners over the past 5 years. Every servicer knows natural disasters are nearly impossible to predict in terms of location and severity, thus making preparedness difficult and making processes more error prone, especially in terms of hazard insurance disbursements. QC Verify targets areas, which may be overlooked, with meticulous attention to operational practices and end file review.
ENGLISH AS SECOND LANGUAGE (ESL) / LIMITED ENGLISH PROFICIENCY (LEP)
As the immigrant population blossoms into a vital segment of homebuyers, the need for proper ESL/LEP accommodations continues to swell. The CFPB took up the LEP charge in 2021 when the U.S. LEP population was estimated at 25.5 million individuals. Fannie Mae and Freddie Mac are also diligent in their efforts to publish guidance in these areas. QC Verify is well aware of this importance and dedicates keen attention to corresponding files in order to remedy defects and minimize future infractions, so you can best serve your LEP borrowers.
EVENT DOCUMENTATION
Amidst this ongoing whirlwind of change and resource restriction, mortgage servicers can easily find themselves without the sufficient time, staffing, or resources to adequately document the myriad of events that occur in mortgage servicing. Automation helps greatly facilitate efficiency and diminish human error. Nevertheless, the capabilities needed to document events and any corrective action takes specialized expertise. At QC Verify, we combine automation and expertise to ensure identification, documentation, and prevention occurs when risks or defects are found.
Join us as we explore the various facets of agency oversight in our upcoming blog series, where we focus on how mortgage servicers can excel no matter what their size or position in the industry. QC Verify’s objective is to create a unique and meaningful relationship with each of our clients - a partnership that meets you where you are. We offer a personal, customized QC and audit experience that surpasses the competition and prepares you to do the same.
Find out how to reinforce your servicing business with QC Verify, specialized loan quality audit and reporting that meets today’s needs for risk management and innovation. Visit us at QCVerify.com to find out more.