How CLS Cares for Struggling Mortgage Borrowers

With ever-evolving housing policies, an unexpected resurgence of COVID at the hands of the Delta variant, and millions of borrowers still in forbearance, servicers have a myriad of priorities to juggle. 

That’s why Sagent recently teamed up with Computershare Loan Services (CLS) to bring you a webinar sponsored by DS News titled How to Master Your Top 5 Mortgage Servicing Priorities. With key insights from Dan Sogorka (Sagent CEO and President), Jeff Johnson (CLS COO), and moderator David Vida (CLS EVP, Enterprise Sales Leader), the trio tackled some crucial questions servicers are grappling with as they guide their borrowers through this tumultuous period.  

In case you missed the webinar, we’ve put together a Q&A-style recap* of the webinar so without further ado, here are 5 insightful highlights from CLS about how they’re helping struggling mortgage borrowers get back on their feet:

1. How are you helping borrowers with long-term forbearances get the help they need?

 

Jeff Johnson, CLS: If you haven’t made a payment in over a year, your mortgage isn’t the only thing that’s impacting your life. This is a population that we’re concerned about, and this is a population that we’re being very intensive to make sure we’re creating multiple avenues to engage with these consumers. We’re trying to make sure that they understand what options are available to them.

This is where leveraging your technology to understand what makes up this population comes in. From there, engaging with the right kind of communication is going to be critical, otherwise this is going to be problematic in the industry.

2. What kind of outreach are you doing to ensure that borrowers understand their options?

 

Jeff Johnson: So what we’re doing actually is we’re crafting a different type of communication that’s more proactive. We are able to use our data and technology to identify whether people are current or not. We’re flagging these folks so that when they are coming into our call center, we’re engaging them with the right dialogue from the start.

We’re also creating reporting to make sure that we are tracking these borrowers all the way through the process, and the minute we see something slip, we’re adjusting our engagement pattern because what we don’t want to do is create a situation where people have worked so hard to come out of forbearance and then they slip back into trouble.

I think that servicers have to be really thoughtful about the fact that just because somebody came out of forbearance strong doesn’t mean they’re going to be able to hold on without some assistance, and we’re making sure that we’re available to provide that assistance.

And in partnership with Sagent, we’re going to make sure that we do everything in our power to ensure that doesn’t happen.

3. How is the changing regulatory environment impacting this process?

 

Jeff Johnson: We got the CARES Act and forbearance part down, but now the really heavy lifting is going to occur. This is where the partnership with Sagent’s system and technology team is so critical. As you look at the changes with Reg X, you have to be dialed in with your foreclosure checklists. You have to be dialed in with your documentation.

You have to be able to easily demonstrate to regulators that you have been thoughtful in every activity that you’ve taken prior to advancing the foreclosure process.

You need two things to make that happen.

Number one, your staff have to be knowledgeable, but there’s so much going on that telling them isn’t enough so your system has to be able to display what’s going on so you can react.

Number two, you have to have the ability to get the data to track your assets as you’re moving forward to know who is under protection, who is not under protection, who is 120-days past due prior to the pandemic, all these types of things that sound easy until you actually have to execute on it.

4. How do you ensure compliance as you navigate this complex regulatory environment?

 

Jeff Johnson: So what’s really critical here and where we really partnered with Sagent is the transparency and visibility into the servicing rules. You have to have the ability to engage your operations and feel confident that you’re not going to trip up, because the CFPB is already actively engaged.

The CARES Act is pretty straightforward. Reg X is going to be much more complicated, and people need to be ready. 

Make sure that you have knowledge of your book. Make sure you can track what’s going on in your portfolio so you can then represent it back in a cohesive picture to demonstrate that you understood the changes in Reg X, that you understood that your role in this is to make sure you protect the consumer.

5. What does the post-forbearance loss mitigation process look like for you, and how is your tech supporting that process?

 

Jeff Johnson: You have to have extensive self-help tools so that people can engage in loss mitigation activities on their own, to get their documents on their own.

If borrowers can’t figure out what the outcome looks like and what their options are in a self-managed process, it will not be effective in the long term.

It’s all about creating the right kind of self-help and digital solutions that consumers can easily understand so they can navigate through and get help if they need it. You need digital functions like chat because the last thing that we find consumers really want to do is get on the phone and get into a telephone dialogue when they just really want to sit down and find a solution to protect their home and family, and then move forward. 

And we’re in a zero-tolerance environment, so we’re spending a lot of time making sure that no loss mitigation opportunities get left behind. Your workflow has to be seamless, and if your workflow is seamless and integrated with self-help tools and on-demand human help available when the borrower needs it, you can feel pretty good about the future. 

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For a more detailed look at how CLS is leveraging its technology to guide its borrowers through the final phase of COVID recovery, watch the on-demand webinar here.

*Editor’s Note: Panelist answers are direct quotes when possible but in some instances, their answers have been edited or paraphrased for clarity and brevity.