Freddie Mac is undertaking a new initiative designed to align the servicing process to a more customer service focus, especially for distressed homeowners. Yvette Gilmore, Freddie Mac's Vice President of Single-Family Servicer Performance Management, describes the initiative, Reimagining Servicing, in the company's Executive Perspectives blog.
Gilmore says that when a natural disaster strikes its customers are told to "call your servicer" for help with payment arrangements. However, it doesn't always take a disaster for homeowners to need assistance with paying their mortgage. Everyday situations such as an illness, loss of job or of a loved one can throw them into financial difficulties as well.
This is a very stressful time. Freddie Mac's data indicates that the most common time homeowners search for mortgage-relief information is between midnight and 4 a.m. "It's hard to sleep when there are unanswered questions keeping them awake that need quick and reliable answers," Gilmore says. "The same online access to reliable and understandable information that customers want when searching for a home or taking out a mortgage, should be available to that customer struggling to make their mortgage payment." And servicers say they want to deliver self-service capabilities and other innovative solutions that help them assist homeowners.
The Reimagine Servicing initiative is designed to redefine the servicing model to provide more value to clients and move the industry forward in helping homeowners, she said. The focus is to make processes simple - reduce costs for servicers and minimize credit losses.
Freddie Mac loan Servicers will see changes in three key areas: technology, data, and process.
On the technology front, the company is building a single sign-on portal for all servicing applications; integrated tools throughout the servicing lifecycle and faster expense reimbursement. With data, the process of how it is collected, leveraged, and integrated will be changed to increase speed, transparency and efficiency.
Gibson says that over most of the last decade, Freddie Mac has had some of the lowest serious delinquency rates of any company in the industry, with over 1.2 million homeowners aided in keeping their homes; thousands more are assisted each month. "Now is the time to take a step back and look at the servicing side of our business to deliver a better experience for our clients (the servicers), so their customers can have a better experience when they need it the most, day or night."
This means reimagining servicing to simplify and standardize investor reporting, automate manual processes, eliminate duplicative ones, and streamline the post-foreclosure experience.
Among the changes to facilitate the last of these is the elimination of many of the responsibilities that servicers have traditionally had for property post-foreclosure. This includes paying homeowner association fees, property taxes, and lender placed insurance premiums as well as property inspections, and maintenance. Instead, Freddie Mac has employed a new vendor, Green River Capital, to take over these duties. Green River will assume responsibility for assets currently in Freddie Mac's real estate owned (REO) inventory as well as newly acquired properties on July 15.
Gilmore says the change will expedite the servicer claim processes and reduce the number of claims. Claims may also be submitted earlier in the process.
She concludes, "A foreclosure is not good for anyone - the Servicer, the investor, the company guaranteeing the loan, and especially the homeowner and family. Unfortunately, it's not always avoidable. However, when homeowners get back on their feet after a foreclosure or short sale, and then returns to owning a home, we want them to say their Servicer did right by them, was a trusted advisor and exhausted every possibility - so that the homeowner chooses to become a customer once again."
