Over the past four months, mortgage servicers have been inundated by a wave of new guidelines and mandates that threaten to overwhelm their already stressed default servicing operations. Chief among these is the requirement to establish a single point of contact or SPOC for any borrower seeking to prevent loss of their home through one of many foreclosure prevention options.
With record numbers of loans in default, servicers have struggled to handle such borrower requests for assistance. In fact, one of the most frequent borrower complaints concerns their inability to get consistent, accurate information about modifying their mortgage from the variety of representatives they might speak with at their servicer. It is these complaints that have led to the SPOC requirement.
The FDIC, one of the multitude of agencies with oversight of the mortgage industry, said this as they announced their SPOC mandate:
“Having a single point of contact will not prevent all foreclosures, but it will reduce the numbers of avoidable foreclosures, as well as operational risks, associated with foreclosure processes that violate the servicers’ legal obligations.”
While establishing a single point of contact may lessen borrower frustration, it will cause a major disruption for servicers. Moving from a pooled agent contact center operation to one where the borrower speaks with one and only one representative every time they call would require servicers to quintuple their headcount. Even if enough experienced representatives could be found or new ones trained (difficult given the aggressive timelines mandated by the regulators), the costs of SPOC are almost unbearably high.
That's why Varolii has developed a comprehensive SPOC Mortgage Servicing Solution to automate most of the communications required to help move a borrower through a foreclosure prevention process while simultaneously providing them with easy, timely access to their SPOC. We estimate this will reduce demand for new headcount by 15% and could save the servicing industry $100 million per year.
Just as important, it will improve the borrower experience by proactively communicating status, next steps and any actions required on their part as they move through an unfamiliar and undoubtedly worrisome process.