Loss Mitigation Strategies
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Learn how to effectively and quickly implement your loss mitigation program.
Loss mitigation remains a work in progress for mortgage servicers. This is problematic because residential mortgage defaults are off record highs, but still remain high by historical standards. In addition, the Bureau of Consumer Financial Protection (CFPB)'s Mortgage Servicing Rules - which mandate detailed and complex loss mitigation procedures - are a focus of CFPB examination and enforcement efforts. For these reasons and others, a robust and effective loss mitigation program is critical to any business that engages in residential mortgage loan servicing. This topic will identify the goals of a successful loss mitigation program and the various types of loss mitigation prevalent in the market today. Learn how to implement those goals, provide an overview of current best practices in loss mitigation, and offer practical advice on how to successfully implement, manage and maintain an effective loss mitigation program. Defaulted loans are the bane of any servicing business, impacting investor relations, customer relations, risk management and above all cost. This information is critical for employees at every level of a servicing business, from officers and directors, to in-house legal staff, to the managers and employees of the loss mitigation department, to ensure that the entire organization knows how best to effectively and quickly implement your loss mitigation program.
AuthorsThomas M. Hanson, McGlinchey Stafford PLLC
Why Should I Care About Loss Mitigation?
• Defaults Are off Record Highs, but Still Well Above Historical Average
• Mortgage Servicing Rules - Very Detailed Loss MIT Requirements Which Are a Focus of CFPB Examiners
• Litigation Avoidance/Resolution
What Are the Goals of My Loss Mitigation Program?
• Comply With the Law - Brief Overview of MSR Re Loss Mitigation
• Holistic Approach - Loss Mitigation Starts Before Default
• Retain Your Customer
How Do I Achieve Those Goals?
• Excellent Technological and Human Resources Working Seamlessly
• Broad Array of Loss Mitigation Options
• Only Offer What You Can Effectively Process/Handle
• Clear Documentary Requirements
• Vendor Management/Relationships
Special Consideration for Loans in Contested Litigation
• Loss Mitigation Is the Best Way of Settling a Lawsuit Early
• Usually Means a Loan Modification, but Others Available as Well - Reinstatement, Loan Assumption, Short Sales
• Have Different UW Requirements for Litigated Loans
• Have Dedicated Support for Litigated Loans, and Don't Overwhelm Them
• Provide a Channel for In-House Legal to Overcome Some Traditional Roadblocks to Loss Mitigation