InsightsA Look Back on Record-Breaking Volumes and What’s on Deck for Loan Modification and Pre-Foreclosure in 2023

Q&A with Steve Crocker, SVP, Pre-Foreclosure Title Services

With record-setting loan modification volume over the last two years, flexibility and technology have been key for ServiceLink’s loan modification department.

According to a FitchRatings report, more borrowers are choosing loan modifications after forbearance plans came to an end.

Steve Crocker, SVP, pre-foreclosure and loan modification title services, shares insights on how his team adapted and overcame the challenges that came with the rapid growth of orders, and with no true signs of slowing down, some of his predictions into 2023.

Q: How did you and your team adapt to ever-changing guidelines and regulations over the past few years?

A: When the pandemic started, we had already started to prepare. We knew we’d be seeing borrowers facing financial hardships because of the pandemic and they were going to need our products and services. As the CARES Act was rolled out in March of 2020, there was an opportunity to partner with our clients in an uncertain market. We worked with all critical vendors to understand what their capacity plans were for 30, 60, 90 days and beyond. As it pertains to government backed programs, we were first to market with all the required changes for Freddie, Fannie, FHA, VA and USDA products and workflows ready for our clients.

Q: What are some of the advantages ServiceLink has that helped you meet those goals?

A: We ran a great operation pre-pandemic, but we really challenged ourselves to review every milestone in the loss mitigation process that we support and identify opportunities for synergies between title, document generation, mobile signing services, and document recordation, as well as to leverage technology, to shorten timelines.

Our leadership team collaborated as a group to brainstorm regarding what we could do to help with the additional volumes. Through those actions, we shortened steps in our workflows and processing of orders. Creating efficiencies and synergies impacted each team’s ability to upstream and downstream in those processes.

Q: What are some of the technologies that your team utilizes to help you get through all the volume?

A: One of the greatest things that's helped us over the years is our Title Management® system, which is our core case management application. We have the ability to monitor every default product from loan modification, foreclosure, post sale and REO within one system of record. With every step in the default process in one application we can offer our clients real time ad hoc reporting and customizable dashboards. These reports allow for our staff to be transparent with our clients, maintain SLAs, and to move the files through the next step in the process.

We also have a lot of different integrations that we've built over the course of the last ten plus years. We have about 70 different integrations with 3rd party applications within the default space.

We are also very proud of our EXOS® Virtual Close application, which is our document generation platform. This system is a game-changer in the document generation space because we can customize templates that meet all state and investor requirements, ensuring recordability at the end of the signing process.

Q: Over the course of the pandemic, how many orders did your team work on and complete?

A: We had a record-breaking number of orders placed within every process we support including title document generation, mobile notary signing, recordation and policy issuance. We were also very fortunate to expand our services with many new and existing clients. The most rewarding part of the growth was seeing the full team effort of our staff and knowing how many homeowners and clients we helped.

Q: What’s on your radar for 2023 in terms of loan modifications?

A: When it comes to the loan mod space, we're always looking strategically anywhere and everywhere we can to improve the borrower experience as well as help with the timelines for our clients. By way of technology, we will continue to challenge ourselves to further automate products and services with additional 3rd party technologies.

We have several clients that are looking to put a toe in the water on eNotarization and the eSign processes. We've really championed a process where we start slow and crawl before we walk, because there are so many complexities. It’s important how you engage with the borrower to make sure they are eligible for eNotarization. We've piloted it by state and by investor with many of our clients, and as it expands, we have a dedicated team focused on expansion across the country.

Q: Will we see more 40-year loan modifications this year?

A: In terms of having 40-year loan mods available, it is something that we have in production today. We follow all investor guidelines extremely closely and when there is a change, the fact that we own our own proprietary document generation technology allows us to flex in different modification terms and change the templates quickly.

We have built out thousands of customizable documents for our clients. When a client has a need and says they need to pivot to this template, this particular cover letter or this particular affidavit, if it’s changing a modification itself in terms, it's something that we can handle relatively quickly in terms of identifying and adapting to the changes, testing that modification and making sure that it has all the components of what the client is looking before it goes into production.

Q: If you had a crystal ball, what do you think volumes in 2023 will look like?

A: I think it's too early to tell, but certainly there's a lot of driving factors that hint that defaults will be on the rise in 2023.

There's a lot of different indicators that we're in a changing market and we’re looking at all things happening around us with rising inflation and high gas prices.

The biggest factor in this market is really equity. There's so much more equity in properties that allows for borrowers to look at all their options. Instead of going to a straight default, there's a waterfall of different products and services, and servicers can work with their borrowers on different workout strategies.

The good news is, regardless of the workout strategy, ServiceLink has a product to help facilitate getting through that workflow, whether it goes through our loss mitigation products, (short sale, deed-in-lieu, or a loan modification) to our traditional end-to-end title products starting with pre-foreclosure, post sale and REO. Where it really all comes together is when you leverage our core title products and add value with our valuations, property preservation and auction divisions to save time and money with your liquidation strategies.

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