Your Collections Team Is About To Be Busy
Updated: May 18, 2022
The can has been kicked down the road for a while, and it’s about to end up at your institution’s front door. Did you know that there are currently over 2 MILLION American homeowners who are delinquent on their mortgage, with 1.5 million of them over 90 days delinquent? Foreclosures were halted during the pandemic, but as of August 1st their federal foreclosure protection has ended. 1.8 million homeowners are currently in a forbearance agreement, but most of those are coming to an end in the next two months as well. So, what now? (Cue the theme from Jaws.)
On the positive side, Congress has approved $10 billion in federal assistance to help homeowners pay off debt, but unsurprisingly those funds are moving slowly and many states still have not decided how to allocate those funds anyway. Homeowners with federally backed mortgages may be eligible for a payment reduction, but those decisions will need to be facilitated through the mortgage servicer. For some, loan modifications will be an option. For others, permanent deferral of balance owed until payoff. Unfortunately for many, foreclosure will be the inevitable result. Some might call this a servicing nightmare.
The bottom line is something has to give, and it’s important for lenders to ensure that ‘something’ isn’t their collection team’s collective sanity. Having a plan in place for the coming months will be crucial, not just for homeowners in debt, but for the institutions holding that debt. Have you discussed with your collections team what your institutional course of action will be? Is your current collections software capable of tracking the sheer volume of information and data it will need to as these individual loan decisions are made? Do you feel you have technology in place that will assist in making these crucial decisions, as well as keep up with the rapidly evolving legal responsibilities of mortgage holders?
If the answer to any of these questions is unable to be determined, now is the time to consider investing in technology that will help eliminate your pain points before they are exposed. Coastal Outsourced Solutions is here to help, offering innovative technology that you can rely on to guide you through these times both efficiently and compliantly. Contact us today to learn more about how a partnership with COS might be the best decision you can make!
– Richard Fernandes