DS News - Bank of America

» VISIT US ONLINE @ DSNEWS.COM 77 It has now become possible for servicers to pursue a combined-services approach for a number of functions in the conveyance process to effectuate "collateral loss mitigation." ese services include: Hazard Claims Processing Filing claims with hazard insurance carriers may seem straightforward—and can be—unless the property has a government- insured mortgage loan attached to it, in which case it becomes specialized work. is requires a well-trained staff, advanced technology, and the ability to collaborate closely with servicers and their other service providers, such as property preservation companies. When performed properly, servicers can reduce their loss severity significantly by filing hazard claims properly and resolving claims within statutory timeframes. is work also requires the company to employ licensed public adjusters, which puts it beyond the reach of most servicers and is therefore often outsourced. Investor Claims Losses that the servicer incurs during the servicing of FHA-insured loans can be claimed from HUD, reimbursing the servicer for certain expenses and reducing overall loss severity. is can mean reimbursements for title fees, attorney fees, property preservation costs, and unpaid principal balance, but only if the party filing the claims knows how much can be claimed and does so within the required timelines. Fannie Mae and Freddie Mac also offer a claims process to servicers which can return funds to the services as long as they file the claims within stipulated guidelines. Servicers who choose to handle their own investor claims process encounter significant technology and staffing expenses, making this area a prime candidate for outsourcing to a specialty services provider. Private Mortgage Insurance Claims e vendor that the servicer chooses to file investor claims will also likely provide assistance with filing claims with private mortgage insurance companies. ese firms have strict requirements that can cost servicers money if they fail to follow the guidelines when filing. THE BENEFITS OF BUNDLING A combined collateral loss mitigation strategy offers all of the benefits that servicers have come to associate with bundled services while ensuring consistent, high-quality outcomes throughout: Faster processing By combining the processing of a number of related services on the same, advanced technology platform, a specialty service provider can provide quality outcomes faster than a multisiloed approach. For example, although specific results will vary by servicer, we have seen a significant reduction in processing time when combining aspects of the hazard claims adjustment and investor claims management processes. In some cases, as many as 10 days are shaved off the overall claims process, saving clients hundreds of dollars per property on portfolios of several thousand loans, while also decreasing their risk of interest curtailments and other negative outcomes. Lower vendor management costs e costs of finding a vendor and performing due diligence on the proposed partner are significant and can add up to a large expense even before a service is ordered. Managing the vendor on a day-to-day basis, scoring the vendor's performance, and then performing periodic audits of the vendor's operation are time consuming and expensive for the servicer. Every additional function that can be performed by an existing vendor reduces the overall vendor management costs. As servicers continue to formulate their responses to the post-crisis business environment, the imperative to reduce costs while ensuring quality outcomes remains top of mind. Due to the changing landscape, servicers now find that opportunities exist to outsource complementary services to specialty service providers, thereby enjoying the economic benefits of a multiline relationship without compromising quality. Particularly in the area of conveyance-related services, servicers have the opportunity to save money while improving effectiveness by partnering with a provider that can bundle hazard claims adjustment with investor and private mortgage insurance claims services. "Due to the changing landscape, servicers now find that opportunities exist to outsource complementary services to specialty service providers, thereby enjoying the economic benefits of a multiline relationship without compromising quality." COVER STORY INDUSTRY INSIGHT INDUSTRY INSIGHT INDUSTRY INSIGHT

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