Servicers Must Embrace Proactive Technology Based Customer Service in the Aftermath of Hurricanes Helene and Milton
Across the country, loan officers, lenders, servicers, and homeowners are facing the burden of what to do following the devastating hurricanes that been ravaging the Southeast – particularly Florida and North Carolina. With many homes flooded, destroyed, or even missing in some cases, some are asking questions about loss mitigation options, which of course will have a big impact on servicing in these areas. While there are still lots of unknowns, technology is going to be a vital tool for servicers and homeowners navigating the loss mitigation process in the aftermath of these horrible disasters.
The widespread impact of Hurricanes Milton and Helene on the housing market is tremendous. According to a Bank of America analysis there are roughly 833,000 mortgages within hurricane-affected areas and securitized into residential mortgage-backed securities, totaling $96 billion in unpaid principal balance. 53% of the mortgages impacted originated in Florida and 19% originated in North Carolina. Similar to other major natural disasters, it is expected that up to 5% of borrowers may become delinquent over the next 12 months.
Hurricanes Milton and Helene are expected to be $50 billion disasters – a distinction which only eight other hurricanes have ever reached. However, what really sets these disasters apart and muddies the water for the future of the Southeast’s housing industry is that it is estimated only 5% of victims had proper insurance to cover the damages they received. In North Carolina, where the devastation from Hurricane Helene was the most intense and entire neighborhoods were destroyed, only 3% of homeowners had flood insurance.
Shortly following Hurricane Helene, the Federal Housing Administration (FHA) issued a reminder guidance on the available loss mitigation options in the presidentially declared major disaster areas. The guidance outlined the extended forbearance periods and 90 days (or more) foreclosure moratoriums. For homeowners undergoing extreme distress and potential losses of their homes, understanding the complex loss mitigation options available is often not top of mind and spending time to call their servicer is not realistic. This is where servicers, with the assistance of real-time data and AI tools, have an opportunity to step up and provide proactive customer service to homeowners in need.
With a proactive and technology-assisted approach, servicers are enabled to deliver a tailored solution to every consumer. For servicers to carry this out in an efficient and cost-effective way it will be critical to leverage AI and incorporate real-time data. Every investor has their own unique response and loss mitigation options in the aftermath of hurricanes.
These regulatory changes happen quickly and all at once. Manually keeping track of these options for each individual homeowner takes an employee hours and introduces compliance risks. For servicers, the efficient, smart, and safe path forward is the embrace of technology tools. For homeowners, having a reliable servicer who does the work for them will provide peace of mind and support during the toughest of times.
Sagent’s Dara, a first-of-its-kind mortgage servicing platform, leverages real-time data to mitigate risk and deliver the best outcome for homeowners during challenging times. Dara, the first platform to unify all data and user experiences, is made up of six root components: Core, Data, AI, Default, Movement, and Consumer. Automation and real-time data are at the heart of Dara Loss Mitigation, increasing efficiencies for both servicers and homeowners. Dara delivers an end-to-end digital experience, collecting all necessary information needed to complete a hardship claim within a single, straightforward question-and-answer application.
Even as America’s $14 trillion servicing industry faces significant unknowns in the aftermath of the hurricanes, Dara Loss Mitigation uniquely equips servicers to meet consumers where they are with the incorporation of real-time data and AI tools. Dara provides homeowners with real-time updates and visibility into the status of their claims and submitted documents. This transparency in the loss mitigation process provides peace of mind to homeowners facing hardship, while also reducing the volume of inbound calls so front-line servicing teams can focus on solving problems that require the human touch.
Featuring greater transparency and opportunities for personalized service, Dara allows servicers to strengthen relationships with homeowners during the toughest of times. Workflow automation and real-time data power faster decision-making, allowing for resolutions to be made in hours, not days. The connectivity of Dara’s consumer portal means homeowners can quickly and easily indicate they need assistance online versus needing to take time to call their servicer when they need to be more focused on recovery.
Natural disasters – like Hurricanes Milton and Helene – are not going away. The damage from these devastating storms will impact the housing ecosystem and loss mitigation process for months or even years to come. It is clearer than ever before that for servicers to stay relevant and meet the needs of their customers in real-time, they must embrace technology to be prepared to guide homeowners through the next storm.
Matt Tully serves as the Chief Compliance Officer at Sagent.