As servicers work through various periods of forbearance and even exit strategies, it can be hard for them to connect with borrowers. A panel of experts said that’s because they need to speak a different language.
A panel of experts at the Mortgage Bankers Association’s Live – Spring Conference and Expo discussed the importance of communication between borrowers and servicers on Wednesday, saying open communication is critical to building a relationship and trust with the consumer.
The share of mortgages in forbearance continues to retreat from last summer’s highs, but approximately 2.3 million homeowners are still taking a hiatus from their monthly mortgage payments, according to the latest numbers from the Mortgage Bankers Association (MBA).
And more still could be looking and eligible for forbearance options.
“We know there are borrowers who can still take advantage of forbearance plans but have not,” said Sandra Almanzan, Fannie Mae director of single-family community lending. “And so we continue to try to educate them, and we will try to get information to as many struggling borrowers as possible.”
But in order to reach those borrowers, servicers must make sure they are speaking the same language and being empathetic, panelists explained.
“Empathy is absolutely critical, and making sure that we are communicating in a way that not only reaches them, our audiences, in terms of the devices they’re on but also the message itself and how easy it is to digest and direct them to where they need to go,” said Riham El-Lakany, Freddie Mac vice president and chief marketing and communications officer of single family.
Panelists pointed out that even calling homeowners borrowers could alienate them, and said many homeowners are unaware of what a servicer is, what they do for their loan and how to get in contact with them. Terms like forbearance could be unfamiliar to borrowers and using these words could create a disconnect where the consumer doesn’t know what message the servicer wants to get across.
“I am bringing a different perspective to this conversation – what I would consider to be a really important perspective – to the conversation because at the end of the day, we can amplify messages, we can send out texts, but we have to get people to respond,” said Marcia Griffin, HomeFree USA founder and president. “We have to get people to understand why it is important for them to connect with their servicer.”
Gregory Goyne, Mr. Cooper senior vice president of brand, said there are two campaign messages that have worked particularly well in soliciting a response from borrowers. One campaign, “If you’re not ok, that’s ok,” resonated with borrowers considering entering forbearance and another, “Just because your forbearance is ending doesn’t mean you’re on your own,” worked well for those exiting forbearance periods. The campaigns were empathetic and acknowledged today’s challenging times, and Mr. Cooper achieved a 55 percent response rate after using the campaign.
Using this kind of language and speaking directly to the borrower also helps build trust between the two parties. Many borrowers, don’t trust the messages that their mortgage company sends out, Goyne explained.
“It’s a confusing space, and a lot of times they don’t trust that their mortgage company, or any financial services company for that matter, has their best interests at heart,” he said. “Maybe there’s an opportunity to supplement the messages that mortgage companies are already putting out to the borrowers and on their websites, but maybe there’s room for a public service announcement campaign.”
As this year proceeds, servicers must ensure they are putting their resources and investments in the right places to ensure success.
“Services should allocate their resources and understand they need to start to shift things away from the phones and more towards direct borrower engagement, whether it’s mods or other loss mitigation initiatives,” said Patrick DellaValle, Guidehouse director of financial services.
Servicers have stepped up their game over the past year to help borrowers navigate the forbearance process during a confusing time.
The CFPB recently proposed a new rule that would prevent foreclosures for the remainder of 2021 in order to allow ample time for a review period. Before that, the CFPB told servicers to get prepared, because not being ready would not be a good enough excuse for not doing everything they could to prevent a foreclosure wave. It promised to be watching and threatened consequences.
But DellaValle said that in his perspective, regulators have been patient and understanding that servicers have to focus on borrowers first before responding to data requests.