Black Knight, Inc. has introduced the discharge of a new case study illustrating how self-service know-how (SST) deployed by mortgage servicers throughout pure disasters can enhance loss mitigation outcomes.

The COVID-19 pandemic considerably impacted the U.S. and its financial system, as the proportion of unemployed Americans shortly spiked to double digits and thousands and thousands of Americans have been in a state of misery as a result of they have been laid off or in any other case unable to work. With the passage of the CARES Act and widespread adoption of forbearance choices by servicers and debtors, the potential for a foreclosures disaster to rival, and even eclipse, that of the Great Financial Crisis was largely averted.

“When borrowers face periods of financial hardship, they need seamless access to qualified assistance options,” stated Joe Nackashi, CEO of Black Knight. “The COVID-19 pandemic brought this fact to light like never before, and as we expect to see an increasing number of natural disasters, it’s in the best interest of both servicers and the homeowners they serve to stand prepared with self-service technology. For borrowers, capabilities that offer convenient access to assistance can make an impactful difference in helping them stay in their homes.”

The “Helping Homeowners in Times of Financial Crisis” case research appears at debtors who use Servicing Digital, Black Knight’s consumer-facing responsive net and native app answer. Servicing Digital offers customers 24/7 entry to detailed, well timed and extremely personalised info and useful instruments about their mortgage, together with a faithful “Disaster” functionality that may be activated by servicers and used to assist them present specialised help to shoppers throughout instances of outstanding want.

This extra performance helps servicers present a broad array of forbearance choices to debtors impacted by disasters. With this functionality, servicers can reply shortly to anticipated spikes in cost help requests with applicable options, together with compensation plans, FHA partial claims, GSE cost deferrals, mortgage modifications and extra.

Initially developed in response to market wants from the 2017 hurricane season, the aptitude was activated for the COVID-19 pandemic to provide debtors a direct, acquainted and safe approach to contact their servicer when it appeared like they could miss or must delay a mortgage cost as a consequence of financial hardship.

Black Knight collected catastrophe knowledge from a consultant choice of 21 purchasers from August 2020 to September 2022 and located that roughly 342,000 debtors interacted with the “Disaster” choice to provoke a self-service loss mitigation request, with outcomes together with:

• Some 139,000 owners committing to new forbearance plans
• An estimated 49,000 extending present forbearance plans
• Roughly 112,000 committing to ultimate mortgage modifications

While most pure disasters have an effect on a comparatively small geographic area and a comparatively small variety of folks, the COVID-19 pandemic offered an uncommon alternative to check the demand and efficacy of SST catastrophe help throughout a broad geography over an prolonged time. In addition to the optimistic borrower affect mentioned above, Black Knight additionally found the next extra SST catastrophe help advantages primarily based on its evaluation of borrower actions:

• Accelerated borrower engagement, giving servicers extra runway to work towards mutually helpful mitigation options
• Configurable workflows permitting for a speedy and adaptive response by servicers to borrower wants
• Increased borrower engagement throughout a time of excessive anxiousness when many debtors have been recognized, traditionally, to keep away from contact with servicers as a consequence of stress, embarrassment and worry of dropping their houses

“While events like 2017’s record-shattering hurricane season or the COVID-19 pandemic may not happen every day, natural disasters appear to be on the rise across the country,” stated Nackashi. “By proactively engaging homeowners who may be struggling to pay their mortgage and empowering them with tools that help them understand their options, servicers can expect positive outcomes that may include higher portfolio retention, increased customer satisfaction and loyalty, greater servicing efficiency, and fewer third-party collections.”

To learn the total report, together with extra knowledge, charts, and methodology, click here.