When banks need to undertake large-scale process improvement and remediation initiatives, they often seek our banking expertise to lay the foundation for best practices adoption and lasting process improvements.
We recently supported our client in remediating process deficiencies in their default servicing and loss mitigation department. We were tasked with auditing the work of an outsourced vendor responsible for loss mitigation underwriting. Our team identified and remediated vendor mistakes, ensuring that all prior modifications and workouts were corrected. We also evaluated any negative customer impacts from the vendor and contacted customers as necessary to remediate any effects.
After remediating issues with the outsourced vendor, the client decided to bring the underwriting process in-house, which required a series of activities including:
In the course of our work, we also discovered that the client was not fully utilizing its Black Knight managed services provider (MSP) to maximize automation. In addition to performing system updates, we configured the system to match the bank’s needs and created templates for different default areas to increase automation.
Default Servicing: Making an Impact
Measurable improvements
Our work in overhauling the client’s default servicing process led to a significant improvement in aged accounts, reducing the average age of accounts by 70%. This improvement was achieved by addressing aged accounts individually and improving overall process efficiency to sustain in-house operations.
We further enhanced the bank’s claims process for Fannie Mae loans, which needed to be better defined and documented. Because the bank lacked a proper claims process, they had not been getting fully reimbursed for advances made to service Fannie Mae loans. This process improvement alone will yield significant savings that go right to the bottom line.
