Menu
A regional bank faced significant challenges in its default servicing and loss mitigation department, primarily due to process deficiencies and reliance on an underperforming outsourced vendor. This led to errors in loss mitigation underwriting, negative customer impacts and a lack of effective internal oversight. The bank also lacked a structured approach to claims processing for Fannie Mae loans, which caused financial losses and inefficiencies.
We began by auditing the outsourced vendor’s work, identifying and rectifying errors in loss mitigation underwriting and prior modifications. Customer impacts were assessed and remediated as needed. To regain control of the underwriting process, the bank decided to bring operations in-house. This required the development of detailed procedures for loss mitigation, default processing, and customer interactions. We also trained staff on new underwriting and customer interaction processes and implemented performance management scorecards to enhance consistency and efficiency.
Simultaneously, we uncovered underutilization of the bank’s Black Knight managed services platform. By updating the system and customizing templates for different default areas, we enhanced automation, aligning the platform more closely with the bank’s operational needs.
Our efforts delivered measurable improvements, including a 70% reduction in the average age of defaulted accounts. Process enhancements ensured sustainable in-house operations and resolved lingering aged accounts. We also redefined and documented the bank’s claims process for Fannie Mae loans, enabling accurate reimbursement for loan servicing advances. This improvement alone is projected to generate substantial savings, contributing directly to the bank’s bottom line. By addressing both immediate deficiencies and long-term operational needs, the project not only stabilized the bank’s loss mitigation function but also positioned it for sustained efficiency and compliance.