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Mortgage Servicers and Verbal Loss Mitigation During COVID-19

John Zanzarella
April 7, 2020
regulatory rules and compliance

Regulators understand the impact the COVID-19 pandemic is having on consumer and business alike. Federal regulators, including the Consumer Financial Protection Bureau (CFPB) and Federal Deposit Insurance Corp (FDIC), are encouraging consumers impacted by COVID-19 and experiencing difficulties beyond their control in paying certain bills to work directly with their servicer. The recently passed Coronavirus Aid, Relief, and Economic Security Act (CARES Act) includes provisions on forbearance for federally backed mortgage loans.

Because regulators are encouraging the public, and especially homeowners, to reach out directly to their lenders and servicers to request assistance, and with unemployment claims surging, mortgage servicers are already reporting a huge increase of requests to their call centers from borrowers who are impacted by the pandemic.

Many of these conversations likely qualify as loss mitigation applications and, even in this unprecedented time, mortgage servicers must be vigilant in respect to compliance with Regulation X’s loss mitigation requirements.

In the Winter 2020 edition of its Supervisory Report, the Consumer Financial Protection Bureau noted that some mortgage servicers have struggled with the concept of a verbal loss mitigation application. “The Winter 2020 report confirms that servicers must consider the concept of a verbal loss mitigation application and be ready to act when one is received. Servicers who don’t have a process in place to recognize or take in verbal applications should tread carefully,” Bradley Arant states in a recent post.

So, how can mortgage servicers ensure that their call centers have a process in place to recognize and flag verbal loss mitigation applications to meet compliance obligations when they are handling thousands of calls each day?


Through automated call center monitoring, PerformLine is already aiding our clients, mortgage servicers specifically, through the use of sophisticated natural language processing (NPL) to track and flag calls that can be considered the start of “verbal loss mitigation.”  The PerformLine platform automatically reviews every minute of every call to find and flag those calls that can be classified as oral requests and therefore trigger the obligations that stem from receipt of an application (including sending an acknowledgment letter and exercising reasonable diligence to assist the borrower in completing the loss mitigation application) to be sent on to compliance departments for assistance.

This automation is saving clients thousands of people-hours during these critical times which may have been spent manually reviewing calls, allowing them to move those employees to more high-touch operations and avoid hiring headcount to handle calls during these tough economic times.

Using tools like PerformLine to aid in the identification and speed of reply to consumers (during the COVID-19 pandemic or any time) shows that those companies are using good faith efforts to comply with Regulation X.

If you’d like to learn more about how PerformLine is helping other mortgage providers and their servicers, let one of our experts tell you more.

author avatar
John Zanzarella SVP of Sales
John Zanzarella is the SVP of Sales at PerformLine.

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