Imagine what it takes for something like a snake to swallow and digest a whole pig. It can be pretty problematic, to say the least. The pig — an unusual situation that demands extra resources and attention — strains the python’s system, doing more damage the longer it takes to pass through.

In the context of subservicing, think of the python as mortgage-as-usual: Customers are current, forbearances and delinquencies are low. The pig could be any phenomenon — a financial crisis, a catastrophic hurricane, or a pandemic like COVID-19 — that puts customers at risk of missing mortgage payments. Crises like these send more customers than usual into forbearance.

For subservicing clients, this means paying for loan subservicing without receiving loan payments. The bigger a subservicing client’s load of forbearances, and the longer takes the forbearance pig to pass through, the more costs and expenses they incur, and the less profit they make.

For servicers who don’t keep a close eye on their customers’ payment habits, this means a large, slow-moving pig — and bad news for subservicing clients. But proactive, expert servicing can help you recognize if pigs might becoming, so that you can reduce the number of them, and manage the pipeline and time involved.

At the beginning of 2020, many were optimistic about the year ahead. The U.S. economy had just entered its record 121st month of expansion — its longest sustained period of growth, ever. With the Federal Reserve unlikely to raise interest rates, there was little reason to believe the growth would slow.

Then, COVID-19 struck.

Among the pandemic’s many unfortunate impacts was a remarkable — and near-instant — drag on economic activity. Between February 12 and March 23, worldwide cases grew from 59,287 to 379,469, and the Dow Jones Industrial Average plummeted from 29,551 to 18,421. In the same period, the U.S. unemployment rate jumped by nearly 12 percent, as the number of unemployed persons rose above 20 million. Countries all over the globe were issuing shelter-in-place orders. Life, as we knew it, had changed.

With unemployment rising and salaries reduced, COVID-19 made people more concerned than ever about whether they’d be able to pay their mortgages. This tempted many to take refuge in forbearance. The pig had entered the python: in the first weeks of March, the Mortgage Bankers Association reported a 1270% increase in forbearance requests. 

No doubt, for those in danger of losing their homes, or who direly needed cash on hand, forbearance was the right call. But it wasn’t the right call for everybody. People who didn’t know all there was to know about forbearance (which, let’s face it, the average person probably didn’t) might have thought it meant mortgage forgiveness — that payments during the forbearance period would be cancelled, not delayed. Or, as in times of economic recession, when people liquidate early and cement their losses, panic might have caused them to pick the option that kept their bank account balances the highest in the short-term.

But, note: During the forbearance phase, subservicers are still getting paid. So, as you might imagine, many subservicers don’t take proactive steps to prevent it, or to end it once it begins. 

That’s not how we see things. Long before COVID-19, we had taken proactive steps to manage our customers, rooting out issues before they developed. So, when the world was faced with a crisis, TMS was positioned for just such a pig to move through in the best possible way.

To us, customer service is everything, and long-term trust means more than short-term gain. This has long meant rigorously educating our customer care representatives — our Careologists — so that they, in turn, can educate customers. We have trained our Customer-facing team members to be Customer Advocates, so that each could be a one-stop subservicer. This resulted in 98% customer satisfaction, and a 91% one-call resolution rate.

Because of this solid groundwork, our Careologists have helped stem the tide of forbearance. At the outset of COVID-19, when many companies were delaying new hires, we were actually able to add about 70 Careologists to help handle our customers’ increased servicing needs. Moreover, we were already a sizable work-from-home company, so we didn’t have to spend time and resources adapting to remote office dynamics.

More experts on calls means lower hold and handle times. At a time when many other servicers’ customers have been waiting over an hour on hold for assistance, ours only waited 17 minutes and were able to receive their expert advice and assistance on the first call. Better advice for more people on the first call means more loans being serviced the right way.

This all keeps our forbearance rates well below average. Since early April, TMS has stayed well ahead of the curve. As of late June, about 6% Mortgage Bankers Association (MBA) GSE loans were in forbearance, compared to about 2% of TMS Serviced GSE loans. At the same time, about 11% of MBA GNMA loans were in forbearance, vs. about 9% of TMS GNMA loans.

Fewer loans going into forbearance means a smaller, more easily digestible pig — more revenue for subservicing clients, reduced for a shorter period of time. Perhaps more importantly, keeping people in their homes in trying times means earning their loyalty for years to come.

For many years, subservicing had been weighed down by archaic tech, some of which hadn’t been updated since the 1980s. Relying on that during COVID-19 would be like using Wall Street-era brick cellphones instead of Zoom. It wouldn’t make sense — but inertia had prevented many companies from evolving. Not TMS.

While we couldn’t foresee COVID-19, our proprietary servicing platform SIME (Servicing Intelligence Made Easy) helped us minimize its impact. Since long before the pandemic, SIME has given both us and our subservicing clients unparalleled insights: We can monitor customers’ payment habits, listen to recorded service calls, see documents that have been mailed to and provided by customers, and much more.

Particularly in a challenging time, immediacy is of the utmost importance. Subservicing clients can’t afford to wait multiple days (let alone weeks, or months) to receive up-to-date information on their loans. The more time that passes between requesting and receiving information, the more the pig grows. Dealing with outdated information means reactive subservicing, operating at the mercy of an ever-expanding pig.

But with SIME, our subservicing clients can access detailed reports at a moment’s notice, allowing them to adapt to the most recent updates, and have the peace of mind that comes with total knowledge. Up-to-the-minute data allows us to see at-risk cases long in advance, addressing them before they worsened. So, once we found ourselves in a global crisis, our customers — and, by extension, our subservicing clients — were in much steadier financial positions.

So, even before we were faced with the COVID-19 pig, we had expert service and advanced technology in place that allowed us to be prepared. Because of SIME, we saw it coming and could react in real time — as could our subservicing clients, who have all the latest insights, always at their fingertips.

The Proactive Python

Early this year, in a bullish economic environment, we asked our subservicing clients if they were ready for a surge in mortgage delinquencies. This is because we knew that when things look normal, they’re often poised to become abnormal, and that the best approach to subservicing is one that reflects that.

Because of this, COVID-19 didn’t catch us off-guard. Our proactive approach means we’re prepared to help our subservicing clients through times like this, and whatever may be down the road. COVID-19 is indeed a prize pig, but our high-touch servicing and cutting-edge tech has made it much easier to swallow.