In 2011 the Department of the Treasury, in an attempt to alleviate some of the problems borrowers were having trying to take advantage of its Making Home Affordable (MHA) program (the parent of HAMP and other foreclosure mitigation program) instituted a new requirement called Homeowner Single Point of Contact or SPOC. Wednesday it issued a report, Making Contact: The Path to Improving Mortgage Industry Communication with Homeowners which provides an overview of how and why the SPOC guidelines came about and describes the implementation of the guidelines by the nine largest MHA services of non-GSE loans.
Report data was collected through a survey of the servicers, discussions with their personnel and through observations of performance. The authors say it does not offer a conclusion on the best way to implement SPOC as "there may not be is not one 'right' answer." It is intended as a snapshot of the approaches being taken across the industry.
Mortgage servicers were ill-equipped to deal with the wave of mortgage delinquencies that began to hit their servicing portfolios in 2007. Their contracts are with and fiduciary duties are to the investors who own the loans and their job is to collect mortgage payments, manage escrow accounts, and remit mortgage proceeds to investors; thus their customer service was oriented toward the investor. Homeowners cannot choose their servicers and have few rights in the relationship and until recently had few opportunities for redress when they were ill treated. To quote the report, "It is not surprising then that many struggling homeowners, who tried unsuccessfully to communicate with their servicers, stopped opening mail, or responding to phone calls from those servicers."
As delinquencies grew servicers were unprepared for their new role. There was no standardized process for assisting homeowners and when mortgage modifications did occur, they often increased, not lowered, monthly payments.
In attempt to mitigate the growing foreclosure crisis, in March 2009 the Obama Administration launched what is now called the MHA and set a number of requirements for participating servicers to establish standards for modifications and improve their customer service relationship with potential and actual program participants. Still the complaints from borrowers and from those attempting to assist the borrowers such as housing counselors, Congressional office staff, and legal representatives, continued to mount, and some of them were tragic and grabbed media attention. Borrowers told of hours spent on the phone, being shuffled from department to department, lost documents, foreclosures completed by one servicing division even as modifications were proceeding with another. "In this crisis, when millions of homeowners had trouble paying their mortgages, whether or not servicers were able to communicate effectively with homeowners has mattered a great deal."
In May 2011, in an attempt to improve communication
within the servicing industry, Treasury issued a directive requiring the
largest servicers participating in MHA to implement SPOC and to assign a single
point of contact for each homeowner potentially eligible for MHA to work with
the homeowner through the entire application and resolution process. The directive became effective
on September 1, 2011 and
November 1, 2011, for new and existing
loss mitigation cases, respectively.
A SPOC requirement was also
included in the servicing standards
to in the National Mortgage Settlement,
and a similar requirement
to as "continuity of contact") has been included
in the servicing standards recently proposed by the Consumer Financial Protection Bureau (CFPB).
Treasury report says that the fact
that the National Mortgage
Settlement and the
CFPB, as well as other Federal and state regulators,
are adopting similar SPOC
requirements will help
ensure that more personalized help
homeowners will continue after
The report offers the following general summary
of the program as it exists today.
now have dedicated personnel who will work with them from their first contact
with the program. Servicers have reorganized
their homeowner communication
areas and expanded staff capacity.
Across the nine servicers surveyed for this report
there are more than
12,000 individuals whose primary, if not sole,
responsibility is to communicate with homeowners
assistance. Nearly 6,000
other personnel are assigned
SPOCs collect and process documents
have emerged. Seven servicers use a "Direct
Model" whereby an individual SPOC serves
as the relationship manager, one
uses a "Pod Model" whereby there is
a team of SPOCs available to assist
the homeowner, and one
uses an "Appointment-Based Model" whereby a customer service representative takes
inbound calls and schedules
Servicers communicate with homeowners in different ways. While all servicers
make their SPOCs
homeowners by phone,
also employ email or
web-based interaction capabilities. To insure contact when a SPOC is
unavailable some servicers use voicemail,
while others route the call to another SPOC.SPOCs are expected
both to handle incoming calls from
homeowners and to initiate outbound calls to homeowners, as circumstances
SPOCs are responsible for discussing liquidation
options (short sale or deed-in-lieu of
foreclosure) with homeowners
in the event a home retention
option is not feasible, with the
SPOC remaining as
the primary or secondary point of
contact for the homeowner for 30
to 60 days after the close of the short
sale or the foreclosure process.
no standard caseload for SPOCs either as a target or in practice. Across servicers,
actual caseloads range from 64 to 210 homeowners per SPOC.
Servicers are developing different
methods of calculating SPOC caseload
to optimize their effectiveness
since not all cases
require the same level of effort.
which SPOC performance is
measured appear to vary widely, and include traditional call center metrics such
as volume of calls
and call abandonment
as newer metrics such as
average days from the
receipt of initial homeowner documents to completion of
modification package or the number of loss mitigation resolutions per SPOC.
remain in improving
how servicers communicate with
homeowners. The likelihood
of better outcomes for homeowners has improved but it is still too early to tell
whether the industry will improve its customer service to the
The SPOC model is in the process of
maturing and there is
likely to be a dynamic environment, with servicers continuing to experiment
with different concepts
and new promising practices.
There are programs to provide training
SPOCs, benchmarks for managing SPOC
caseloads, and performance metrics to measure SPOC effectiveness.
There are many
similarities and as many differences among the ways servicers are approaching
and managing SPOC. The report details, servicer by servicer, the approach each
takes in its service model, staffing levels, assignment of responsibilities,
The report concedes there are a number of questions with
respect to best practices for SPOC
that are yet
to be answered. These
include the timing of SPOC assignment, SPOC
SPOCs communicate with homeowners,
and SPOC compensation and
Although it is outside the scope of this report, the advent and
maturation of SPOC
in the servicing industry may also play a role in,
and be affected
by, a broader conversation
about changes in the
overall servicing industry as
as the methods by which