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Targeted Surveillance and Loan Review
Loan losses can
be mitigated through effective servicing practices. However,
problem loans are more time-consuming and frequently neglected by many
servicers, resulting in drawn-out delinquencies and losses to you.
Monitoring the effectiveness of your servicer prevents
loan losses by identifying problem loans earlier in the servicing
process, and providing remedies that can prevent default, quicken
bankruptcy/foreclosure processes, lessen predatory exposures, and lower
overall losses.
BPA's Targeted
Surveillance and Loan Review program
provides a pro-active and cost-effective alternative to post-mortem analysis of high loss loans.
Unlike Credit Risk Management contracts which base the cost of servicing
oversight on the principal balance of the entire portfolio (in which
most loans will perform without any oversight), BPA's Targeted
Surveillance pricing is based on a pool of potential problem loans.
On a
regularly-scheduled basis, we screen your portfolio and identify loans
with leading indicators of potential loss or predatory issues.
Some of the loan-level triggers we look at include:
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Market value trend
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Repetitive bankruptcy filings
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Extended foreclosure timelines
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Advance thresholds
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Disputes and litigation
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Payment plan defaults
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Projected loss severity.
After potential
problem loans are identified, we look at how frequently each trigger
occurs in the portfolio and then select a sample of problem loans based
on the risk potential and frequency of the triggers. Each loan in
the resulting sample is then examined in detail to determine how well
the servicer has performed in every phase of the process during the
loan's life. For example, we evaluate the servicer's performance
in relevant areas of Collections, Customer Service, Advancing,
Bankruptcy, Foreclosure, Valuation, Payment Posting, and REO Marketing
for each sample loan.
We
provide you with a detailed evaluation that quantifies the effect of the
exceptions and identifies corrective actions that can be taken while there
is still time to mitigate the loss.
BPA's Targeted
Surveillance is much like a best-practices review based on adverse
selection. It is a focused approach toward
prevention, rather than an after-the-fact analysis of errors.
Contact Us
For additional
information on Loan Servicing Reviews, call 954-938-3000.
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