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:

  • Market value trend
  • Repetitive bankruptcy filings
  • Extended foreclosure timelines
  • Advance thresholds
  • Disputes and litigation
  • Payment plan defaults
  • 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, please contact:

Desiree Daly at 954-832-3558 or ddaly@bostonportfolio.com