Direct Lending – ConsumerAs Forbearance Numbers Rise to 3.8 Million, Constant Releases Mortgage

Timely Release of AI Module Eases Strain on Lenders and Financially-Stressed Borrowers
PRNewswire PRNewswireMay 7, 20205 min

Constant, a financial technology lender, today announced the critical new addition of the Constant+ Mortgage module along with loan workout add-ons for short sale and deed-in-lieu of foreclosure to its AI-powered software platform.

According to the Mortgage Bankers Association, more than 3.8 million homeowners in America are now in forbearance, representing 7.5 percent of all mortgages. Constant+ Mortgage will help ease the enormous strain on lenders and borrowers by providing a self-service platform to process payment relief requests more quickly, more accurately, and without human intervention.

The new module evaluates a borrower’s hardship and offers appropriate relief, including forbearance, a repayment plan, or a loan modification with greater precision, and without waiting weeks to manually process. Alternative, automated options that allow the borrower to recover quickly include the short sale and deed-in-lieu add-ons. Overall, the module integrates with most servicing and collections platforms, seamlessly.

The COVID-19 crisis has unfolded as a global disaster unlike the 2008 financial crisis. This has resulted in the processing of payment relief plans without proof of hardship or information about how to sustain payments at the expiration. The rolling tsunami of phone calls that will occur as forbearance expires will require trained, knowledgeable staff.  New staffing campaigns with minimal training and a reliance on 2008 playbooks will not be an adequate response.  Accessing employee pools may be challenging due to state mandates and above average unemployment benefits.

“When the initial forbearance plans expire this summer, the variety and complexity of hardships will require more than a one-size-fits-most solution,” says Catherine Powers, CEO at Constant. “Customers will be looking to extend their relief period, kicking off what will likely be a slow and perpetual cycle of ask and receive through 2021 and beyond.”

“The skills required to sustainably underwrite troubled debt will require a higher level of expertise and experience than the initial round of forbearances. We believe that automating this and providing a self-service option is the only scalable solution for what will be a long-term problem” continues Catherine.

“The task of analyzing ability and willingness to pay is extremely personal, and creating empathetic interactions is both art and science,” concludes Catherine. “AI Dan, our conversational bot, acknowledges the borrower’s hardship and reassures that we’re here to help. Creating an empathetic interaction with a bot requires natural language processing but also creative writers with loss mitigation expertise, designers and UX pros. And while AI Dan can process hundreds of thousands of customer conversations 24/7, there is always a human ready to engage or assign an escalation to the servicing team.”

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