Natural disasters are unpredictable, but your response, whether you are a mortgage lender or a homeowner facing one, doesn’t have to be. Early emergency preparation, proactive communication, and solid solutions after-the-fact should all come into play when devising your natural disaster response plan. For mortgage lenders or mortgage portfolios, engaging a mortgage subservicer to service your loan portfolio is key to your emergency plan. With over 40 years of experience, LoanCare® has the plan, people, and predictive technology in place to support our clients and homeowners through any natural disaster event.
As a homeowner with a mortgage loan, Ready.gov suggests that your emergency kit should include “Important family documents such as copies of insurance policies, identification and bank account records saved electronically or in a waterproof, portable container”. This will allow you to contact your mortgage lender and mortgage servicer to discuss your situation and assist you.
What are natural disasters, and which events do they apply to?
The Department of Homeland Security (DHS) defines a natural disaster as including “all types of severe weather, which have the potential to pose a significant threat to human health and safety, property, critical infrastructure, and homeland security.” Although we often think of natural disasters as occurring seasonally, by their very nature severe weather events can arise without warning and be unpredictable in size and scale. Natural disasters include winter storms, tornados, hurricanes, flooding, wildfires, earthquakes, or any combination thereof. Natural disasters frequently lead to localized, regional, or national periods of uncertainty, instability, disruption, and economic loss.[1] Though some regions of the Unites States may be more likely to experience specific natural disasters, nowhere is immune from their impact, which is why is it important for everyone to be prepared in the event a natural disaster strikes.
Prepare your homeowners before the unexpected becomes a reality.
Most homeowners likely know to have a first aid kit and emergency food stocked in their pantry in case of a natural disaster. However, they may not know or think of the importance in having a plan regarding their home finances, especially in cases where the disaster event is prolonged and / or impacts their income.
Review and update payment and account information regularly
Although homeowners impacted by a natural disaster may be eligible for loss mitigation programs and/or mortgage assistance funds, having a plan in place to maintain payments during a disaster period offers some peace of mind while the application and approvals process gets underway following a qualifying event. Auto-draft (aka automatic payments) is a great way to take uncertainty out of the equation and ensure your homeowners stay current on their mortgage loans.
It is also important that homeowners regularly update their account information so that they can be reached in the event of an emergency or natural disaster. This may look like updating their auto-draft payment method, phone numbers and mailing addresses, name changes, and / or email addresses. Encourage your homeowners to review their account at throughout the year and after major life events.
Documents to have on hand
If your homeowners are experiencing the impact of a natural disaster, there are certain documents they’ll need to have on hand or have quick access to in order to swiftly get back on track. In addition to personal information (documents like drivers’ licenses, social security cards, birth and medical records, etc.) homeowners should make sure they’ll have access to their:
- Mortgage loan number
- Insurance provider
- Insurance policy number
- Copies of insurance policies for each type of coverage (flood, hazard, earthquake, etc.)
Encourage homeowners to sign up for eStatements
It is important that homeowners continue to be able to receive their mortgage statements, even if mail is unable to be received at their property. Encouraging them to sign up for eStatements means they’ll always have access to their mortgage information, regardless of their location.
How a mortgage subservicer can help support your homeowners experiencing a natural disaster
Mortgage subservicers like LoanCare offer clients, and their homeowners, stability and consistency during natural disasters. Licensed in all 50 states and US territories – and with employees spanning locations, time zones, and languages – LoanCare has help available no matter when or where an event occurs. With over 40 years in the industry, our team has the knowledge and experience to navigate through any type of natural disaster and lead our homeowners to a positive resolution.
LoanCare Analytics™, our proprietary data analytics tool, allows our teams and clients alike to quickly identify populations within a portfolio that are in the path of a predicted natural disaster such as a hurricane. Homeowners affected when an emergency occurs may miss their monthly mortgage payment, and knowing ahead of time who is at risk is the first step. From there it is possible to use this information to proactively reach out with support options, staff the Contact Center accordingly in anticipation of increased homeowner interactions, and follow up to effected zip codes to inform homeowners about their options for forbearance and homeowner assistance through the Federal Emergency Management Agency (FEMA).
Additionally, account-based marketing options are available to clients wishing to personalize the homeowner journey with white labeled email and letter campaigns tailored to their homeowners’ experience. These can include campaigns reaching out ahead of busy storm seasons with reminders to update account information, tips & tricks to prepare ahead of storms, and assistance solutions based on eligibility in the wake of an event.
In the event that client portfolios are impacted beyond the solutions offered by the traditional servicing model, Velocity Servicing™, a LoanCare Division, is available to be leveraged to keep the most distressed loans on their path to performance while reducing overall cost without the need for transfers or additional boarding fees. Already on the LoanCare platform, the loans are tagged to the Velocity team for high-touch servicing, prioritizing the best opportunities for resolution using data analytics to drive payment success.
If you are interested in enlisting the help of a subservicer who is experienced in assisting homeowners through every kind of natural disaster, who can quickly get them back on the road to stability, contact LoanCare today.
Homeowner Disaster Planning FAQs
Should I file an insurance claim if my home is damaged by a natural disaster?
If a natural disaster has damaged your home, the answer is yes, you should file a claim with your insurance company. Once your claim has been filed, contact your mortgage servicer’s Loss Draft department which will help you determine the next steps. More information about how to file a claim is available to homeowners on the myloancare website. Homeowners whose mortgage loans are subserviced by LoanCare can contact our Loss Draft department at 1-866-822-3434.
Can I apply for financial aid?
Yes, homeowners may qualify for a low-interest-rate disaster loan through the Federal Emergency Management Agency (FEMA) up to $40,000 for clothing, furniture, cars, and appliances and up to $200,000 to replace their primary residence. More information can be found on the FEMA Disasters & Assistance website.
Are there resources available to help in my area?
Yes, many local organizations provide resources to homeowners impacted by natural disasters. The LoanCare area locator provides a list of federal, state, and local resources for housing, home repair, food, utilities, and other types of assistance. Click here or visit the myloancare.com Mortgage Assistance website for more details.
Should I contact my mortgage loan servicer if I experience a natural disaster?
Yes, it is important to contact your mortgage loan servicer if you experience a natural disaster. They can provide guidance and assistance during this difficult time. They may be able to offer options such as forbearance or loan modifications to help you navigate the financial challenges that can arise from a natural disaster. It is recommended to reach out to them as soon as possible to discuss your situation and explore available options.
What does a mortgage servicer or subservicer do?
A mortgage servicer or subservicer is a company that handles the day-to-day management of a mortgage loan on behalf of the loan owner or investor. Their responsibilities typically include:
- Collecting Payments: Mortgage servicers collect monthly mortgage payments from borrowers, including principal, interest, and escrow for taxes and insurance.
- Customer Service: They serve as the primary point of contact for borrowers, addressing inquiries, providing account information, and assisting with any issues or concerns related to the mortgage.
- Escrow Management: Servicers manage escrow accounts, which hold funds collected for property taxes and insurance. They ensure that these bills are paid on time.
- Loan Administration: They handle various administrative tasks associated with the loan, including processing payments, updating account information, and managing loan documentation.
- Loss Mitigation: In the event of financial hardship, servicers may work with borrowers to explore options like loan modifications, forbearance, or repayment plans to help prevent foreclosure.
- Investor Reporting: Servicers provide regular reporting to mortgage investors, including the status of loans, payment history, and other relevant information.
It’s important to note that while the loan servicer manages the day-to-day operations, they do not own the loan. The ownership of the loan may be held by a different entity, such as a bank or an investor. However, your loan servicer is your first line of communication when responding to a natural disaster that affects your ability to make your monthly mortgage payments.
What are the 3 C’s of disaster planning?
The 3 C’s of disaster planning help you protect your family members, property, and future.
- Communication: Effective communication is crucial during an emergency, and being prepared means communicating with your family, as well as insurance companies, financial institutions, and of course your mortgage servicer. It involves establishing clear lines of communication, both internally among team members and externally with stakeholders. This includes having a plan for disseminating information, providing updates, and coordinating actions.
- Coordination: Coordinating efforts across your family, neighborhood, service vendors, and agencies that can assist you. This involves defining roles and responsibilities and ensuring collaboration and cooperation among all involved parties.
- Continuity: Your community and service providers, including your mortgage servicer have disaster plans focused on maintaining essential functions and services amid disruptions. It involves identifying critical processes, systems, and resources, and developing strategies to ensure their continuity during and after a disaster. This may include backup systems, alternate locations, and contingency plans.
By prioritizing communication, coordination, and continuity, families, communities, and organizations can better prepare for and respond to disasters, mitigating their impact and facilitating a smoother recovery process.
