Fannie Mae: SMDU: A Helping Hand for Borrowers and Servicers

Investor Update
September 8, 2015

The Housing Industry Forum released an article discussing the benefits of the Servicing Management Default Underwriter (SMDU).

The efficiency, certainty and simplicity that loan servicers have gained by using Servicing Management Default Underwriter™ (SMDU™) add up to an even more profound benefit–empowering servicers to give their customers who are delinquent on their mortgages timely and accurate decisions to avoid foreclosure.

“Our primary goal is to offer the borrower a helping hand,” says Ron Malik, vice president of collections and loss mitigation at Dovenmuehle Mortgage. “We want to help them find a retention solution to stay in their property or, if they’re looking at a liquidation, identify the right solution to walk away gracefully. SMDU allows us to look at all of those options at the same time so that we’re able to understand which solution best helps borrowers resolve their hardship.”

SMDU, introduced by Fannie Mae in 2011, simplifies the eligibility determination for all Fannie Mae loss mitigation programs, enabling servicers to confidently provide faster workout decisions to homeowners who are at risk of foreclosure and for whom time is of the essence.

This free tool ensures Fannie Mae’s loss mitigation policies are correctly interpreted and deployed in a way that significantly cuts cycle times, costs and uncertainty for loan servicers.

“SMDU clearly offers us the ability to work in a more efficient and accurate manner with regard to Fannie Mae’s modification eligibility requirements,” says Michael Small, director of loss mitigation at CitiMortgage. “Essentially, we replaced a very manual process that we previously used to decision Fannie Mae modifications with one that is now fully automated due to our direct integration with SMDU.”

Removing Risk

When a borrower becomes delinquent, servicers are on the front line to help them find a solution. As loss mitigation options have become more diverse and the decisioning criteria more specific, servicers were challenged to keep up with the rapid pace of change. SMDU was developed, in part, to help servicers manage those challenges.

“Our initial focus with SMDU was to ensure that Fannie Mae loss mitigation policy was being interpreted and executed correctly and consistently from servicer to servicer and from homeowner to homeowner,” says Pat Kopins, director of product development at Fannie Mae. “Homeowners should receive the full benefit of our policy regardless of who services their loan. We wanted to provide a solution to servicers that, no matter how fast changes were happening, both borrowers and servicers received the benefit as soon as possible and with as little effort as possible.”

In addition to the risk of misinterpreting loss mitigation policies, such policy changes bring costs and other risks to servicers.

“Every change represents some level of investment for servicers,” Kopins says. “To implement a policy change, they put time, resources and energy into it. They have to understand and interpret the policy, make the necessary software changes, test the changes and then operationally deploy the new policy.”

SMDU is updated when Fannie Mae policy changes, removing that burden.

“SMDU enables servicers to focus on the process, such as submitting accurate and complete data, and creating a great customer experience,” says Kopins. “We at Fannie Mae do the heavy lifting by ensuring SMDU’s decisions are compliant with Fannie Mae workout evaluation policies. By taking work off the servicers’ plates, we free up resources that they can use to move their business forward in other areas.”

Delivering Real-Time Decisions

Fifty-six loan servicers now rely on SMDU. Some servicers access the decisioning tool directly through their own loss mitigation platform, while others access it via third-party vendors. Using data provided by servicers, SMDU evaluates a homeowner for all of Fannie Mae’s workout options and delivers a real-time eligibility determination to the servicer—and it’s available 24/7.

“Quicken Loans is a technology and client service company that is amazingly good at originating and servicing mortgages,” says Jenny Smolek, director of servicing technology at Quicken Loans. “SMDU integrates with our technology-driven servicing platform very well and allows us to quickly help our clients who may be having difficulty making their payments.”

Tracy Zobel, divisional vice president of default at Quicken Loans, adds: “With every iteration, SMDU gets stronger. The tool makes it even easier to work together with Fannie Mae to help keep at-risk clients in their homes.”

For CitiMortgage, transitioning from manual processes to the seamless automation of SMDU has helped provide clarity to borrowers about their loss mitigation options.

“SMDU benefits the borrower by providing a more timely decision and minimizing the opportunity for errors,” Small says.

Source: Fannie Mae/Housing Industry Forum

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CEO

Alan Jaffa

Alan Jaffa is the Chief Executive Officer for Safeguard Properties, steering the company as the mortgage field services industry leader. He also serves on the board of advisors for SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets.

Alan joined Safeguard in 1995, learning the business from the ground up. He was promoted to Chief Operating Officer in 2002, and was named CEO in May 2010. His hands-on experience has given him unique insights as a leader to innovate, improve and strengthen Safeguard’s processes to assure that the company adheres to the highest standards of quality and customer service.

Under Alan’s leadership, Safeguard has grown significantly with strategies that have included new and expanded services, technology investments that deliver higher quality and greater efficiency to clients, and strategic acquisitions. He takes a team approach to process improvement, involving staff at all levels of the organization to address issues, brainstorm solutions, and identify new and better ways to serve clients.

In 2008, Alan was recognized by Crain’s Cleveland Business in its annual “40-Under-40” profile of young leaders. He also was named a NEO Ernst & Young Entrepreneur Of The Year® Award finalist in 2013.

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Esq., General Counsel and EVP

Linda Erkkila

Linda Erkkila is the General Counsel and Executive Vice President for Safeguard Properties, with oversight of legal, human resources, training, and compliance. Linda’s broad scope of oversight covers regulatory issues that impact Safeguard’s operations, risk mitigation, strategic planning, human resources and training initiatives, compliance, insurance, litigation and claims management, and counsel related to mergers, acquisition and joint ventures.

Linda assures that Safeguard’s strategic initiatives align with its resources, leverage opportunities across the company, and contemplate compliance mandates. She has practiced law for 25 years and her experience, both as outside and in-house counsel, covers a wide range of corporate matters, including regulatory disclosure, corporate governance compliance, risk assessment, compensation and benefits, litigation management, and mergers and acquisitions.

Linda earned her JD at Cleveland-Marshall College of Law. She holds a degree in economics from Miami University and an MBA. Linda was previously named as both a “Woman of Influence” by HousingWire and as a “Leading Lady” by MReport.

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COO

Michael Greenbaum

Michael Greenbaum is the Chief Operating Officer of Safeguard Properties, where he has played a pivotal role since joining the company in July 2010. Initially brought on as Vice President of REO, Mike’s exceptional leadership and strategic vision quickly propelled him to Vice President of Operations in 2013, and ultimately to COO in 2015. Over his 14-year tenure at Safeguard, Mike has been instrumental in driving change and fostering innovation within the Property Preservation sector, consistently delivering excellence and becoming a trusted partner to clients and investors.

A distinguished graduate of the United States Military Academy at West Point, Mike earned a degree in Quantitative Economics. Following his graduation, he served in the U.S. Army’s Ordnance Branch, where he specialized in supply chain management. Before his tenure at Safeguard, Mike honed his expertise by managing global supply chains for 13 years, leveraging his military and civilian experience to lead with precision and efficacy.

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CFO

Joe Iafigliola

Joe Iafigliola is the Chief Financial Officer for Safeguard Properties. Joe is responsible for the Control, Quality Assurance, Business Development, Marketing, Accounting, and Information Security departments. At the core of his responsibilities is the drive to ensure that Safeguard’s focus remains rooted in Customer Service = Resolution. Through his executive leadership role, he actively supports SGPNOW.com, an on-demand service geared towards real estate and property management professionals as well as individual home owners in need of inspection and property preservation services. Joe is also an integral force behind Compliance Connections, a branch of Safeguard Properties that allows code enforcement professionals to report violations at properties that can then be addressed by the Safeguard vendor network. Compliance Connections also researches and shares vacant property ordinance information with Safeguard clients.

Joe has an MBA from The Weatherhead School of Management at Case Western Reserve University, is a Certified Management Accountant (CMA), and holds a bachelor’s degree from The Ohio State University’s Honors Accounting program.

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Business Development

Carrie Tackett

Business Development Safeguard Properties