Growing Data Breaches Are Placing Servicers At Risk

Mortgage servicers are in dire need of a backup loss mitigation strategy to protect homeowners and their businesses amid the growing number of cyberattacks affecting the financial services industry, says Donna Schmidt, a default servicing expert and founder of WaterfallCalc, a provider of loss mitigation technology for small- and mid-sized mortgage servicers.

In recent weeks, three financial services companies — First American, Fidelity National Financial, and Mr. Cooper — have each disclosed separate incidents involving cybersecurity breaches and ransomware attacks. All three companies have notified government authorities and impacted parties.

The data breaches have exposed gaping vulnerabilities among residential loan servicers when their own system or a third-party vendor’s system is under attack, said Schmidt. “There is no reason why loss mitigation activities cannot continue unobstructed even when a servicer or one of their partners encounters a serious data breach,” said Schmidt. “In fact, it’s a major reason WaterfallCalc has relationships with multiple vendors. If a servicer’s title vendor is hit by a cyberattack, they can easily switch to another vendor and be back in business without skipping a beat.”

Schmidt said recent cyberattacks have prompted a growing number of servicers to complement their primary loss mitigation system with WaterfallCalc, an intuitive loss mitigation application that empowers servicers to quickly evaluate any default scenario in a compliant manner. The application’s user-friendly importing and exporting capabilities easily communicate with a servicer’s existing systems, while its per-loan pricing ensures scalability and cost-effectiveness.

The company also offers WaterfallCalc+, an affordable module that allows borrowers to easily apply for loss mitigation assistance from their phone, PC or tablet and a powerful dashboard for servicers to closely monitor applications as they are received.

“Servicers that establish a backup loss mitigation service provider can more easily and swiftly move their loss mitigation activities to another platform when their primary provider is attacked,” Schmidt added. “At a time when loan delinquencies are starting to creep higher, we are happy to know our clients always have access to loss mitigation waterfalls that enable distressed borrowers to get the assistance they need, when they need it.”