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Client Bulletin: October 24, 2022

A Look at Our Progress Building the Muscle of Risk Assessment

At Cenlar, we are committed to the continuous improvement of our organization.

It starts with a proactive mindset and the belief that identifying, managing and mitigating risk is everyone’s job at Cenlar. That attitude has been embraced by the entirety of the business with our efforts to build the muscle of risk self-assessment in all our employees.

Risk Management and the business units have partnered to increase the use of automation, reducing manual tasks and thereby reducing risk. We’re also adding and identifying expertise across the organization to enhance processes where automation isn’t possible.

As an organization, we’re also having agile conversations with regard to risk, assuring that everyone has a seat at the table, sharing responsibility and identifying solutions that dig to the root issue.

“We’re not managing by committee, but we are leveraging the strength of the whole organization to get stuff done,” Cenlar’s Chief Information Officer Steve Taylor said.

“By using the agile model, we can address issues in real-time. We approach every item by thinking, ‘What is the solution? How we can scale it?’”

This foundation is built upon work we’ve done over the last few years to establish a holistic approach to risk, led by the stewards of our risk framework — Chief Control Officer Lynn Tarantino, Chief Risk Officer Sara Avery, Chief Audit Executive Wayne Tull and our legal department.

To be sure, these stewards continue to be busy. In recent months, our risk teams have:

  • Implemented enhancements to the Issues Management Program, including additional participation by all three lines of defense when developing remediation plans.
  • Redoubled our commitment to first line management testing of all High/Very High risk controls.
  • Implemented enhancements to the Risk and Control Self-Assessment Program (RCSA), including a new risk taxonomy and stronger mapping to the Risk Appetite categories.
    • Started working to re-baseline existing Risk and Control Matrices, setting up the foundation of a stronger RCSA.
    • Implemented an enhanced Operational Change Management Program to better manage introduction of changes to people, process and technology.

     

    But much of that work remains behind the scenes. To truly see proof of our evolution, you have to look within the business.

    At Cenlar, everything we do is with an eye toward providing you and your homeowners the very best service, each and every day. Our teams exemplify our philosophy of continual improvement, minding our risk profile to ensure our clients and their homeowners have the best experience. Providing the service you deserve means we’re always evaluating how risk enters the equation. This includes thoughtfully innovating for the future while never forgetting the important details of our day-in, day-out business.

    A look at how we’re doing:

    Call Center Performance

    • Our Default Call Center (DCC) has beaten abandonment rate and average speed of answer benchmarks for 19 consecutive months.
    • Our Customer Interaction (CI) center has exceeded service levels for 15 consecutive months.
    • We’re surpassing our QA compliance score goal year-to-date (goal is 95% or greater; we’ve been averaging 98% in CI and 99.5% in DCC).
    • Both CI and DCC hit all-time highs in QA control score in August (95.4% in CI and 95.5% in DCC). Year-to-date, we’re averaging better than our goal of 90% — 92% in CI and 94% in DCC.

    Homeowner Satisfaction

    • Our customer satisfaction survey scores hit all-time highs through September 2022.
    • In August 2022, 84.9% of homeowners found our agents professional and friendly, while 83.1% were satisfied with their representative’s job knowledge — both numbers are 30 percentage points higher than when the survey launched in September 2021.
    • 76.1% of homeowners are getting resolution of their issue at the first call.
    • Our goal is to be above 90% satisfaction on agent professionalism, friendliness and job knowledge and above 80% on issue resolution by the first quarter of 2023.

    Early- and Late-Stage Default

    • In late-stage default, we beat our target for timely completion of FHA loss analysis in August 2022.
    • We’re hitting 3-year highs on two key metrics in early-stage default. In August 2022, 96% of workout documents were sent to homeowner in 15 days; our target is 90%. Also, we have 30 days to make system changes once we get homeowner documents back; we’ve been above our 90% target for each of the last 3 months.
    Within IT, that means being proactive by finding and treating the root cause of issues, not just the symptoms.

    Our IT teams have also implemented enhancements to the Vulnerability and Patch Management (VPM) program that has allowed us to effectively clear any backlog while maintaining compliance with the program requirements, while also bolstering our IT Asset Management Program so that we’re on track to resolve significant open end of life support by year-end.

    The primary focus of our IT team currently is to roll out automation of manual tasks across our business areas. That includes deploying more synthetic agents, who can simulate processes and find a problem before it affects our clients or their homeowners.

    “Our priorities are to get the risk out as quickly as possible and to automate,” Taylor said.

    Automation can’t replace expertise, though, which is why we also continue to hire and build talent throughout the organization. We’ve brought on new and experienced leadership within default, including a VP of Foreclosure, VP of Claims/Loss Analysis, VP of Early Stage Default, VP of Late Stage Default and a new director over a newly centralized QC team. We’re also recruiting compliance specialists to strengthen our L1 default teams. It’s part of a strategy of looking across Cenlar to ensure we’re putting the right people in the right seats, so our employees thrive as our organization does.

    We’re also looking at all of our interactions with homeowners and clients, and proactively using that data across the organization, through a program called Touchpoint Analysis (TPA). Started in 2020 with an initial focus on complaints, TPA now helps us identify and address enhancement opportunities in business processes and the homeowner experience. This includes deeper dives into the data in order to reduce risk and prevent borrower harm. And we’re continuing to look at ways to make TPA even more robust.

    This allows us to work across the organization to share ownership of issues, and to allow for more agile decision-making. Part of this effort is a new committee headed by Chief Risk Officer Sara Avery — scheduled to start meeting this month — that will ensure constant alignment across the organization with regard to risk. The idea is, the committee — dedicated to risk and with representatives from across the business — will provide the proper forum to discuss potential issues, to track existing issues and to be proactive with follow-up.

    But we have tasked every employee at Cenlar to take ownership of the risk management process. Company-wide, we’re emphasizing how to self-identify potential issues and institutionalize finding, fixing and preventing them. Teams, like IT and our Contact Centers, have regular meetings with employees that put risk at the forefront and make a risk mindset part of everyone’s daily work.

    “We’ve seen a shift in the behavior of the team,” said Lou Sigillo, Senior Vice President of Borrower Operations.

    “My team are saying the same things and thinking the same way as the Issues Management team now. There’s much more accountability, and we’re much more proactive.”

    To aid our employees in continuing to build this habit, we’re conducting skills assessments and training across the organization. We’ve already completed skills assessments and an aggressive training and certification process in IT, Default QA and Risk QA. Every Contact Center representative has risk-related objectives included in their performance agreement, and the support to meet those goals thanks to agent training and agent desktop tools.

    We’ve also established a formal process to leverage the time our Contact Center representatives are not on phones helping homeowners. This time is devoted to coaching and developing our employees in the Contact Centers regularly throughout the month, including team meetings to cover common topics of concern, one-on-one QA coaching sessions, and periodic refresher training on common call drivers like escrow, taxes and insurance and year-end.

    Our QA team is fully independent, and monitors 10 calls per agent every month, with additional monitoring for any call involving a homeowner that needs special assistance with their loan. Additionally, if QA monitoring identifies an issue with a representative’s call, that representative receives targeted coaching within seven days of the call being flagged, in order to prevent the issue from occurring again.

    In Q3 2022, we established Roundtables, where managers within our Borrower Operations organization check in with Contact Center employees once a quarter, and have an open dialogue about opportunities for enhancing the homeowner experience. This feedback from the frontlines will be passed up the organizational chain so that it can be used to analyze how we might evolve our processes and procedures to provide a better homeowner experience.

    As our Roundtables continue to identify processes and procedures that can be enhanced, it will allow us to achieve even better homeowner satisfaction scores. It’s the next step in our evolution — leveraging the strength of the whole organization in order to power our transformation.

    Forward looking

    We firmly believe this work will make Cenlar stronger than ever. As we continue to improve, we expect to see further tangible results in the service we provide to you and your homeowners.

    We do this because we want to be the nation’s top servicer — not merely because we have the most volume but because we’re the best, period. We’ll only have achieved this when you see Cenlar as your go-to, your trusted partner.

    Thank you for working with us, hand-in-hand, as we evolve toward this goal.
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