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Outsourcing critical business processes to Managed Services Providers (MSPs) is not just about delegation. It’s about partnership, trust, and ensuring utmost quality. Especially when it comes to sectors as regulated as the mortgage industry, the stakes are high. AIS stands out in its commitment to compliance and quality. But how does AIS compare, and what should you look out for in a quality compliance partner? 

Six Core Attributes of AIS's Partnership in the Mortgage Sector

• Growth-Centric Expertise: Every business aims to evolve and prosper, and the right collaboration can make this aspiration a reality. At AIS, our strength isn't just in quality and compliance, but in empowering businesses towards their goals. With our two-decade legacy, we don't just monitor standards; we help you navigate and anticipate market transitions.
• Global Insights with Local Precision: In a globalized world, nuances matter. While AIS bridges global best practices, our primary focus is ensuring these resonate locally. We're not just about expansive reach; we're about working alongside lenders and servicers to align with their specific needs and perspectives.
• Value-Centric Approach: Quality and affordability are paramount in today's landscape. AIS's commitment is to be a partner that offers unmatched service quality, ensuring you derive maximum value without straining your resources.
• A Legacy of Shared Successes: Reputation is built over time, through consistent delivery and shared victories. Our history isn't about our solo journey, but the stories of our partners' transformations and achievements. When you succeed, so do we.
• Tailored Solutions for Every Need: AIS recognizes that no two needs are identical. Our diverse services, from QC plans to intelligent sampling, are custom-tailored. We collaborate to understand your unique requirements and map our offerings accordingly.
• Empowering through Innovation: Technological advancements are reshaping industries. At AIS, we're not just about adopting these changes but about ensuring our partners harness them effectively. We collaborate to bring the latest digital solutions to your fingertips, ensuring you stay ahead in the competitive landscape.

A Commitment to Compliance and Quality

While it's paramount to align with an MSP that checks these foundational boxes, AIS believes in going the extra mile. From bankruptcy data monitoring to loan servicing to due diligence compliance audits, our diverse services are designed to cater to the nuanced needs of the mortgage industry.

Moreover, with ever-evolving regulations, mortgage firms need agile solutions that can be swiftly and safely implemented. Our solutions, backed by two decades of experience, offer this flexibility without the daunting administrative overhead. While many promise compliance and quality, AIS delivers it. By partnering with us, organizations are not just outsourcing tasks; they are aligning with a partner that's deeply invested in their success, and one that continues to set industry standards in quality and compliance.

We work tirelessly to fulfill the quality requirements defined by the clients we support. Our software and servicing procedures include multiple QC points to detect and resolve any issues that may occur. We include a calibration process that promotes equitable process knowledge amongst all departments, leading to fewer breaks and minimized variance. 

Our clients have access to customized, analytical tools for gathering additional insight into their customers and the work that’s being done on their portfolios. We leverage visual management systems to effectively track and communicate client-defined KPIs and CTQs on a daily basis. 

So, as regulations tighten their grip and market challenges persist, remember that with AIS by your side, you’re more than ready to navigate the complexities of the mortgage world with confidence. 

 

As we have reported on bankruptcy filings for the past year, one of the most striking changes we have seen over the past year is a significant increase of about 17 percent in total filings so far this year.      

As we dive deeper into those numbers, we see an even bigger increase in small business filings made under subchapter V, which fast-tracks the process. This year, small business subchapter Vs have risen by an incredible 44 percent.        

Over the next several months, Congress will have to decide whether to revise current SBRA eligibility requirements. For small business and creditor advocates alike, this Congressional action will bear watching.   

Background on Subchapter V      

At the end of 2020, Congress passed a bi-partisan bill– you heard me right, I said bi-partisan, a word seldom heard here in Washington, D.C. It was called the Small Business Reorganization Act or SBRA. The purpose was to make it easier for small businesses to navigate the bankruptcy reorganization process successfully. The theory was that if debtors could re-negotiate their debts, the business could survive, jobs could be saved, and creditors would be more likely to be paid back.      

The key features of the bill were:     

• expedited procedures so cases may be completed in several months rather than over years;     
• different repayment rules so owners of small businesses keep their stake in the company, as long as they devote a large share of their profits to repaying creditors; and     
• a trustee for every case to help ensure the debtor reports accurately on its financial progress and negotiates a consensual repayment plan without the usual litigation.      

Although subchapter V was initially designed for small businesses with debts no greater than $2.7 million, the debt limit was raised to $7.5 million as part of emergency COVID relief legislation. About one-third of the approximately 1500 subchapter V cases filed last year fell within the original debt limit and the temporary $7.5 million limit.

The Success of SBRA  

Although the track record of SBRA only covers about two years, all measures point to successful results. According to official data from the Justice Department’s U. S. Trustee Program: 

• About three out of every four small businesses that seek bankruptcy reorganization do so under subchapter V.
• The percentage of subchapter V debtors who obtain court confirmation of repayment plans is about double the percentage of other small businesses. And subchapter V cases move through the confirmation process about 40 percent faster.     
• Not only that but nearly seven out of ten SBRA plans are consensual, meaning that creditors agreed without dissent.   

Sunset of Higher Debt Limits and Other Changes      

Between now and next June 21st, Congress must vote to extend the debt limit of $7.5 million or else it will revert to its original level. That will affect more than 500 small business debtors each year.      

If Congress acts, there are several other tweaks to the law that many experts recommend as well, such as:      

• Tightening the rules governing affiliates that file. The well-known cases of InfoWars podcaster Alex Jones and his media company have highlighted issues concerning strategically filing cases to evade the debt limits.        
• There are other proposals under study as well, involving technical and administrative changes.        

The American Bankruptcy Institute has a Task Force reviewing all these issues.        

With the expiration of COVID relief to small businesses, many more individuals and companies may seek bankruptcy protection in the future. That will spotlight subchapter V and whether it should be limited or improved between now and next summer.        

We will keep a close watch on this. 

Commentary provided by Clifford J. White, Managing Director – Bankruptcy Compliance for AIS.

In an era where staying ahead of the competition is paramount, CEOs and COOs in the financial sector constantly scout for methodologies that catalyze growth and streamline operations. With the pressure to realize tangible results swiftly, a structured approach to business transformation becomes imperative. Derived from a recent AIS executive brief that sheds light on strategic business transformations, this blog will walk you through a 12-week transformational journey tailored for financial service providers, aimed at reducing operational expenses and propelling revenue growth. 

The Bankruptcy Situation: Navigating a 90-Day Turnaround

Economic downturns, global shifts, and unprecedented events can leave businesses in precarious financial situations. For financial service providers, these moments of turbulence can be both challenging and opportunistic. Leveraging the 90-day transformative agenda offers a focused roadmap to pivot, streamline, and capitalize, even when facing bankruptcy. 

Your 12-Week Roadmap to Financial Revival and Growth

• WEEK 1-2: Dive deep into the company's core operations, laying out inefficiencies and untapped growth avenues. The mission? Craft a tactical plan to slash operating expenses and bolster revenue by a fifth.
• WEEK 3-4: It's action time. Implement astute cost-saving measures. This includes honing business processes, reworking vendor agreements, and possibly trimming the workforce. Yet, remember, any move should not dent the customer experience or inhibit revenue flow.
• WEEK 5-6: Spotlight on marketing. Roll out compelling campaigns designed to entice new clientele, utilizing precise customer data for messages that hit the mark. Keep a keen eye on indicators like CPA and conversion ratios.
• WEEK 7-8: Shift gears to customer retention. This phase is about ensuring clients stick around and spend more. Introduce loyalty schemes, uplift your customer service game, and continuously track pivotal metrics like churn and LTV.
• WEEK 9-10: Now, tap into the goldmine of existing customers. Explore avenues for cross-selling and upselling. Harness customer insights to pitch products and services they'd find irresistible. Monitor stats like ARPU and LTV to gauge success.
• WEEK 11-12: The home stretch. Time to pull out the report card. Assess your progress and goals of 20% expense reduction and revenue augmentation. Reflect on the achievements, recalibrate strategies if needed, and chalk out the next steps.

Navigating a transformative journey, especially in uncertain times, is no small feat. Yet, with a strategic 90-day plan, financial service providers can not only weather the storm but come out stronger, more efficient, and more profitable. Remember, it's not just about transformation; it's about doing it right and doing it efficiently.

 

Understanding and managing bankruptcy remains a pivotal task, especially for consumer banking and mortgage servicing sectors confronted with intricate regulatory frameworks. Drawing from the lessons of past financial downturns, the current digital and omnichannel environment offers a unique blend of challenges and growth prospects. For institutions aiming for continued success, it's essential to adeptly navigate bankruptcy management processes while staying informed of emerging trends and potential risks. 

The core of bankruptcy management lies not just in responding to immediate crises but in proactively shaping strategies that ensure long-term resilience. Staying compliant, keeping customers satisfied, and limiting losses are not just checkboxes to tick but essential lifelines that determine the success and stability of banking institutions. 

Best Practices & Strategies That Make a Difference

From ensuring strict adherence to ever-changing regulations to leveraging technology for innovation, managing bankruptcy departments effectively entails a multifaceted approach. Here’s a breakdown of the most effective strategies for managing bankruptcy departments:

• Compliance & Regulatory Adherence: It’s not just about meeting legal requirements. It's about understanding and embracing the spirit of these regulations to protect both institutions and consumers.
• Quality Control & Auditing: Regular audits and stringent quality checks ensure that processes remain consistent, accurate, and in line with the highest standards.
• Centralized Operations: Streamlining operations provides uniformity, reducing discrepancies and increasing efficiency across departments.
• Efficient Case Management System: A well-organized system facilitates quicker resolutions, aiding both institutions and their customers.
• Risk Management: Anticipating and addressing potential challenges ensures the stability and resilience of an institution.
• Effective Communication: Transparent and clear communication channels, both internally and externally, are vital for timely resolution and customer satisfaction.
• Proactive Loss Mitigation: Being a step ahead and addressing potential issues before they escalate is a hallmark of a proactive institution.
• Data Analytics & Reporting: In the digital age, leveraging data-driven insights aids informed decision-making, giving institutions an edge.
• Employee Training & Development: Empowering staff with continuous learning ensures they remain adept at handling evolving challenges.
• Third-party Vendor Management: Collaborative partnerships with vendors ensure both quality service and compliance with necessary protocols.
• Technological Innovation: Embracing modern technological tools and solutions enhances efficiency and ensures institutions remain competitive.
• Customer-centric Approach: In the end, it's all about the customers. Ensuring their satisfaction, trust, and loyalty should be at the heart of all practices.

Incorporating these best practices ensures that consumer banks and mortgage servicers not only manage but excel in their bankruptcy management efforts. However, it's essential to remember that while numbers provide an objective assessment, the true measure of success lies in an institution's ability to evolve, adapt, and serve its customers with integrity. 

In essence, navigating the intricate world of bankruptcy management requires a balance of strategy, foresight, and an unwavering commitment to best practices. As we reflect on lessons from the past and gear up for challenges of the future, it's clear that with the right approach, banks and mortgage servicers can confidently tread the bankruptcy path, turning potential pitfalls into opportunities for growth and excellence. 

Note: For those interested in delving deeper into optimizing default operation strategy or seeking real-world examples of transformations in the face of financial crises, feel free to reach out. Together, we can chart a course for success.