Training personnel to deal with those losing homes to foreclosure is not only the right thing to do, it's also likely to improve your bottom-line.
Lenders seeking to reduce their costs of foreclosures should consider the old axiom: You catch more flies with honey than you do with vinegar.
As it relates to a lender's loss mitigation and collection personnel, it means that training them to better understand the psychology of foreclosures, to feel more empathy for those losing homes, to identify with a parent with children in financial distress... and more... banks can expect to be repaid hundreds of times over.
People in foreclosure, and those at risk of going into foreclosure, are often scared, lonely, tired, insecure, and sometimes confused. They're not thinking clearly and they're on the edge. A little kindness at a time like that can go a long, long way. A little rudeness, on the other hand, can push someone into a rage. It's not easy to work with distressed homeowners day after day. And even though some might feel like they're not letting their true feelings come through, at times like these, that can be difficult, if not impossible to do.
Here are some ideas bank management might consider changing about the way their personnel behave toward distressed borrowers.
* 1. Explain what distressed borrowers are thinking and how they are feeling. Give them the details. Ask them to imagine what they would do and how they would feel. By bringing them into this kind of discussion, you'll force people to realize that others worry about the same things they do, and once they share their thoughts and feelings with co-workers, they'll stop seeing those in trouble as getting what they deserve.
* 2. Share the facts about the costs that neighborhoods, communities and society as a whole pay as a result of foreclosures. You can use some of the statistics presented earlier. People sometimes fail to see how something that hasn't happened to them personally, affects everyone personally.
* 3. Play the Foreclosure Game - Ask people to calculate what would have to happen to place them at risk of losing their homes to foreclosure. You can even create cards that describe various catastrophes that happen to people in life. For example: You are injured in a car accident that leaves you unable to work for three months; the driver that hit you is uninsured. A month later your spouse is laid off from work, and you have a tuition payment of $18,000 due in 90 days. You can't take out an equity line on your home, nor can you borrow from the bank. And your retirement plan account has been reduced by 40% as a result of the latest market correction.
* 4. Consider asking a borrower who already lost his or her home to foreclosure to come in as a guest speaker. Often times, it's harder to harbor ill feelings about someone you've met face-to-face, and the personnel stories from people who have come through it, can have a lot of impact.
* 5. Conduct role-playing exercises in which one person is the borrower and the other the bank manager. The borrower starts by explaining to the bank manager how they got in so much trouble. The rest of the group votes on the level of empathy and compassion the bank manager has communicated during the call.
* 6. Review your personnel training manuals to ensure that they are not placing counterproductive restrictions or using guidelines that make it more difficult for your people to spend the time needed. For example, do your people try to spend less than a certain amount of time per call? If the answer is yes, you may want to consider either lifting that requirement, or lengthening it.
* 7. Changing culture has to start at the top. Have all of your organization's top managers speak at your training sessions. When your loss mitigation personnel hear the CEO talk about foreclosure victims with sympathy and caring... they'll stop and listen.
* 8. Clip and distribute articles that highlight the heartbreaking stories of people losing homes due to no fault of their own. Many people today, still have the impression that those that got in trouble did it to themselves. Show data on the number of prime loans that are now defaulting. Examples that destroy that perception help to open minds.
* 9. Encourage your people to share stories with each other at regular meetings. This is not something you want to do just once and leave it alone after that. This is an ongoing program intended to make sure that the people you have on the phone aren't causing someone to punch holes in their walls when they hang up from the call.
* 10. Consider increasing the number of breaks your people take during the day. And consider providing some items "just for fun" in areas where breaks are taken. An Etch-a-Sketch, Slinky, or even Play-Doh, can all bring back happy memories and help to relieve stress, or on the more serious side, provide an exercise ball, weights, or even a treadmill or two... exercise kills stress.
Human beings have a need to see bad things that happen to someone as not being their problem. And because of how this crisis has unfolded, many people have come to believe that everyone losing a home is an "irresponsible sub-prime borrower". This belief can color how someone interacts with a distressed homeowner.
Those losing homes today are going through very stressful times. Many have lost jobs, and are struggling to make ends meet. Many have young children. And many have lost all hope. It's easy for someone under that kind of stress to become angry, and an angry homeowner losing a home to foreclosure is likely to damage the home before leaving.
Banks and servicers need to take a look at how loss mitigation personnel are trained to deal with homeowners at risk of foreclosure, because as the months and even years go by, the situation will only get worse. By helping personnel to better understand what's happening and how these customers are feeling, they can spend a little extra time, or offer a kind word that can make the difference between a home left in decent condition, and one in need of thousands of dollars in repairs.
Most importantly, communicate with the people that interact with troubled borrowers on the phone every day. It's a hard job and constant exposure to tragic situations and frustrated or angry customers can wear one down, even if the person doesn't realize it.
Today, perhaps more than ever before... It Pays to Be Nice.
