The Data & Analytics division of Black Knight Financial Services has introduced VeraStrat Scores, a loan-level indicator of borrower risk and historical payment pattern. Servicers can use this solution to create efficient borrower contact strategies that assist the servicer in complying with various guidelines by identifying and contacting the highest-risk borrowers early.
"Servicers are required to follow GSE stipulations for contacting delinquent borrowers," said Mark Milner, director of Portfolio Analytics for the Data & Analytics division of Black Knight Financial Services. "VeraStrat Scores help servicers in complying with these requirements by identifying high-risk loans for early borrower contact. To further increase efficiency, each month servicers receive average-payment-day information, which helps them timely contact delinquent borrowers."
A VeraStrat Score is a three-digit number with the first digit indicating the risk segment and the latter two digits representing the historical payment pattern for the loan. The risk segment is assigned using the same approach that investors use—evaluating the probability of default and the potential severity of loss if the loan goes to foreclosure. By using VeraStrat Scores, servicers have the information to prioritize the highest-risk borrowers and efficiently assign collection staff to contact those borrowers who consistently make payments, but missed their normal payment day.
VeraStrat Scores can be delivered directly to the client or accessed seamlessly through MSP, Black Knight's industry-leading mortgage and consumer loan servicing platform. This platform is a single, comprehensive system used by many of the nation's top financial institutions to manage all servicing processes, including loan boarding, payment processing and escrow administration. MSP provides servicers with a fully integrated system to meet mortgage and consumer lending servicing needs for any size portfolio.