Continuity of Servicing

  • By Jay Frappier
  • Sep 24, 2012

In an industry where critical deadlines, financial pressures and logistical challenges are ever-present features on the professional landscape, mortgage servicing professionals understand that there are often no second chances, and time can literally be money. In the event of a natural disaster or other emergency, the ability to protect critical information, maintain operational integrity and preserve business continuity is not optional -- it is essential.

Today, as mortgage servicing law firms continue to adopt and adapt to rapidly evolving and increasingly sophisticated technologies and processes, that priority is becoming even more urgent. Along with new efficiencies and enhanced capabilities come new complexities: business continuity challenges that demand greater levels of logistical, technical and procedural preparedness. And in the context of a changing regulatory environment, meeting those challenges is not just good business; it is an essential element of responsible mortgage servicing. The ability to protect sensitive information and maintain business continuity in the face of emergency circumstances is a prerequisite to providing accurate and timely processing—a reality reflected in the fact that many of the audits mortgage servicing industry law firms are currently facing require proof of a disaster recovery and/or business continuity plan.

As leading providers of mortgage processing services devote more extensive resources to designing, implementing, and maintaining comprehensive disaster preparedness and business continuity plans, it is critically important that they do so with the guidance of an established set of industry best practices:

Walk the walk
When the drama and uncertainty of a natural disaster or other disruptive event hits, the structure and guidance of a detailed plan becomes invaluable. Comprehensive emergency preparedness plans should include a detailed disaster recovery plan, comprehensive business continuity procedures, robust IT security/functionality protection, and strategic and redundant internal and external communication systems. Even the smallest details matter. Clean-desk policies, shredding bins, and rigorous data security policies can help ensure that sensitive information is protected at all times, and some law firms are choosing to encrypt duplicate files of all information that is backed-up off-site on a regular (daily) basis. Even the most detailed preparations and thoughtfully designed disaster preparedness plans will be put to the test in the event of an emergency, and the more procedural details that can be laid out ahead of time, the better off you will be.

Talk the talk
Clear and consistent communication with employees, clients and professional partners is one of the most overlooked aspects of disaster planning. In the event of a true emergency, on-site leadership and facilities management professionals may be faced with a number of complex and concurrent challenges: keeping employees safe and secure, maintaining business continuity in the face of massive disruptions such as power outages, executing time-sensitive tasks despite significant logistical challenges and safety concerns, and keeping clients and professional partners informed of the latest developments. All of those tasks are dependent upon, or can be made easier by, clear channels of communication. Pre-drafted emails and emergency communications are one helpful way to communicate instructions to employees and clients appraised in real-time as events unfold.

Practice makes perfect
One of the biggest mistakes law firms make is failing to practice emergency procedures and continually refresh employees on the appropriate business continuity measures. Once your plan is in place, it is vital that you conduct dry runs and educational sessions to ensure that all employees understand how to utilize those procedures when a true crisis hits. The best servicers understand that planning is never done: they continue to refine, upgrade and formalize detailed continuity-recovery plans all the time. Emergency Coordinators should be tasked with introducing new staff members to the protocols, policies and procedures that are in place, and leading employees through regular drills and practice sessions.

Build relationships
One effective supplemental disaster preparedness strategy is to establish close working relationships with local and regional civic and emergency officials, as well as representatives from local phone, IT, power, water and sewer circuit vendors. Establishing regular contact and conducting collaborative drills with those individuals can be a great way to optimize your facility’s routine emergency preparedness training. Established relationships with local officials can also pay very real dividends during a crisis, as they may be able to give advance notice of important developments and keep you informed with regard to time-sensitive information.

One size does not fit all
Whether you are a small local operation or a firm with regional offices around the country, it is important to make sure that you adapt emergency plans and processes to not only the regulatory climate of each specific state/jurisdiction, but also the literal meteorological climate: site-specific protocols should designed to maintain your firm’s professional standards while also delivering the level of adaptive flexibility required to account for extreme weather events and other regional challenges.

Establish a leadership structure
Advance preparation and planning can help ensure that every employee knows what to do, but it is also important that everyone understands their role. A strong leadership structure is essential to good crisis management, and everyone from executive leadership and department heads to unit managers and supervisors has an important role to play in an emergency. Consider optimizing a coordinated response by assigning Emergency Response Coordinators and Section Captains who can use things like roll call sheets, rally points, flashlights and other materials to provide guidance in a command and control capacity and ensure that all employees are safe and accounted for.

Equip yourself for success
Think like a Boy Scout. Be prepared. The right equipment can help with that. A permanent on-site generator is a must, ideally one that is powerful enough to ensure that core communications capacity will remain uncompromised. Locations in areas of the country subject to violent storms or frequent power outages might want to purchase Special Alert NOAA weather radios, and make it a practice to monitor those radios when inclement weather threatens. That kind of infrastructure and equipment can help your team respond rapidly the moment the first emergency alert is issued, and place you in a proactive, rather than reactive posture. Given the time-sensitive nature of so many mortgage servicing-related issues, it might make sense to consider investing in small and secure “command and control center” that can remain operational in all but the worst emergencies: a space where mission critical tasks and communications can proceed uninterrupted.

Prepare for the worst
If you prepare for the worst, nothing can surprise or overwhelm you. Murphy’s Law dictates that disaster will always hit at the worst possible moment—so structure your preparedness with that in mind. Do not just plan for inconvenience, plan for massive disruption—think about what would happen if you lost power on the one day a month that you could least afford to do so, and plan accordingly. Some law firms are going the extra mile with worst-case-scenarios in mind, doing things like contracting with emergency services providers that can bring in a trailer-mounted portable generator that can run even a large facility for up to 72 hours without refueling. Think outside the box; ask “what ifs”. What if the generator runs out of fuel in an extended loss of service? Consider setting up multiple refueling contracts, or even pre-arranging access to a location in a nearby city where you could semi-permanently relocate essential employees. Have protocols in place for sourcing work out to local affiliates in an emergency.

These are the kind of extensive preparations that ensure that you can get all systems and personnel back up and running within hours; even in the most dire of emergencies. For law firms and their clients, that kind of confidence is not just a matter of fulfilling professional responsibilities or meeting compliance obligations, it can be a difference-making added value.

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