Rising sea levels, the proliferation of extreme weather events and other issues related to flooding trends are top of mind among many U.S. homeowners and mortgage lenders, as it becomes clear that coastal and inland properties alike are vulnerable to flooding. For its part, the Federal Emergency Management Agency (FEMA) updates its floodplain maps to keep stakeholders apprised of flood risks. It’s up to lenders to apply those changes, ascertaining which of the properties in their portfolio have moved into or out of a Special Flood Hazard Area (SFHA) to ensure borrowers are complying with the most current flood insurance requirements.
Fortunately, ServiceLink Flood offers lenders support, from guaranteed flood zone determinations to life of loan services that monitor FEMA flood map revisions throughout the duration of a loan. ServiceLink Flood senior vice president Mike Hanson and vice president of account management Natascha DeVries shared some insights into portfolio tracking solutions, leading-edge flood technologies and more.
Q: What sets ServiceLink apart from other flood services providers in the industry?
Hanson: While some providers will say they “provide flood zone determinations,” ServiceLink actually knows flood. The members of our Flood team are true subject-matter experts (some with 25-30 years of experience), prepared for any issue that may arise for a lender or servicer. We understand the critical nature of flood services, and we’re committed to being our lending partners’ go-to resource for flood information and reporting.
Unlike many other providers, ServiceLink doesn’t outsource any part of the flood determination process. We have exceptional manual researchers on staff, as well as industry-leading technology, so we are equipped to complete any flood-related order in-house. In fact, other flood services providers often outsource certain steps in their processes to ServiceLink, tapping into our end-to-end capabilities to fulfill their customers’ requests.
ServiceLink’s expertise and commitment to providing exceptional flood services enable us to excel in a range of areas:
Breadth of services. ServiceLink offers a full suite of services, including flood zone determinations, life of loan tracking, customized reporting (monthly subscription or ad hoc), customized delivery solutions (private-label, audit and acquisition services), and specialized training and support.
Speed. Over 90 percent of the flood zone determination orders we receive from lenders and insurers are completed via our automated system, which delivers completed reports to these clients within seconds. The remaining 10 percent of orders require manual research that is conducted right on our floor, ensuring customers receive their completed reports more quickly than they might from a provider that outsources/offshores that manual process.
Flood compliance. ServiceLink is uniquely positioned to meet lenders’ flood compliance and tracking needs. We have met every high standard set by lenders and insurance clients alike for accuracy, quality control, disaster recovery and financial viability, reflecting not only the strength of our own stringent internal audit processes but also the steadfast backing of Fidelity National Financial.
Technology. Well known for providing lenders with integrated data, servicing and technology solutions — from origination, title/settlement, default valuation and risk management to tax, flood and collateral protection — ServiceLink leads the industry in automation advances. We are always looking for ways to elevate the speed, depth and quality of our services through technology, which has brought about services and tools including WebCert, automated ordering, CertMap, Flood QuickCheck and the MSP IP1846 plug-in, which Natascha will describe just ahead.
Agility. The collective experience of the ServiceLink Flood team enables us to be nimble when a need arises for an upgrade, improvement or outright change. We bring the relevant experts together to develop a solution and then implement that solution immediately. No need for a half-dozen conference calls across a six-month span to iron out details: We know what needs to be done and, critically, how to get it done quickly.
Q: How is technology revolutionizing the flood industry?
DeVries: Automated flood processes have truly changed the face of flood services. For starters, FEMA, the U.S. Army Corps of Engineers and private engineers leverage technology to enhance how they measure flood risk. They then recreate their findings on a digital or paper map for ServiceLink and other flood services providers to use. Providers can then incorporate that technology into their flood zone determinations and reporting, as well as develop their own advanced tools.
Here are some of the innovations ServiceLink implements to support lenders:
WebCert - ServiceLink Flood’s online ordering and tracking platform revolutionized the way lenders and servicers order flood zone determinations and manage their property portfolios. Completed orders can be corrected, transferred, disputed and recertified online, building convenience and efficiency into what was once a time-consuming process.
Automated ordering - Automated ordering takes efficiency one step further. ServiceLink enables lenders to set up rules so that, once an appraisal is ordered, the flood zone determination is automatically ordered. This cuts out a step for processors and helps streamline the mortgage process.
CertMap - This proprietary ServiceLink tool, which offers a visual representation of a property's proximity to a FEMA flood zone, incorporates high-resolution FEMA images, digital road layers, and full-color satellite and aerial photographs to illustrate why flood insurance is required. CertMap has been proven to reduce the number of disputed determinations.
Flood QuickCheck - This tool gives lenders a yes/no answer to the question Is this property in an SFHA? prior to ordering a full flood zone determination. Having this information up front sets the borrower’s expectations and can improve the lender’s fallout rate.
MSP IP1846 plug-in – Life of loan monitoring is easier with this enhancement, which enables lenders to receive revision updates, identify insurance changes, and track paid-in-full status, refinances and service transfers.
Q: Why should lenders audit their flood processes regularly?
DeVries: Continuous process improvement keeps lenders at the top of their game. That’s why you should regularly reach out to your flood services provider to request an overview of your flood processes and ask what additional automated options are available to help you further streamline your workflows.
For example, if you are utilizing a loan origination system but are using the ServiceLink website to order flood zone determinations, you should inquire as to whether you may be able to order directly through your loan origination system (LOS) to streamline your ordering process. (ServiceLink interfaces with all the major systems.) Likewise, if you’re utilizing a servicing system for life of loan tracking, you should ask about automating that process.
Q: What are some common misconceptions about flood insurance requirements and tracking?
Hanson: On the borrower side, people often believe they don’t need to carry flood insurance because the previous homeowner didn’t have it, their neighbors don’t have it or there hasn’t been a flood in that area in years. In reality, every property has a flood zone designation that determines its flood insurance rate and makes that insurance either voluntary or mandatory.
As mentioned previously, flood zones change — often. Human activity, such as the development of new subdivisions, can alter the flow of water, and emerging scientific and topographic contour data reveal new shifts of nature that can affect flood risks. FEMA does its best to keep up with these flood zone changes, but lenders need to do their part as well, paying attention to floodplain map updates to keep their borrowers protected and compliant.
Similarly, some lenders hold the misconception that they only need to track properties in their portfolio that require flood insurance. Not so — for the same reason stated above. FEMA updates its flood maps regularly. Properties that weren’t a flood liability a month ago may suddenly be in a SFHA, or a property that was in a SFHA may suddenly not be. As a lender, you can’t risk missing a map revision, whether it affects a single property or an entire community.
Q: What should a lender look for in a flood services partner?
DeVries: Flood expertise, leading-edge technology, stability and a strong commitment to customer service. Your flood partner should keep the lines of communication open and understand your needs at any given time. Make sure you have a great relationship with your flood services provider on the life of loan side especially, so you will be alerted quickly when a property’s flood insurance requirements change.
