Consumer Lending

Black Knight introduces VeraStrat Scores to prioritize borrower contact

Black Knight Financial ServicesBlack Knight Financial Services introduced a solution last week that will allow servicers to prioritize delinquent borrower contact to assist them in identifying and contacting the highest risk borrowers first.

VeraStrat Scores is a loan-level indicator of borrower risk and historical payment pattern. It is a three-digit number, where the first number indicates the risk segment and the last two number represent historical payment patterns, much like the approach investors use in evaluating the likelihood of default and potential severity of losses.

“Servicers are required to follow GSE stipulations for contacting delinquent borrowers,” Mark Miner, the director of portfolio analytics for Black Knight’s data and analytics division, said. “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.”

VeraStrat Scores can be delivered straight to the client or through MSP, Black Knight’s mortgage and consumer loan servicing platform—a single system used by many of the nation’s financial institutions. MSP allows institutions to manage all aspects of servicing, including loan boarding, payment processing and escrow administration.

Additionally, the new indicator may benefit servicers affected by Freddie Mac’s discontinuation of its EarlyIndicator software beginning March 29.

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