Bankruptcy operations within banking, servicing, and legal industries have the arduous task of trying to maintain “business as usual” for millions of Americans while also actively seeking ways to mitigate loss from the multi-faceted financial impact of COVID-19.
While new bankruptcy filings are slightly down in the past several weeks, several indicators project that COVID-19 related bankruptcy filings will significantly increase in the second half of 2020.
- Forbearance requests were 2.73% at the start of April but are now 3.74% or $418 billion as of April 13, 2020, according to Inside Mortgage Finance. The Ginnie Mae portion of that, which has a high proportion of loans to low- and moderate-income people, is 5.89% or $130 billion.
- The delinquency rate stood at 1.31% in March but is expected to reach as high as 8.75% by the end of September, according to The Real Deal.
- In the last four weeks alone, an unprecedented 30 million Americans have filed for unemployment benefits and that doesn’t include a significant number who have been unable to file due to the overloaded state unemployment systems. Economists have estimated that the total number of unemployed Americans could hit 47 million, or roughly 32% unemployment rate.
The historical relationship between unemployment and bankruptcy filings is clear. We know that a bankruptcy tsunami is coming, probably in July. Epiq AACER is actively working with servicers to understand their challenges and share how the AACER platform for bankruptcy case search and workflow management can help navigate these choppy waters.
Anticipated Increases in Bankruptcy Filing Volumes
Default servicers are preparing for significant volume increases across both secured and unsecured portfolios. AACER customers have shared that they are already experiencing a significant increase in eligible homeowners applying for loan forbearance plans on an average of 60 days and up to as long as 12 months. Once these forbearance periods end, a swift uptick in new bankruptcy filing volumes will quickly place heavier pressures on servicers to rapidly respond to increased demand.
Banks and other servicing organizations will continue to be under significant financial and operational pressure due to COVID-19. AACER can help these organizations achieve critical cost savings and improve servicing efficiencies within the next 6 to 9 months. Through a highly tailored approached, AACER provides support in an environment where there is pressure to decrease headcount while simultaneously expecting volume increases.
Do More with Less Using AACER Automation
Traditionally, secured and unsecured loan servicers have relied on large teams of processors to retrieve new case filing data and manually update their systems. AACER’s daily monitoring of active cases supports the ability to automate the docket events impacted by COVID-related filings. With AACER, organizations can now focus on the motion-related activity for cases like plan modifications, amended plans, plan payment suspensions, hardship discharges, moratorium on payments, and Chapter 13 payment reductions.
The AACER Platform uses data and digital automation technology to eliminate unnecessary labor as much as possible. AACER Document Creation designs digital workflows that fulfill a specific data requirement in order to drive critical data into third-party servicing systems and other downstream applications. AACER Premium Data services pulls up to 2,200 data fields from over 85 bankruptcy documents and can automate the transfer of data directly into dedicated systems. As a result, data accuracy is significantly improved, costs are reduced, and business processes are accelerating while also eliminating the need to increase headcount.
The bottom line is that the AACER platform can enable the ability to do more with less. AACER helps mitigate the risk and cost of painful disruptions to business due to the pandemic and stay competitive. Epiq AACER can help businesses plan for expected volume growth in new case filings forecasted for the next 3 to 5 years, all with an unmatched price point.
Let’s Discuss your Business and What’s Happening Right Now
We want to hear the challenges your business is facing and discuss bankruptcy trends we see in the market. We want to work with you to identify creative ways your business can improve operational efficiencies using AACER bankruptcy data and prevent unpleasant surprises from your customer portfolio. Please let us know you are interested by filling out the contact us form at the button below.
About Epiq AACER
Epiq AACER is the market leader in U.S. Bankruptcy Court data, workflow automation software and services that lowers risk, reduces costs, and accelerates business processes allowing Customers to do more with less. We provide a scalable SaaS application for lenders, loan servicers, law firms, and investment firms who need to leverage industry-leading credit default data to improve operations.
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