Opportunity by 2030: Revolutionizing Loss Mitigation with a Focus on Veterans

By Matt Slonaker, Founder of M. Allen & Visionary for the NEWCO Concept
Combat Naval Veteran, Gulf War Era

Executive Summary

The mortgage industry faces a mounting crisis: soaring household debt, rising delinquency rates, and escalating climate risks. Against this backdrop, NEVCO (Nextwave Enhanced Veteran-Centric Operations) aims to revolutionize loss mitigation by leveraging cutting-edge technology and a socially impactful mission. Our key objectives are to slash client losses, drive operational efficiency through technology, improve borrower outcomes, and capture a $75 billion outsourcing frontier—all while prioritizing support for veterans, a community I’m deeply connected to as a combat Naval veteran from the Gulf War era.

- Market Opportunity: A $500 million business opportunity by 2030 through predictive AI, self-service portals, climate risk management, job placement services, and a dedicated veteran support initiative.
- Financial Projections: Targeting $100 million in revenue by year three (2027), with $70 million in expenses and $30 million in profit (30% margin), achieving a 10x ROI.
- Implementation Plan: A three-phase approach to setup, scaling, and market leadership, starting with 100 full-time employees (FTEs) in year one and scaling to 500 FTEs by year three.
- Veteran Focus:  A dedicated program to support veterans, leveraging my experience as a Gulf War veteran to address their unique challenges with housing stability and financial security.

The Mortgage Landscape in 2030: A Growing Crisis

By 2030, U.S. household debt is projected to reach $24.2 trillion, up from $18 trillion in 2025, with mortgage debt comprising the lion’s share. Climate change exacerbates the crisis, putting 20 million homes—19% of the total—at risk of climate-related disasters, with annual damages estimated at $200 billion. Delinquency rates are rising, with 1.82 million mortgages currently delinquent (a 3.5% rate), and FHA borrowers facing a staggering 10.46% delinquency rate. The banking sector is also under strain, grappling with $517 billion in unrealized losses due to higher interest rates and elevated deposit costs.

This environment creates significant challenges:

- Elevated Loss Severities: Residential mortgage foreclosure loss severities range from 20-30% of the loan balance, while commercial real estate (CRE) losses can exceed 40-50%.
- Foreclosure Costs: Direct costs range from $5,000 to $15,000 per property, with indirect costs further burdening communities.
- Economic Pressures: The Federal Reserve is expected to maintain a 3.5-4% federal funds rate in 2025, alongside slowing home price growth and unemployment at 4.5-5%, driving 20-25% of delinquencies due to job loss.

The Current Problem: A Perfect Storm in Banking and Mortgages

The banking and mortgage industries are navigating a complex landscape:
- Unrealized Losses: U.S. banks face $517 billion in unrealized losses as higher interest rates devalue fixed-income securities, squeezing net interest income.
- High Foreclosure Costs: With 36,000 monthly foreclosure filings, the financial and social toll of foreclosure is immense.
- Climate Risks: 15 million homes are at risk from climate threats, contributing to $200 billion in yearly damages.
- Delinquency Rates: The 3.5% delinquency rate (1.82 million mortgages) signals a growing need for proactive loss mitigation, particularly for vulnerable populations like veterans.

Business Solution Concept: A Comprehensive, Veteran-Centric Approach

NEVCO’s solution is a holistic loss mitigation practice that integrates advanced technology with a deep commitment to borrower outcomes—especially for veterans. Our key components include:

1. Predictive AI for Default Spotting
Using mortgage, credit, and climate data, our AI models can identify potential defaults 12 months in advance, enabling a 20% loss reduction ($45,000-$50,000 savings per case). For veterans, this early intervention can prevent housing instability, a critical issue for a group disproportionately at risk of homelessness.

2. Self-Service Workout Portal
A user-friendly portal automates 90% of workouts (modifications, forbearance, short sales) via blockchain, reducing per-file costs to $10-$15. Veterans will have a dedicated portal section with tailored resources, ensuring they can navigate the process with ease and dignity.

3. Climate Risk Module 
This module scores risks for 15 million homes, offers disaster relief (e.g., 90-day forbearance), and launches a $10 million insurance sideline. Veterans in climate-vulnerable areas will receive priority assistance, addressing the intersection of climate risk and housing instability.

4. Job Placement Assistance 
We aim to place 25,000 borrowers annually through our BPO network, boosting cure rates by 15-20%. For veterans, we’ll partner with veteran-specific job programs like Hire Heroes USA to provide tailored job placement services, helping them regain financial stability.

5. Deficiency Recovery Services
Using drones and AI-driven resale, we’ll recover $30 million from distressed assets, maximizing recovery rates for clients while ensuring veterans are not disproportionately impacted by aggressive recovery tactics.

6. Veteran Empowerment Program (New Component)
As a Gulf War veteran, I understand the unique challenges veterans face—unemployment, mental health struggles, and housing instability. NEVCO’s Veteran Empowerment Program will:
- Prioritize Veterans in Loss Mitigation: Veterans will receive expedited services, including immediate forbearance options and personalized case management.
- Offer Veteran-Specific Financial Counseling: Partner with organizations like the VA and Operation Homefront to provide financial literacy training, helping veterans manage debt and avoid delinquency.
- Create a Veteran Housing Stability Fund: A $5 million fund to provide emergency rental assistance and mortgage relief for veterans facing sudden financial shocks, ensuring they remain housed.
- Build Veteran-Centric Partnerships: Collaborate with veteran service organizations (VSOs) to connect veterans with housing, employment, and mental health resources, reducing their risk of homelessness.

Why Focus on Veterans?

Veterans are 50% more likely to experience homelessness than the general population, despite comprising only 7% of Americans. As a combat Naval veteran from the Gulf War era, I’ve seen firsthand the challenges of transitioning to civilian life—challenges that often lead to financial instability. The VA estimates that 35,000 veterans were homeless on a given night in 2023, a number that underscores the urgency of targeted interventions. NEVCO’s Veteran Empowerment Program aims to reduce this statistic by addressing the root causes of veteran homelessness: unemployment, mental health barriers, and lack of affordable housing.

By integrating veterans into our broader loss mitigation strategy, we not only fulfill a moral obligation but also enhance our ESG (Environmental, Social, Governance) credentials, appealing to socially conscious investors and partners.

Competitive Positioning & Analysis

Key Competitors: Traditional mortgage servicers, tech providers, BPO companies, and fintech startups offering fragmented loss mitigation solutions.
Competitive Strengths:
- Comprehensive solution integrating predictive AI, self-service portals, climate risk management, job placement, and veteran-focused services.
- Advanced technology and cost efficiency, with a 30% reduction in per-file costs.
- ESG leadership through climate resilience and veteran support initiatives.
- My 20+ years of industry expertise, including reducing losses by 30% during the financial crisis at institutions like Countrywide and Bear Stearns.

Competitive Weaknesses:
- New entrant status and capital intensity for scaling.
- Dependency on external partnerships, unlike established players with internal ecosystems.

Differentiation Opportunities:
- Leadership in climate risk mitigation and veteran-centric innovation.
- Capturing the $75 billion outsourcing market, starting with 5% (9,100 cases) in Year 1 and scaling to 16.5% (300,000 cases) by Year 3.
- Regulatory alignment to outmaneuver competitors.

 Financial Projections

NEVCO is poised for rapid growth:
- Year 1 (2025-2026): $54.6 million in revenue (9,100 cases at $6,000 average, 70% workout rate), $40.9 million in expenses, $13.7 million in profit (25% margin).
- Year 3 (2027): $100 million in revenue (16,667 cases at $6,000 average), $70 million in expenses, $30 million in profit (30% margin).
- By 2030: $500 million opportunity across the BFSI (Banking, Financial Services, and Insurance) sector.

The Veteran Empowerment Program will require an initial $5 million investment for the Housing Stability Fund, which we expect to recoup through increased client savings and ESG-driven partnerships.

Implementation Plan

Our three-phase approach ensures scalable growth:
1. Setup (Year 1): Build infrastructure, hire 100 FTEs, and launch the Veteran Empowerment Program with initial partnerships.
2. Scaling (Year 2): Expand to 300 FTEs, capture 10% of the outsourcing market, and roll out veteran-specific services nationwide.
3. Market Leadership (Year 3): Scale to 500 FTEs, achieve $100 million in revenue, and establish NEVCO as the go-to solution for loss mitigation and veteran support.

Risks and Mitigation Strategies

- Regulatory Hurdles: Engage with bodies like the CFPB to ensure compliance, with a dedicated regulatory affairs team.
- Market Recovery: Diversify our client base and adapt services to evolving conditions.
- Technology Delays: Leverage our BPO partner’s tech infrastructure and implement agile development practices.
- Slow Client Adoption: Offer customized solutions and comprehensive onboarding support.
- Operational Challenges: Utilize our BPO partner’s expertise to ensure efficient delivery.

Regulatory and Compliance Considerations

NEVCO will adhere to:
- CFPB regulations on mortgage servicing and consumer protection.
- Fair Housing Act and Equal Credit Opportunity Act to prevent discrimination.
- GLBA and CCPA for data privacy and security.
- Comprehensive audit trails and reporting for transparency.

Value Proposition

- For BPO/Special Servicer Partners: $100 million in revenue by 2027, scaling to $500 million by 2030.
- Cost Savings for Clients: Over $60 million in savings, with $2,000-$15,000 saved per foreclosure avoided.
- ESG Credentials: Climate resilience, job placement, and veteran support initiatives enhance our social impact.
- For Veterans: A lifeline to housing stability, financial empowerment, and community support.

Next Actions for Potential Partners

1. Evaluate Fit: Assess alignment with your strategic objectives and target markets.
2. Explore Integration: Identify opportunities to integrate NEVCO’s services with your operations.
3. Establish KPIs: Define performance indicators to measure success, including veteran-specific outcomes like reduced homelessness rates.
4. Develop a Go-to-Market Strategy: Position our enhanced loss mitigation and veteran support services for rapid adoption.
5. Finalize Terms: Negotiate a mutually beneficial partnership, including revenue sharing and investment commitments.

About Matt Slonaker

As a combat Naval veteran from the Gulf War era, I bring a personal commitment to supporting veterans alongside my 20+ years of industry experience. As Founder & CEO of M. Allen LLC, I’ve overseen $1 billion in revenue and generated $200 million in new revenue across roles at Countrywide, Bear Stearns/JP Morgan Chase, and Morgan Stanley. My expertise in default and loss mitigation—reducing losses by 30% during the financial crisis—positions NEVCO to deliver exceptional results while making a meaningful impact for veterans.

Contact: [email protected] | (972) 740-4300

Conclusion

NEVCO is more than a business—it’s a mission to transform loss mitigation while uplifting vulnerable communities, especially veterans. By combining predictive AI, self-service technology, climate risk management, and a dedicated Veteran Empowerment Program, we’re poised to capture a $500 million opportunity by 2030 while making a lasting difference for those who’ve served our country. Let’s partner to build a future where no borrower—veteran or civilian—is left behind.