Saturday , 23 January 2021

Uday Devalla: Mortgage Servicers Can Boost Retention, Engagement with Technology

PERSON OF THE WEEK: Mortgage lenders have made great strides in automating the origination process and delivering a smooth and intuitive customer experience for borrowers. Those that do it well are winning more repeat business, as well as attracting new customers through online reviews and word of mouth.

Mortgage servicers have also made great strides in using technology to smooth the customer experience, but the pandemic and subsequent wave of defaults has shown that there is still plenty of room for improvement. What’s more, servicers are having a hard time retaining borrowers, as borrowers take advantage of record low mortgage rates and refinance in droves.

Software firm Sagent is helping servicers deliver a better customer experience – thus helping them weather periods of economic distress and retain more borrowers. The company’s platform not only acts as a servicing system of record, with full default management capabilities, it also powers customer care, engagement, and retention so servicers can transform “customer for life” from tagline to reality.

To learn more about what features and functionality servicers should expect from their platforms, in the context of today’s shifting environment, MortgageOrb recently interviewed Uday Devalla, chief technology officer at Sagent.

Q: What does consumer-first modernization of mortgage servicing mean?

Devalla: Historically, servicing was more about risk management and ROI optimization. Now, it’s about the lifetime customer experience. Online culture makes consumers expect convenient digital experiences where they can run their life from their phone. Mortgage originators got this right over the past eight years.

Now, servicers have started to prioritize a consumer-first, lifetime retention approach, which increases both MSR and lifetime customer values. For instance, servicers armed with a proper servicing system of record that utilizes real-time borrower data can help their customers identify money-saving opportunities early on in the refinance process, before they begin to look elsewhere.

Q: What does a modern mortgage servicing tech stack include and why is each tool important?

Devalla: At its core, a modern mortgage servicing tech stack needs to empower borrowers with the ability to make informed decisions throughout the life of their loan.

It’s important to remember that the borrower experience isn’t limited to any single loan — borrowers will also have questions when they want to refinance, when their warranty expires, and when they want to sell their home. Servicers must be prepared to answer these questions within a singular, intuitive platform. For non-performing loans, servicers need an all-in-one default servicing system that encompasses everything from delinquencies to bankruptcy to foreclosure.

That said, self-service is critical when homeowners are in hardship. The ability to take control can be empowering during times of stress.

Q: Do you believe originations and servicing tech will or should converge?    

Devalla: Absolutely. Convergence is already underway and is being accelerated by the pandemic. Our industry has already modernized servicing.

Care and engagement are especially important when borrowers are strained. If a homeowner is in forbearance or needs more serious help, it is essential that they be able to manage this on their phone and quickly provide the necessary documentation, so the servicer can process their information and get them their options as fast as possible.

This is the same methodology already seen in the origination process. When it comes to portfolio retention, a servicing system of record like ours already has all the data necessary to empower “smart” loan officers, deliver a fruitful home search, and increase engagement throughout the home buying process directly within the existing platform.

If that results in a new loan, then it can be processed right then and there, just as it is during loss mitigation scenarios, instead of kicking it back into the loan origination system. This blossoming engagement-to-close retention methodology in servicing systems will be a key driver of origination and servicing tech convergence as digital transformation in the mortgage industry matures.  

Q: How does your company’s tagline, “If originators are the finders of customers, servicers must be the keepers of those customers,” relate to this? 

Devalla: I think it shows that the origination process is only the beginning. Tech-aided origination is exciting, but the borrower experience doesn’t end there. When a borrower is going through a tough time, say they’ve lost their job or can’t make their loan payment, and they’re afraid of losing their home, that’s when they really need an intuitive experience that helps them get back on the right track.

During difficult times, borrowers need to be able to log in to their portal, communicate their situation, and receive customized feedback about what they can and should do next. This feat wasn’t possible a decade ago — it required a burdensome process over fax and email that only increased the stress for homeowners. 

Now, servicers can grab real-time data points and provide timely options to borrowers, helping to guide them back into the payment process. By using technology to modernize the customer experience, servicers can improve retention and demonstrate customer care through the entire mortgage loan.

Q: What will customer care entail over the next six months to a year – as COVID continues to impact borrowers?

Devalla: Servicers handled a key challenge earlier this year, integrating the foreclosure moratorium into their platforms and facilitating the easy movement of borrowers into forbearance as the CARES Act intended. Now, they’re tasked with prioritizing customer care as borrowers look to move out of forbearance and back into a regular payment schedule.

By providing them with the help they need, servicers can make getting help easier and more accessible for borrowers, so they can feel more secure about their home loan during a difficult time.

The post Uday Devalla: Mortgage Servicers Can Boost Retention, Engagement with Technology appeared first on MortgageOrb.

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