At this year’s MBA Servicing Solutions Conference & Expo, the talk of the town was how to prepare for a housing market with low originations and rising delinquency rates.
Servicers need to be taking steps now to prepare their own teams to manage the influx of questions the looming recession will bring. Most importantly, servicers need to be proactive in communicating with borrowers to explain how they may be affected and clearly lay out what options they have if delinquency seems likely.
See what else we learned last week in our top takeaways below!
1. Market analysis is forecasting a much less dire outlook than was predicted six months ago, but with a dip in home prices, historically low inventory, and interest rates on the rise, the level of impact on homeowners is still uncertain.
2. The FHA announced that they will be reducing annual mortgage insurance premium requirements by 30 basis points, which will lower barriers to entry for more renters looking to buy their first home.
3. First-time homebuyers will have a hard choice to make between a bad rental market and stretching themselves to make mortgage payments with high interest rates.
4. Although the over 50M 28–38-year-olds today have the lowest rate of homeownership, they are also the most likely demographic to show a major increase in first-time homebuying over the next several years.
5. Delinquency rates are picking up again after reaching a record low and will most adversely affect low-to-moderate income borrowers.
6. Good borrower communication is necessary to keep homeowners informed and empowered to make use of the many loss mitigation options available to them.
7. Homeowners are more empowered to self-fund their emergency response than renters, but they still need assistance in understanding what equity is available to them and when is the appropriate time to leverage it.
8. Servicer solutions for future emergencies need to be flexible and readily deployable with a mix of options available to borrowers depending on potential scenarios.
9. Borrower communications need even more transparency than ever, including visibility on statements and online portals with explanations of how assistance and loss mitigation programs affect the borrower’s account status.
10. Servicers are most vulnerable to compliance oversight when their borrower communications fail to clearly explain what the servicer can do for the homeowner and what options are available to them, resulting in confusion and complaints that spark investigation.
11. There are two points in the life of a loan where personalized video can have the largest impact on a positive customer experience: a welcome video when a borrower is being onboarded to a new servicer and a video explanation of their escrow analysis.
12. The legislative sessions for several states over the next couple of years will cover many bills related to mortgage, with major focus in NY, NJ, and CA on interest rates and home prices, stabilizing rent, making homes more affordable, and addressing constituent concerns in those markets.
