With the assumed imminent recession on everyone’s minds, nearly all of the panelists at the MBA Servicing Solutions Conference & Expo had one response for how to prepare: communicate with borrowers early and often. Back when the announcement was made for the HAF, servicers experienced a huge influx of customer service calls from borrowers who were fearful of potential delinquency, even if they were nowhere near that point yet. Having a plan in place for preemptive communications that assuage borrower concerns and give them actionable, relevant information well in advance will reduce any strains caused by market instability in 2023 for both the borrower and your customer service teams.
Make it Clear What They Can Expect
Gathering data about your borrowers early on will help you have a clearer picture of where pain points may crop up down the line. Qualification questions should drive at determining more than “Can you make your payment?” Ask questions that reveal more indicators than just their current financial status. Present a clear roadmap for what they can expect in their first 45–60 days, when historically borrowers struggle the most. Build a rapport with frequent engagement throughout the life of the loan so you can establish a foundation of trust in their servicer. Delivering information on what resources and assistance options are available upfront goes far to solidify that trust that you are available to help if it is ever needed.
Have a Strategy for Omni-Channel Outreach
Successful outreach all depends on knowing where and how your borrowers like to receive their communications. Having an omni-channel delivery strategy in place or figuring out how to implement one now will allow you to increase your chances of getting timely, helpful communications in the hands of your borrowers when they need them most.
While there is still a major push to drive up e-adoption as alternatives to print communications, having reliable print channels in place as a backup and supplement to digital delivery. LaQuanda Sain, EVP of Servicing at Rocket Mortgage, strongly encouraged using both print and digital approaches in communication strategies because “both are equally important.” Some customers will always prefer print, others digital, and life is unpredictable, so it is vital to have multiple avenues for contacting borrowers with urgent information if they start showing signs of distress.
The market is constantly coming out with new tools and strategies to increase open rates for important communications. Although most borrowers are hesitant to open their mail, they are more likely to open and react to communications that are sent via Certified Mail, are in weighted mail packages, come from the county office, or through a link to their online portal. These methods lend a sense of urgency and importance to the communication; their curiosity will outweigh their frustrations or anxiety about perceived “junk” mail.
Most servicers no longer use a single channel but rather a combination of multimedia channels. While this requires more upfront work for the servicer, technology has evolved to make those outreach efforts easier to set up than ever before. Less traditional methods such as personalized videos have only expanded the options available to create more engaging content that borrowers can more readily access and absorb. The most effective communications are available in multiple forms with borrower-selected preferences.
Consider the Borrower’s Needs
Borrowers are more engaged than ever and there is no single solution that fits everyone. Analyze borrower behavior first, then think outside the box for new options that reach those who show no engagement at all. Test out what types of communications and methods of presenting educational materials best match your borrowers’ preferences. Better yet: ask your borrowers how they prefer to be reached and what kinds of content they want from you. Assumptions made based on demographics or other data points can be misleading and flatten your borrower base into a biased, nonrepresentative monolith. Self-service options allow borrowers to be in control of their own delivery preference settings and language preferences. The borrower knows themself the best, so don’t be afraid to get direct answers from them.
While servicers are exploring all these options for borrower outreach, they should also be making it apparent to the borrower how they can contact their servicer with any questions or concerns. Provide clear instructions for what channels are open to them (email, phone, chat functions on their online portal, etc.) and what languages capabilities you have for these channels. Many of your customers may need interpretation or translation services for calls or any forms they may need to fill out.
Language should be evaluated in all messaging, not just in terms of translation. Messaging should be consumer friendly with plain language explanations. The kinds of information in these communications may seem easy to understand to servicers who live and breathe it every day, but for an average borrower, they may have never heard any of the common industry jargon before. Being overloaded and overwhelmed with legal language, acronyms, and intimidating terms will only make a difficult situation even more stressful.
Evaluating the wording in all of your existing communications may seem like a steep task, but you can partner with non-profit advocates or CCM providers who are experts in making difficult topics easier for borrowers to digest. Experts in customer communications especially can help you redesign and reconfigure your transactional communications to more clearly present the focus of your communication upfront. These communications need just as much thought and strategy into their layout and design as any marketing messaging because it is still a representation of your organizational identity and reputation to existing clients who you want to retain.
Overall, reviewing the current state of your borrower communications for needed improvements should be a significant focus in your preparations for future market instability. These communications are your doorway to borrower engagement, allowing you to reassure them in a stressful period of their lives and giving you a chance to establish a relationship with them that is built on trust and transparency.