Venture Blog

Although there are certainly challenges facing mortgage servicers in 2024, this year's MBA Servicing Solutions Conference & Expo was more optimistic than we were expecting just a few months ago. The experts and exhibitors shared their outlooks on the market and predictions for what is still to come and how we can all weather the storm together. Here are some of our insights from the conference:

• The low delinquency rates of the pandemic were largely attributable to the increase in self-service options where the customer had time to absorb, process, and respond to the situation they found themselves in. This is something that can be carried forward in the new landscape of loss mitigation and customer service options, especially with new tools like the payment supplement assistance program that buy time until the customer can rebound or rates improve and allow for more levers to pull. 
• If delinquencies do increase through 2024 and into 2025, servicers may find themselves reevaluating the option to outsource servicing to a subservicer. This can be beneficial due to the larger vendor management oversight programs in place, access to greater resources and solutions, more favorable economies of scale, faster speed to market, and reduced system maintenance costs. In the interest of preserving good customer experience, though, servicers need to select a subservicing partner who can meet their requirements for the life of the relationship without sacrificing the needs of the customer. 

• “Junk” fee CFPB rulings do not directly target servicers for now, but the language being used to define unauthorized collection of fees leaves the door open. Servicers can best protect themselves by taking a hard look at their current fees and reevaluating whether they can prove the authority to charge them to customers. 
• Climate change demands attention and needs to be handled as a collective between the agencies and servicers, now rather than later. The unprecedented increases in home insurance rates driven by climate disasters will only continue to put pressure on servicers by increasing delinquency rates. With the likelihood that other states will implement similar requirements as New York, servicers need to prepare now to ready their risk management programs as proof that they have plans in place to mitigate strategic, financial, and operational risks. Uncertainty and data gaps will not justify inaction to prepare for the effects of climate change, and servicers can count on requirements to provide data and reporting around their mitigation efforts. 
• The relationship between compliance and customer service doesn’t have to be combative. In all cases, servicers need to ask themselves if compliance is separate—an afterthought—or if it is embedded in the mission to the customer. Changes to systems, processes, and culture need to keep the customer in mind, ultimately driving at protection and satisfaction; when making policies, servicers can’t be thinking abstractly about a distressed customer but rather need a personal awareness and acknowledgment of the specific customer experience to capture why these changes matter, understand the purpose, and anticipate the effects. 

• Leverage the technology within your systems to prioritize self-service options whenever possible. Use analytics to identify and predict why a customer might be reaching out for support and deliver a self-service option that preempts the need for hands-on assistance. This will likely involve a combination of vendors to produce a solution that accounts for the easily solvable requests and those more complex issues that require a human touch. Having the right data collection and reporting in place to verify the efficacy of each option is essential to keep building and developing the right-sized system for your customers. Data can also be used to create additional value in existing digital assets, such as including home value analytics within the same portal a customer uses to access their account information. 
• Proactive communication is essential, but so is building a relationship of trust with the client that allows them to be receptive. Homeowners who miss payments experience shame and embarrassment, so it can be difficult at times to get them to answer the phone and respond, even though collaboration with their servicer is the best way forward and out of delinquency. Being creative in what communication channels you use to deliver helpful information in an approachable way can make the difference and help a customer figure out the right path for them to stay in their home. Servicing is unique in that the customer had no say in selecting their provider, so servicers need to put in the work to prove to the customer through positive CX why they are deserving of trust. 
• Find new opportunities for customer education. This may require putting in the work to learn and truly know the customer. Onboarding is a great opportunity to introduce the tools and options available to new homeowners, but it does require thoughtful preparation by the servicer to prevent bad experiences. Servicers will likely also have to repeatedly communicate these key points until the customer is ready to receive them, but it is the servicer’s duty to avoid causing distress and effectively communicate options. It can be helpful to brainstorm how to get ahead of distressing situations, like escrow shortages; use the data available to identify when these are likely to occur and offer actionable, valuable options that the customer can use to lessen the impact.