Mortgage Servicing Blind Spots You Can’t Afford to Ignore

As interest rates keep rising and economic uncertainty prevails, businesses must focus on what they can control. Mortgage servicers and subservicers must leverage both collateral and borrower information to better communicate with their clients.

Four major blind spots

Disparate customer intelligence
Inadequate augmentation of human effort
Data deficiencies
Poor omnichannel strategy

These oversights can result in customer attrition, regulatory penalties and higher operational costs. Here’s what servicing leaders can do to steer your mortgage servicing away from these blind spots and toward better business outcomes:

Disparate Customer Intelligence: Increase Data Mining and Aggregate for Maximum Value

Leverage and aggregate multiple data sources before analyzing borrower data. Intelligence from loan servicing calls, borrower correspondence, credit reports and property information will allow you to accurately gauge customer behavior and obtain actionable insights. For instance, determining a borrower’s default propensity allows servicers to present that customer with workable options before a single payment is missed.

Mortgage-Servicing Blind Spots You Can’t Afford to Ignore

Generating and deploying borrower behavior insights at scale through a combination of predictive, prescriptive and sentiment analytics can significantly impact your top and bottom lines.

A leading regional bank that faced high attrition rates decided to apply machine learning to both internal borrower data and rich external data. This enabled the bank to predict each borrower’s likelihood to prepay, which directed where to proactively intervene. The result? A 500+ basis-point jump in borrower retention.

Inadequate Augmentation of Human Effort: Adopt AI-powered Backup for Better CX

In a recent study, one-quarter of borrowers who experienced a servicing transfer said the process wasn’t very easy.¹ This negative sentiment is part of the reason servicers have retained just 18 percent of borrowers.² Likewise, it is no surprise that customer satisfaction jumps 183 points when the loan-transfer process is very easy.³

What drives better processes and higher satisfaction? Augmentation of human help with AI assistancebetter communication with the borrower.

Thanks to advances in conversational AI, borrowers who find the loan-transfer process easy are less likely to require interaction with a live agent.⁴ These borrowers have the choice to engage with increasingly sophisticated IVR systems and chatbots. Customers can also rely on these digital alternatives to inquire about straightforward matters like escrow distributions and title requirements. This gives live agents more time to deal with more complex situations and borrowers require a voice on the other end of the line.

The benefits are clear: Borrowers save themselves time and aggravation (no more waiting on hold), while mortgage lenders and servicers drive down operational costs. Chatbots alone are estimated to save banks $7.3 billion globally by 2023. ⁵One lender saved $300,000 within just half a year of implementing its first chatbot, fielding 3.5 times as many questions as it did pre-bot and deflecting nearly 90 percent of calls.

Data deficiencies: Fortify Borrower Information with Intelligent Automation

A significant driver of operational savings is accurate borrower data. A recent report from the Consumer Financial Protection Board, however, raises questions about servicers’ ability to track and report high-quality borrower data.⁶

If data is inaccurate, it’s deficient. Unfortunately errors happen when mortgage servicing depends on manual and redundant data entry across disparate systems. Negative consequences include high costs in manpower, time, customer frustration, security risks and regulatory fines.

Intelligent automation can help solve these problems. By combining robotic process automation (RPA) with ever-advancing AI technologies, enterprises can gather, access and apply borrower data with speed, ease and precision.

Poor Omnichannel Strategy: Meet Your Borrowers Where They Are

Mortgage originators and servicers should be able to communicate seamlessly with borrowers across all channels (website, social media, SMS, email, app, phone, etc.), as well as optimally engage with customers based on factors like time of day or type of loan-servicing issue. Instead, mortgage-servicing communication tends to be a siloed process, without a clear understanding of which channel is best for a given borrower in a given circumstance.

By integrating your channels on one platform, you can obtain a full picture of each borrower. This will help you effectively communicate with borrowers, raising the likelihood of resolving issues before they make a costly pivot, such as defaulting or refinancing.

A single, hyperconnected platform additionally means that an interaction with a customer won’t get forced back to square one whenever a borrower switches channels midstream. This saves borrowers the aggravation of repeatedly conveying the same details via web uploads, chatbot, IVR telephony, live agent, etc.

Hyperconnectivity reduces the transmission of sensitive information, improving data security. An added benefit is compliance with the Fair Debt Collection Act’s limitation on outbound contact. Focusing on omnichannel and customer experience will lead to fewer data breaches and regulatory infractions.