Until recently, mortgage servicing was more about cash-flow math than consumer experience. Finally, customer expectations for both push-button simplicity and smart human advice are changing the game. Consumer-first lifetime retention is now our prevailing theme in servicing, which increases both MSR values and lifetime customer value. But how can servicers convert “customer for life” from theory to practice?
According to MBA, industry retention is only 21% because data and communication gaps erode customer trust at the two most important parts of the relationship: (1) when they first go from originations into servicing, and (2) when they need a new loan.
Here’s how servicers can solve both of these problems to create a lifetime customer engagement loop.
Cut 18 Days Off The Originations-to-Servicing Transition
The transition from originator to servicer is too often a consumer experience hiccup, and must be a primary focus of servicing modernization. Servicers can solve this by automating origination-to-servicing across planning, loading, mapping, converting and testing processes.
For example, Sagent’s LoanBoard software cuts 18 days from the origination-to-servicing onboarding process by automating all LOS-to-servicing system processes like loading, mapping, converting and testing.
This enables real-time compliance when onboarding new servicing at any scale — and does so with today’s most-used LOS. And critically, it accelerates error identification/fixes which eliminates customer service gaps for borrowers.
Customers Spend Months With Originators, Decades With Servicers
Consumer-first servicing modernization isn’t just a catchphrase, it’s a mandate we all must follow in a consumer-led era. This concept hits harder when we view the world from their experience.
From where a consumer sits, they spend months in the origination process — 30-90 days on a refi and up to 360 days in a long lead purchase in a market where more than half of deals have bidding wars.
But they can spend decades in servicing — IF servicers are engaging them properly.
Some in our industry joke: “who thinks of their servicer when they need a new loan?”
I’m all for jokes, but this one isn’t a laughing matter — it’s the greatest opportunity of this era, and one we take very seriously at Sagent.
We’ve spent the past 12 months rebuilding our consumer-first platform CARE — which stands for Customer Attention, Retention and Engagement — to do four things:
1. Customer Retention: When we think of new loans, this comes in a few forms in the current market: the last of the rate/term refis before rates rise, cash-out refis for both home improvement and debt consolidation, and, of course, new purchase loans. More on purchases and cash-out refis in the Engagement section below. For rate/term, a system like CARE combines real-time UPB and pricing data so you can issue offers that close fast.
2. Engagement: New loans come from enabling borrowers to engage with real-time data about their home and their financial profile. For home-buying, triggers telling you an existing customer has listed their home are too late. Now you can and must let your customers begin their home search on your platform, you see that activity and can therefore be their primary advisor — which includes a pre-approval. Likewise, if they’re engaging with real-time data on their own home, you can prompt them for home-improvement loan offers in real-time based on their actions. And on cash-out debt consolidation, if they can view their credit scores and non-housing debt right in your interface (a white-label of Sagent CARE), then you can give them offers that matter to them right at the moment of intent.
3. Hardship: Thankfully, smart pandemic policy response is leading to a soft landing for homeowner hardships overall, but every loan portfolio will have hardships along the way. And nothing builds customer loyalty like giving your borrowers immediate, easy self-serve tools to get hardship help. Sagent makes it simple for borrowers to apply for help and resolve hardships from their phones, as it was for them to get their loan in the first place.
4. Seamless Customer Service: And going back to my opening paragraph above: customer expectations for both push-button simplicity and smart human advice are changing the game. Self-serve isn’t enough. You also must have your customer service teams on the same platforms, viewing the same UI/UX as your borrowers, whether they’ve got questions about selling their home to buy a new one, or they just lost their job and need human help immediately. Tech that powers unified servicer and consumer collaboration are what brings the consumer-first modernization to reality.
The Endgame: A Continuous Servicing-To-Originations Loop
The great news is that this reality is finally coming into focus for servicers as we enter 2022.
The endgame is a continuous loop where tech-powered customer attention, retention and engagement in servicing lead to new originations, which then lead to — and preserve — lifetime servicing.
This is how we optimize positive cash-flow math with lifetime customer experience in servicing. To learn how Sagent is doing this for our customers, visit Sagent.com or email me directly at uday.devalla@sagentlending.com.
