Improving 'Service' in Mortgage Servicing
By Susan Graham
March 4, 2019
Susan Graham is President & COO of Financial Industry Computer Systems Inc., a mortgage-software company specializing in in-house mortgage-origination, residential mortgage-servicing and commercial mortgage-servicing software for mortgage lenders, banks and credit unions. FICS' software solutions operate on Microsoft Windows platforms using Microsoft .NET Framework and provide customers flexibility to choose an in-house or cloud-hosting solution. The company also provides document management and web-based capabilities in its full suite of products. Reach Graham at email@example.com.
Today's borrowers expect convenient, immediate access to their mortgage information. Meeting these expectations can be challenging for mortgage servicers, who must comply with frequently changing regulatory requirements. Using e-Mortgage technology such as mortgage servicing software and web applications expedites the servicing process, but human interaction is another essential component of the "service" equation.
Here are a few strategies to help mortgage servicers improve customer service:
Use mortgage servicing software to automate servicing processes. Automation is essential for efficient servicing. According to Craig Martin, mortgage practice lead with J.D. Power and Associates, "While the customer experience is an important thing, it's not the most important thing. The most important thing is how to deliver service more efficiently, which in turn will drive customer satisfaction." [Source: https://www.mba.org/mba-newslinks/2017/february/mba-newslink-tuesday-2-21-17/residential/using-customer-feedback-to-improve-servicing-experience]. By automating tasks such as payment processing, escrow administration, investor reporting and many others with leading-edge mortgage servicing software and APIs that allow scheduling of recurring tasks, servicers can deliver these services more efficiently, giving them more time to respond promptly to unique borrower needs.
Leading-edge mortgage servicing software that integrates with the loan origination system and core system allows lenders to sell loans to the government-sponsored enterprises while retaining servicing. In-house servicing generates service fee income and provides cross-selling opportunities while allowing credit unions, banks and mortgage companies to provide better, more personalized customer service. When servicing is outsourced, the lender has no control over the quality of the customer service provided by the third party. In most cases, face-to-face interactions between borrowers and servicers are impossible because there are no brick and mortar locations nearby. Other servicing companies may treat the borrower as just one of many "accounts" instead of providing personalized service.
Use mortgage servicing software and web applications to implement paperless servicing. A paperless office is one important component of going green. Being eco-friendly is important to satisfy younger borrowers, many of whom are concerned about the environment. According to a survey of 1,000 Millennials, 70 percent consider a company's environmental practices when deciding whether to purchase its products. [Source: https://www.prnewswire.com/news-releases/survey-millennials-less-likely-to-recycle-but-more-likely-to-buy-from-companies-that-go-green-300522713.html]. According to one report, Gen Z individuals consider the environment the second most important issue today. [Source: http://www.wespire.com/wp-content/uploads/2018/07/WeSpire_GenZ-2.pdf]. To attract these younger borrowers, now is the time to reduce your institution's environmental impact.
Offer convenient payment options. Mortgage servicers should allow borrowers to pay in several ways: online, by phone or mail and in-person. In many cases borrowers prefer the convenience of making online payments via online portals and web applications.
Promote mobile technology. Web applications--mobile responsive websites or mobile apps--give borrowers online access to their mortgage loan information and allow them to make online payments. Furthermore, borrowers can communicate with servicers via Web applications According to a recent JD Power survey of mortgage servicing customers, mobile customers are more satisfied and more likely to be mortgage company brand promoters than non-mobile-users. Unfortunately, only 20 percent of mortgage customers use mobile technology, so it's important to encourage borrowers to adopt this technology. [Source: https://www.jdpower.com/business/press-releases/2018-primary-mortgage-servicer-satisfaction-study]. Increasing use of mobile technology may increase your borrowers' satisfaction.
Use account alerts to reach customers. Account alerts are an underutilized way to provide exceptional customer service and promote customer satisfaction. Account alerts can also be used to encourage borrowers to adopt and be more active on web applications. According to the JD Power survey, receiving account alerts via text message, secure messages on the servicer's website or email was associated with high customer satisfaction. Unfortunately, 50 percent of survey respondents said their servicer either does not have account alerts or they are unaware the service is available. [Source: https://www.jdpower.com/business/press-releases/2018-primary-mortgage-servicer-satisfaction-study].
Remember the Human Touch. Borrower-facing web applications allow borrowers to manage their loan with limited human interaction, facilitating the mortgage servicing process. While these web applications make payment submission and access to loan information more accessible and convenient, there's also a downside. As the mortgage servicing process becomes more automated and less personalized, borrowers may perceive that they're receiving inferior customer service. Surveys show that, although borrowers want a digital mortgage experience, they also want to interact with real, live mortgage professionals. Even millennials, known to prefer technology, still want personal assistance when paperwork and terminology get complicated. [Source: https://thefinancialbrand.com/62142/millennial-digital-mortgage-lending/].
The next generation of borrowers--Gen Z--may prefer face-to-face communication instead of technology. In one worldwide study, 53 percent of Gen Z respondents indicated a preference for in-person communication over tools like instant messaging or video conferencing. [Source: http://millennialbranding.com/2014/geny-genz-global-workplace-expectations-study]. Borrower-facing web applications should complement mortgage professionals--not replace them.
To satisfy borrowers, mortgage servicers need to:
Reply quickly. Borrowers expect prompt responses to their inquiries. According to a JD Power survey of 7,374 mortgage servicing customers, customer satisfaction drops when borrowers believe their time is being wasted. Among individuals who believe their time is wasted, 66 percent are dissatisfied when they have to wait five minutes or more to speak with a customer service representative. [Source: https://www.jdpower.com/business/press-releases/jd-power-2017-us-primary-mortgage-servicer-satisfaction-study].
Learn from and address complaints. Customer complaints are a valuable source of information that can help improve the borrower experience. Resolving complaints is crucial for preventing other future grievances. For every person who calls to complain, there may be five other dissatisfied customers who don't pick up the phone. According to panelists at the Mortgage Bankers Association Annual Convention & Expo, the biggest complaints involve payment and escrow. Servicers may need to improve their processes, or they may need to educate borrowers to help them better understand and navigate the payment or escrow processes. [Source: https://www.mba.org/mba-newslinks/2017/february/mba-newslink-tuesday-2-21-17/residential/using-customer-feedback-to-improve-servicing-experience].
By using mortgage servicing software and web applications to improve the efficiency of mortgage servicing processes, servicers are taking the first step toward improving the customer experience. Servicers must combine self-service functions with human-touch support. To improve borrower satisfaction, servicers must respond promptly to borrower inquiries, address complaints and educate borrowers to help them successfully navigate self-service payment submission and overall escrow and loan management.
(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA Insights welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at firstname.lastname@example.org; or Michael Tucker, editorial manager, at email@example.com.)