TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/1481918
30 | M R EP O RT SPONSORED CONTENT T he past five or so years has seen a shift in the servicing industry. Drastic changes in technology, coupled with other factors including competition from nonbank lenders, have led to an increased awareness of, and attention to, a homeowner's broader circum- stances. Servicers mainly accustomed to collecting monthly payments and stepping in when loans become delinquent are now recognizing that transcending that traditional role lets them reach homeowners in innovative ways. Retaining customers for life is still a future-state vision, but opportunities exist to move the needle in that direction. A home- owner may select their lender, but the choice of what happens with their mortgage in the future ends at closing. Servicers are empow- ered with the choice, however, of what kind of ongoing ex- perience they want to provide their customers. Expanding the business model to incorporate enhanced strategies and solutions provides opportunities to retain customers and cross-sell while improving the borrower experi- ence. Servicing doesn't need to be siloed. Black Knight's Data & Analytics division reported that only 18% of customers stay with their current servicer when seek- ing a refinance or home equity loan. But since the Harvard Business Review (HBR) estimates that it costs anywhere from five to 25 times more to acquire a new customer than to keep an existing one, it's sound business sense to cultivate loyalty with those homeowners already in your portfolio. A Holistic Approach Y et it is impossible to cite one single ingredient for home- owner satisfaction and retention; it takes a collective, holistic approach. Competitive rates may reign, but there are other success factors, like providing a robust customer experience, offering relevant products, and adopting a company philosophy that makes borrowers feel like they are part of something good. Sustained proactive education resonates with homeowners before they become delinquent, when they still have options, and are not fraught with financial stress. Servicers who offer finan- cial counseling, reward programs, and other creative initiatives to actively engage the homeowner can more quickly offer some of the loss mitigation waterfall options and have the potential to retain homeowners for future loans or refinances. Digital Is Critical T his expanded approach also encompasses an investment in innovative technology. "Even though the duration of the loan may be much shorter than 30 years, new tools and data now available to servicers can help them consider establishing strat- egies to keep customers for the long term," says Bill Maguire, VP, Single-Family Servicing Portfolio Is This the Next Generation of Servicing?