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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 46 June 2023 S P O N S O R E D C O N T E N T R emember April 2020? I do. I was one month into my Sagent CEO role. It was all pandemic panic and parabolic unemployment charts as lockdowns kept people at home. Unemployment spiked from 3.5% to 14.8%, and a crucial bright spot was the CARES Act—which ultimately helped 7.8 million people keep their homes. Sagent's mortgage modernization reset began in that down cycle, just as real-time policymaking concur- rently reset how innovation must work across all cycles. Make no mistake: that real-time chaos wasn't a one-off, it's the state of play—whether it's today's inflation fight and bank crisis or tomorrow's recession. So, let's look at what it means to power $13 trillion in outstanding U.S. mortgage balances in this truly real-time era. Real-Time Compliance Is the Root of Innovation Y ou'll note I said "real-time policymak- ing" above. Some call it pandemic policymaking. Others call it emergency policymaking. But we should all call it real-time policy- making. That's what's required for regulators to maintain stability in today's markets, and if the pandemic only partially convinced you, this year's bank panic should finish the job. Bank runs used to take weeks or months, now we know they take hours. During the 2020 pandemic and 2023 bank crisis, real-time policymaking brought order to chaos and prevented systemic breakdowns. This year, policymaking didn't (and shouldn't) stop people from moving their money. But it did prevent far worse outcomes as the United States racked up three of the four biggest bank failures ever. State regulators, the Fed, Treasury, and especially the FDIC engaged real-time to find help for, then ultimately seize and quickly sell First Republic, Silicon Valley Bank, and Signature Bank to stem contagion. In 2020, U.S. public safety lockdowns be- gan March 15, and the CARES Act was signed into law by March 27. Why does this kind of real-time policy- making set the tone for how innovation must work? Because servicer compliance—as well as performing for customers and investors— is only as good as software that can handle real-time policy changes. When CARES forbearances and other hardship relief became effective, Sagent customers were ready on day one because they weren't coding for each compliance nuance CARES homeowner hardship relief enabled— they were configuring for it in real time. This meant being able to offer forbear- ances, payment deferrals/partial claims, and extended-term modifications to struggling homeowners immediately—and not missing a beat on current and long-tail compliance. Using Real-Time Policymaking to Speed Innovation C ARES policy being made in real-time wasn't a one-off, it's now the state of play. This is a good thing because faster policy drives faster innovation. Effective July 2023, FHFA has doubled down on CARES payment deferrals. Are Sagent servicing customers ready? Of course. But they also ask questions like, "Yeah, but how do I handle customer and investor needs—and compliance—if FHFA's newly expanded deferral policy is re- versed again suddenly after November 2024?" This is what I meant by "long-tail compli- ance" above. It's not about one change like FHFA just HOW REAL-TIME POLICYMAKING DRIVES MORTGAGE INNOVATION B y DA N S O G O R K A D A N S O G O R K A is the President and CEO of Sagent, America's second-largest loan servicing software company, serving top bank and nonbank servicers. Sogorka has led digital transformation in housing for two decades. Before joining Sagent, Sogorka served as CEO of digital mortgage point-of-sale provider Cloudvirga, President of EXOS Technologies, EVP of ServiceLink, a $1 billion revenue subsidiary of Fidelity National Financial, and Division President at mortgage servicing and data giant Black Knight. As CEO of Sagent, Sogorka plays a vital role in reinventing how banks and lenders power the homeownership and consumer lending experience for millions of borrowers.