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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 48 August 2023 S P O N S O R E D C O N T E N T M ortgage fintech narratives are mostly about cool new innova- tions coming to market, but one key thread has held all narratives and innovations together since the beginning: regulatory compliance. Let's recap the mortgage innovation timeline to show the role of regs and compliance, then let's review how servicing fintech will deliver industry- changing results in 2024 and beyond. How Policymaking Drove Mortgage Innovation During the Post-2008 Era T he digital mortgage era began 13 years ago this summer when the post-2008 crisis Dodd-Frank re-regulatory bill was enacted July 21, 2010. This body of laws created the Consumer Financial Protection Bureau (CFPB), which announced its first major initiative—new con- sumer mortgage disclosures—on May 18, 2011. You all know this as TILA-RESPA Inte- grated Disclosures, aka TRID, and it fueled the biggest mortgage innovation wave of the modern era. That tech race to the October 3, 2015, TRID compliance deadline led to the Rocket Mortgage launch, as well as creating the entire Point of Sale fintech category. This did two things. First, it helped mod- ernize the rest of the originations tech stack. Second, the "do it all on your phone" approach to innovation led to a total overhaul of the consumer experience from paper to digital. Then came Day One Certainty (D1C) from Fannie Mae October 24, 2016, and Fred- die Mac's Asset & Income Modeler (AIM) shortly after. D1C and AIM use investor poli- cies to drive lender adoption of digital loan origination tools in exchange for risk relief. This paved the way for rapid innovation in the $2 trillion per year originations sector until the pandemic hit. Then pandemic policy—most notably the CARES Act signed into law March 27, 2020—led to rapid innovation in the $13 tril- lion servicing sector. Defining the Role of Servicing Fintech in a 2023-24 Context I assumed the CEO role of Sagent that same month, and we began by defining the role of mortgage servicing fintech in two ways. We said Sagent-powered customers: 1. Must have real-time platforms for real- time markets and regulations. 2. Must be best-in-class on three key Cs: Customer, Cost, and Compliance. We review this often, and it's holding up well in a 2023-24 context. By "Customer," we mean transforming the consumer experience. We often call the endgame here "homeowner-first servicing modernization." This includes applying all the do-it-on-your-phone advances in origina- tions to the servicing space. The tech must enable consumers to self-serve for almost any scenario and get immediate human help when needed—and those human advisors must see exactly what the consumer sees. It's even more important in servicing because servicing is where customer relationships are nurtured, grown, and retained via new origi- nations or attentive hardship resolution. By "Cost," we mean lowering not just IT cost but servicing operations cost. This is a critical distinction that's especially important in servicing. We're the only major servic- ing software player with core, default, and consumer platforms that are all synced by real-time data, cloud-based, and open API. This means a few key things: servicers can streamline ops by needing fewer ancillary systems. They can configure (rather than code) for real-time investor and regulator changes. And they can easily build their own processes for custom use cases across core, default, and consumer servicing. All of this lowers IT and especially operations cost, and the latter is where servicers beat competitors on service and profitability. By "Compliance," we mean ensuring every compliance detail is innately built into every user action—regardless of whether that user is a consumer or a servic- ing employee. This is where Sagent's three Cs and "real-time platforms for real-time markets and regulations" approach comes 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. MORTGAGE FINTECH WARM- UP TOOK 13 YEARS. NOW FOR SOME RESULTS. B y DA N S O G O R K A