TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/911047
30 | TH E M R EP O RT FEATURE J ust over 45 years ago, Intel introduced the first micro- processor. Ten years later, the personal computer was making its way into Ameri- can households. Another decade gave us the first internet users, and in recent years the combina- tion of faster processing power, cloud computing, and advanced analytics has changed everything from baseball to business, includ - ing the real estate and mortgage finance industries. At Round- Point, we've seen remarkable changes in our ability to both gather and interpret data, which has improved every facet of our company—from adding new effi - ciencies to dramatically enhancing our ability to provide top-notch customer service/experience. But one thing that hasn't changed is our belief that while technology and new analytical approaches are critical to the success of our business, the mortgage industry remains a "people" business. Perhaps more than any other business/technology innovator, Apple Founder Steve Jobs under - stood the relationship between computers and people, and never lost sight that one could never succeed without the other—both would only realize their full potential by working together. "It's not a faith in technology," he said. "It's a faith in people." As we examine how new analytical ap- proaches have revolutionized the origination/servicing industries, we would do well to keep Jobs' words in mind. No More Gut Feelings F irst, let's look at what kind of data mortgage servicers col- lect, and how that has changed in just the past 10 years. The data can be separated into two broad categories: loan level and operational data. Loan-level data is just that—detailed informa - tion that is key for servicers and subservicers that purchase loans and mortgage-servicing rights. That data is critical for helping companies make sense of their portfolios, utilizing modeling and projection systems to deter - mine appropriate levels of risk and begin to understand and predict consumer behavior. Operational data focuses on activity done by either employees or vendors, with an eye on im - proving efficiencies. By having a clear idea of how much it costs to originate a loan, lenders can spot and streamline any inefficiencies, passing the savings on to the con - sumer. At RoundPoint, it is vital that we know how successful our customer service representatives are with customers, so we track how quickly inbound calls are an - swered, how often calls are aban- doned by customers, and how quickly we respond to phone calls and emails. We also keep a close eye on our vendors, and collect as much data as possible so we can ensure that standards are always maintained. While those fairly new to the industry may not be impressed or surprised by this, those of us who have been in the industry for a while recognize the fundamental shift over the last decade. No longer does our industry rely on hunches, gut feelings, or scattered and antiquated tracking systems when it comes to delivering first- rate service and maximizing our efforts. Now it starts at the loan level: having centralized systems that monitor credit, income, and assets combined with prepayment or credit/default levels, is crucial to modeling events such as refi - nances or defaults accurately. Additionally, modern data tracking and analysis extend well beyond origination. Today's mort - gage servicer is much more than just a bill collector. In order to be a trusted and valuable resource for the customer, servicers must track more information once the customer is in the system. What are their communication preferences? Do they prefer to be contacted via email or phone, and at what times of day? All of that goes to the customer experience and helps us reduce costs by let - ting our customers "self-service" their loan. Instead of a one- size-fits-all model that was the standard a generation ago, we can interact with customers according to how they prefer to be reached. That benefits the company by increasing efficiencies, but more importantly, makes good on a promise to put the customer first, and provide a truly tailored ser - vice that treats them as more than just a loan file. Going Granular O ne of the biggest benefits of loan level and operational data tracking and analysis is better portfolio management and loan predictability, crucial in today's market, which is characterized by ever-tightening margins. Lend - ers and servicers also face tough scrutiny from regulators, and hav- ing a firm grasp on your portfolio isn't a luxury—it's a must. At RoundPoint, our data collection and analytics give us the ability to closely monitor our portfo - lio, identify troubled borrowers earlier, and spend our resources more effectively in contacting our Number-Crunching Analytics are taking the guesswork out of mortgage origination and servicing, setting the stage for a future where there's less wasted time and the client is more than just a loan folder. By Craig Freel