TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/911047
FEATURE 32 | TH E M R EP O RT customers. For a servicer, it is impossible to understate the importance of being able to know who to contact and when. By the time many borrowers reach default, their (and our) options are already limited. In addition to better predicting the needs of our current customers, having actionable intelligence allows us to more accurately anticipate consumer behavior. That intel - ligence comes in several different forms of data, starting with traditional metrics like credit scores and payment history. Dig deeper and you'll find what's called "trended" data, giving lenders and servicers up to 30 months of payment histories, debt levels, and more. More recently, we are now seeing the value to both lender/servicer and borrower to including alternative data to gather a more complete picture of borrower and consumer behavior. That data could include club memberships, like Netflix, or tax/deed records, payday loans, and more. Now we truly have a 360-degree view of a borrower's financial situation, and we're able to proactively respond with products and services to meet their needs. Finally, by acquiring and maintaining this data, mortgage companies like RoundPoint are able to maximize our resources, waste less time and effort, and pass savings onto customers while protecting our margins. That includes providing improved work - flow—by better managing and understand- ing our portfolio, we can anticipate and take action on loans that might represent exceptions and require more man-hours to resolve. Prior to the advent of advanced ana- lytics, mortgage companies would have to go to great (and expensive) lengths to gather similar data sets. Large-scale polling and complex escrow analysis are now replaced with instant and streaming analytics that help us with critical decision-making. We can zero in on small populations of troubled borrowers. It's not just the large-scale polling and speed, however—the granular nature of this process is incredibly important, particu - larly as companies and their portfolios grow. Bottom line: you can't look at every loan, so knowing the state of your portfolio at a glance is crucial to reducing the cost per loan to service, and to accomplishing more with the same amount of staff. The Future of Analytics D espite ongoing challenges with data security and cyber attacks, the biggest danger (to the company and your borrow- ers) is in not embracing advanced analytics. Like a baseball team clinging to simple metrics that don't give a complete picture of the true value of a player, mort - gage lenders and servicers must be willing to embrace new tech- nologies, including artificial intel- ligence, which is rapidly changing how mortgages are marketed, originated, and even serviced. Many originators see the adop - tion of AI by the industry as a threat; however, both origination and servicing businesses will find that no computer will ever be able to serve customers (humans, that is) perfectly. It will continue to take the combined efforts of highly trained and committed staff and increasingly sophis - ticated technology to originate or service mortgages. Analytic systems will assist mortgage firms in knowing when to contact borrowers or prospective borrowers with what products or services. Staff will be key, however, in delivering that message, and in assisting customers with complex challenges. The mortgage business has always been, and will continue to be a "people" business. But we will continue to benefit from increas - ingly powerful programs to assist in data collection, interpretation, and analysis. CRAIG FREEL serves as SVP of Portfolio Management at RoundPoint Mortgage Servicing Corporation. He has more than 12 years of industry expe - rience and can be reached at craig.freel@roundpoint- mortgage.com. "Mortgage lenders and servicers must be willing to embrace new technologies, including artificial intelligence, which is rapidly changing how mortgages are marketed, originated, and even serviced."