Containing Costs and Boosting CX: Top Strategies for Smart Mortgage Servicers

top strategies for smart mortgage servicers

After serious declines in new mortgages and refinancing in 2023, volume for both will pick up in 2024 as interest rates continue to slowly drop, according to industry forecasts. To capture more of this new business and shore up existing accounts, mortgage lenders and servicers are investing to boost tech-driven efficiency and customer experience (CX) and preference, especially in billing and payments.

Mortgage origination volume will grow 23 percent in 2024 to $2 trillion, with a 16 percent increase in purchase, according to January 2024 estimates by the Mortgage Bankers Association. Refinancing volume will jump 50 percent, off an extremely low base in 2023, MBA predicts

Visit us at booth #706 during the MBA Mortgage Servicing Solutions Conference, February 20 – 23, 2024

Tech for better customer relationships and costs

Rather than simply count on increased volume to increase revenues and profits, mortgage lenders and servicers are looking within to improve operations and customer interactions. They named cost-cutting and business process streamlining as top 2024 priorities, according to Fannie Mae’s Mortgage Lender Sentiment Survey®.

To achieve their goals, many firms are prioritizing automation and digital transformation. In fact, 54% of mortgage lenders, servicers and industry participants will increase their tech spending in 2024, according to National Mortgage News’ 2024 Predictions Survey.  

Mortgage servicers are focused on keeping on-time payments arriving. Consumers are struggling with rising debt as delinquencies for credit cards, auto loans and other obligations continue to increase. Compounding the challenge for servicers, unhappiness over mortgage transfers and the resolution of escrow and other account issues has decreased customer satisfaction and trust, according to The J.D. Power 2023 U.S. Mortgage Servicer Satisfaction Study.

Improving billing to prompt payments

Billing statements and other customer communications are the gateway to building stronger relationships and lowering payment barriers. To make the most of these interactions, servicing leaders are turning to cloud platforms for state-of-the art customer communications management.

CCM software gives companies the control and flexibility to improve customer satisfaction by developing and delivering communications based on customer preferences and personalized information. CCM solutions also automate and simplify billing and payment operations, including streamlining compliance.

With CCM technologies, servicers can:

  • Digitally transform operations

By creating standardized communications templates and digital content libraries, servicers can easily keep messaging, account information, images and other content up-to-date and accurate. Simply upload a single data file or push a real-time API call and the system dynamically merges all elements to customize each communication. Batch processing optimizes workflows, reducing turnaround times and associated costs, while automation frees up employees for higher-value work.

  • Personalize the experience

Leveraging customer data, business rules and custom tables, CCM software can tailor communications to individual needs and preferences, such as meeting consumer expectations for digital and mobile options. This personalized touch fosters trust engagement and timely payments.

When customers lack trust, the firms’ costs increase materially because those customers will gravitate to a more costly service channel, according to The J.D. Power 2023 U.S. Mortgage Servicer Satisfaction Study. 

  • Enhance compliance

Compliance with laws and regulations including the Fair Credit Reporting Act, the Gramm-Leach-Bliley Act and the Consumer Financial Protection Bureau’s Servicing Rules is paramount. CCM software enables adherence by making it easy to update regulatory language and tailor disclosures in communications. Additionally, the software provides a secure audit trail, facilitating regulatory compliance reviews.

  • Build in continuous improvement

CCM software provides valuable data for tracking and reporting, including email and text open rates, to gauge the effectiveness of communications. It lets servicers identify areas for improvement and tailor outreach based on borrower behavior. This data-driven approach ensures communication strategies remain relevant and effective, maximizing impact on costs and customer satisfaction.

By leveraging technology, mortgage servicers can create a more efficient and customer-centric communication environment, promoting trust and positive relationships with borrowers while gearing up for the next cycle.

Contact us to learn more.