COVID-19 has created a housing boom, requiring new mortgages for those who are moving, but also financial hardship for others who cannot make their mortgage payments. This dual-track situation has posed a major customer service communication challenge for the mortgage servicing industry.
The challenge is only going to grow as federal foreclosure moratoriums expire in June. In fact, the Consumer Financial Protection Bureau (CFPB) plans to closely monitor how servicers engage with borrowers, respond to borrower requests and process applications for loss mitigation, which is an alternative to foreclosure that helps borrowers avoid losing their homes.
“There is a tidal wave of distressed homeowners who will need help from their mortgage servicers in the coming months,” said CFPB Acting Director Dave Uejio. “Responsible servicers should be preparing now.”
CFBP recommends servicers:
- be proactive
- make sure borrowers have access to information and documents
- address language issues
- handle inquiries promptly
The CFPB’s goal is to give homeowners the opportunity to save their homes before foreclosure is initiated.
Revving Up Communications
Meeting CFPB expectations and their customers’ needs for communications may require a new approach from mortgage servicers—a priority on fast communication.
A variety of studies show that the mortgage servicing industry is behind when it comes to providing easy access to information. The most recent J.D. Power 2020 U.S. Primary Mortgage Servicer Satisfaction Study, published in July 2020, found that customers face long wait times with call centers because of limited online information and proactive outreach from their mortgage companies.
Mortgage servicers need to develop a communication strategy and fast-track customer service communication. Of course, good communication strategies and practices also apply to borrowers who are not distressed.
CCM to the Rescue
Cloud-based customer communications management (CCM) software gives mortgage servicers the control and flexibility to quickly and easily create and update critical information to billing statements and other loan-related communications, improving the customer experience. Consider all the documents and information that need to be developed and communicated to a borrower:
- monthly billing statements
- annual escrow analysis
- refund checks
- year-end processing including 1098 mortgage interest statements
- payment relief options
- refinancing steps
- call-center numbers and other customer service choices
- self-service and other website tools
- digital payment portals
- disclosures by state and other compliance-related information
- payoff amounts
CCM technology also enables omnichannel communications so customers can choose their preferred delivery method, including mail, email and text messaging. By communicating the way customers want, mortgage servicers can more effectively reach and engage them. More than three out of four consumers surveyed in 2020 by Keypoint Intelligence said it was important for them to decide which communications channels are used. In addition, 51% of customers want both digital channels and paper, according to a 2020 survey from ACI/Speedpay Pulse.
Time for Action
Whether mortgage servicers are working with distressed borrowers or not, the average customer satisfaction score for this industry is low compared to others. Now more than ever, the industry should push for digital transformation to improve the mortgage customer journey for homeowners.