For me, the endgame of "lifelong customer loyalty" in mortgages is a continuous service-to-original loop for consumers. As a result, customer relationships are maintained and expanded, while at the same time the MSR values are increased and the procurement costs are reduced. But as with all mortgage things, doing it is harder than it looks and involves two concurrent strategies.
Strategy 1: End the modernization of the customer journey in service for a smooth, consistent experience at every touchpoint of the borrower across the entire credit lifecycle. Strategy two: start building new blockchain installations to prepare for the next two decades.
Currently, industry retention is only 21% (per MBA), which means servicers are still losing around four out of five customers in their portfolio. There are several reasons for this.
First, data and communication gaps erode customers' trust when they first transition from origination to service.
Second, originators have traditionally been better than service providers at offering consumers new rates / maturities, debt consolidation, home improvement payouts, and home purchase loans at the right time.
Third, customers can also wander when offered non-mortgage products by other custodians or challenger banks.
Learn how service reps can solve all of these problems to create a lifelong customer loyalty loop – and how you can exceed customer expectations today while building for the future.
Shorten the transition from origination to service
The transition from originator to servicer is all too often a consumer experience issue and needs to be at the heart of modernizing the service. Servicers can solve this by automating the origination-to-service processes across planning, loading, mapping, converting and testing processes.
For example, Sagent's LoanBoard software automates all LOS-to-Service system processes such as loading, mapping, converting and testing. This enables real-time compliance when onboarding new maintenance of any size – and this with the LOS that is most used today. And most importantly, it speeds error detection / resolution, closing customer service gaps for borrowers.
Use real-time data to stay one step ahead of the borrower's needs
With a smoother transition from origination to servicing, the next step is to stay one step ahead of borrowers' needs and get involved at the right time.
For service providers, the key is to enable borrowers to interact with real-time data about their residential and financial profiles – and keep them on your platform when the time comes to explore their options.
From letting customers start their new home hunt on your platform, to asking borrowers with pre-approval and home loan offers based on their activity, complete real-time data makes it easy for them to come up with offers that matter to them the moment you need it most.
It is not enough to just offer self-service and end the day. Consumer expectations are evolving, and service customers expect both the push of a button simplicity and on-demand access to intelligent human advice.
We have seen consumer-centric digital technology spread in origination over the past decade, and the service industry is finally catching up.
And if we get consumer-first-serving modernization right, we can close the servicing-to-origination loop, attract and retain borrowers, and prepare the infrastructure to pave the way for the next wave of consumer-first innovation .
Define the role of the blockchain in the lifelong servicing-to-origins loop
The pandemic has forced a rapid shift to the digital that we will not be returning from. As more banks and lenders use technology to prioritize the consumer experience, the next logical step is to streamline the process yourself, and the mortgage blockchain is the most powerful way to do it.
Mortgage servicers could track borrowers' payments, provide required monthly reporting to GSEs and other stakeholders, manage bad loans through loan modifications, and manage potential foreclosure, REO, and property protection efforts on the chain with immutable record to reduce risk and cost throughout the process .
Blockchain in service can also increase transparency by enabling real-time data exchange between servicers, investors / GSE, regulators and borrowers.
And blockchain can vastly improve the portability and value of MSR. The immutability of blockchain would enable credit pools to be freely and easily transferred, as all data is known and validated from the place of origin.
A mature mortgage blockchain will replace our industry's "trust but verify" approach to mortgages with truth – the immutable blockchain will become the only source of real source data on borrowers, loans, and pools of loans.
At Sagent, from the SaaS software perspective, we focus on our vision of customer-oriented maintenance modernization. But we also have to build tomorrow and at the same time exceed customer expectations today.
You may have seen Sagent and Figure partner to test these concepts with Figure's first liens in 2022.
They now have $ 25 billion in originations and want to use much of that native on-chain as evidence for 2022, just as they did for HELOC in 2019-2020. Sagent will help power this, and before you know it, it will be everywhere.
In the meantime, let's keep building the future as outlined in the sections above.