To me, the endgame of “lifetime customer engagement” in mortgage is a continuous servicing-to-originations loop for consumers. This keeps and grows customer relationships while increasing MSR values and lowering origination cost. But as with all things mortgage, executing on this is harder than it looks, and involves two concurrent strategies.
Strategy one: finish modernizing the consumer journey in servicing for a smooth, consistent experience at every borrower touchpoint across the loan lifecycle. Strategy two: start building new blockchain plumbing to prepare for the next two decades.
At present, industry retention is only 21% (per MBA), which means servicers are still losing about four of every five customers in their portfolios. There are a few reasons for this.
First, data and communication gaps erode customer trust when they first go from originations into servicing.
Second, until now, originators have been better than servicers at offering new rate/term, debt consolidation cash-out, home improvement cash-out, and home purchase loans to consumers at the right times.
Third, customers can also stray when they’re offered non-mortgage products by other depositories or challenger banks.
Here's how servicers can solve all of these problems to create a lifetime customer engagement loop — and how you can exceed customer expectations today while building for the future.
Shorten the originations-to-servicing transition
The transition from originator to servicer is too often a consumer experience hiccup, and must be a primary focus of servicing modernization. Servicers can solve this by automating origination-to-servicing across planning, loading, mapping, converting, and testing processes.
For example, Sagent's LoanBoard software automates all LOS-to-servicing system processes like loading, mapping, converting, and testing. This enables real-time compliance when onboarding new servicing at any scale — and does so with today’s most-used LOS. And critically, it accelerates error identification/fixes which eliminates customer service gaps for borrowers.
Use fully real-time data to stay ahead of borrower needs
With a smoother transition from originations to servicing, the next step is to stay ahead of borrower needs and engage at the right time.
For servicers, the key lies in empowering borrowers to engage with real-time data about their home and financial profiles — and keeping them on your platform when the time comes to explore their options.
From letting customers start the new home search on your platform to staying a step ahead of borrower needs with pre-approvals and home-improvement loan offers based on their activity, fully real-time data makes it easier to provide them with offers that matter to them in the moment they need it most.
It's not enough just to offer self-serve and call it a day. Consumer expectations are evolving, and servicing customers expect both push-button simplicity and on-demand access to smart human advice.
We've seen consumer-first digital technology proliferating in originations over the last decade, and the servicing industry is finally catching up.
And if we get consumer-first servicing modernization right, we can close the servicing-to-originations loop, engage and retain borrowers, and prepare the infrastructure to set the stage for the next wave of consumer-first innovation.
Define the role of blockchain in lifetime servicing-to-originations loop
The pandemic forced a quick shift towards digital that we won’t go back from. As more banks and lenders embrace tech to prioritize the consumer experience, the next logical step is to streamline the process itself, and mortgage blockchain is the most impactful way to do so.
Mortgage servicers could track borrowers’ payments, perform required monthly reporting to GSEs and other stakeholders, manage non-performing loans through loan mods, and manage potential foreclosure, REO, and property preservation efforts on-chain with immutable recordkeeping to reduce risk and cost throughout the process.
Blockchain in servicing can also increase transparency by powering real-time data-sharing between servicers, investors/GSEs, regulators, and borrowers.
And blockchain can vastly improve MSR portability and value. Blockchain's immutability would make it so that pools of loans could be freely and easily transferred because all of the data from the point of origination is known and validated.
A mature mortgage blockchain will replace our industry’s “trust, but verify” approach to mortgages with truth — the immutable blockchain becomes the single source of true source data on borrowers, loans, and loan pools.
At Sagent, we’re laser-focused on our consumer-first servicing modernization vision from a SaaS software perspective. But we also have to build tomorrow while exceeding customer expectations today, which means building new blockchain plumbing to set the stage for innovation in the next two decades.
You might have seen Sagent and Figure partnering to pilot these concepts with Figure’s first lien originations in 2022.
They now have $25 billion in originations and aim to put a lot of this native on-chain as a proof case for 2022, just like they did for HELOC in 2019-2020. Sagent will help power this, and before you know it, it’ll be everywhere.
In the meantime, we continue to build the future as described in the sections above.
