Automation Isn't the Hard Part Anymore. Coordination Is.

Mortgage servicers have more technology working behind the scenes than ever before. Many manual processes are now automated, systems are more connected, and information is readily available. However, having those pieces in place doesn't necessarily make it easier to know what needs attention, what should happen next, or where risk is building across the organization.

That's because the challenge for servicers has shifted. Automating individual processes is one thing. Making sure information arriving from different parts of the servicing operation comes together at the right time, is evaluated against the right rules, and drives the right response is something else entirely. For servicers, the next question isn't simply what else can be automated. It's whether all the automation works well enough together to drive the results needed.

Default Servicing Doesn't Happen in One Place

A single loan in default can involve loss mitigation, foreclosure, and bankruptcy, often at the same time. Borrowers, attorneys, vendors, and internal teams each play a part in those processes. These processes don't follow a clean, linear sequence. They overlap, and what happens in one can change what needs to happen in another.

Something is always changing mid-process:

• A borrower submits new documentation. That might affect an open loss mitigation review, associated timelines, what to tell the borrower next, and what other parties need to know.
• A bankruptcy is filed. That might change which activities can continue and which communications should stop, and it requires notifying every party involved.
• A foreclosure sale date is set or postponed. Other activities already underway may be affected, and the borrower and attorneys both need to know what comes next.

Each event starts as a single update, but its effects rarely stay in one place. Any one of these processes may already be automated. What matters is whether those processes respond to what's happening elsewhere.

Where the Friction Happens

When work stalls in default servicing, it's seldom because one automated process failed. In fact, each automated process may be doing exactly what it was designed to do. Friction often appears in handoffs when one process's outcome needs to influence what happens elsewhere.

• From borrower action to next step. A borrower submits documents, but what happens next depends on where the loan stands in other processes.
• From internal team to attorney or vendor. A change on the servicer's side has to reach outside parties in time, with the right context.
• From exception to the right person. Something falls outside the expected path, and it’s unclear who needs to see it or what should happen while it's resolved.
• From operations to management. A file's status is spread across systems, making it harder to see where work is stuck or at risk.

None of these gaps means a process broke. Each process was built to handle its own piece of the work. Coordinating what happens between them is a separate problem, and it grows as automation expands. The more processes servicers automate, the more the operation depends on recognizing a change in one area and reflecting it in another. Each stage builds on the last: manual processes, then automated processes, then automated processes that respond to one another.

Connecting Systems Isn't the Same as Coordinating Work

When processes don't work together, the first instinct is often to connect the systems behind them. It’s a reasonable step. Integration lets data move from one system to another, so you don’t have to re-enter information or track it down. But moving information isn't the same as knowing what to do with it.

When a borrower submits new documentation, a bankruptcy is filed, or a sale date changes, the servicing operation still has to determine what happens next. What should start, and what should stop? Who needs to know, and which rules apply? An integration can tell another system that something has changed. On its own, it doesn't decide what that change means for the rest of the work.

Dynamic business rules do that work. They evaluate new information in the context of what's already happening with the loan and turn an event or update into an action. As information comes in, the rules can determine what should happen next and whether a new risk or exception has emerged.

Orchestration is what puts those rules to work across the operation. It connects people, processes, systems, and data, so a change in one place becomes coordinated action wherever it's needed.

What This Looks Like in Practice

Go back to the borrower who submits new documentation mid-review. In a coordinated operation, that submission doesn't just land in a queue. It triggers the next steps based on where the loan stands across its other processes. The rules that apply to that file determine the next steps, including what the borrower hears next, and who else needs to know. Attorneys and other parties involved get the update and the context they need, without anyone having to track them down.

But coordination can't stop at the individual loan. The same events, rules, and exceptions that drive action on one file also reveal what's happening across the operation.

When information from upstream, downstream, and external sources comes together at the right time, servicers can move from one loan's status to patterns and risk across many. A manager can see which loans are approaching a critical milestone and where exceptions are piling up, without asking someone to pull a report. Instead of piecing information together from individual systems, teams and management can see where risk is emerging and where action may be needed.

Clarifire's rules-based workflow orchestration application is built to support this work for default mortgage servicers. CLARIFIRE applies dynamic business rules to determine what happens at the loan level and gives teams and management aggregated visibility into exceptions and risks across the larger operation.

Make the Work Move Together

Servicers have made significant progress automating individual processes, and there is still more work that can and should be automated. The bigger opportunity is to get more from the automation already in place by making those processes work together.

Default servicing will always involve changing circumstances and overlapping processes, with many people and systems in the mix. The better those pieces respond to one another, the easier it is to manage exceptions and see what needs attention.

The next opportunity in servicing isn't simply automating more work. It's making sure all the work moves together.

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Jane Mason | @janemasonceo

Jane has applied her vast experience (over 25 years) operating process-driven businesses to successfully redefine client-focused service. Jane has worked with expert programmers to apply cutting-edge web-based technology to automate complex processes in industries such as Financial Services, Healthcare and enterprise workflow. Her vision confirms Clarifire's trajectory as a successful, scaling, Software-as-a-Service (SaaS) provider. A University of South Florida graduate, Jane has received many awards related to her entrepreneurial skills.

 

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