Disasters Demand Automation for Servicing
Managing through back-to-back natural disasters is a terrifying circumstance for homeowners as well as mortgage servicers, and this year’s storm...
4 min read
As we all are preparing for the holiday season, closing the year out, and wondering what the New Year will bring, effective borrower communication needs to be at the top of our Christmas list and a primary area of focus for 2025. Your borrowers will show more apprehension and face additional hardship as the housing market continues to shift, economic and climate concerns remain volatile, and administration changes begin to impact policy. Your customer portal may make the difference between a satisfied customer and a frustrated borrower. Ensuring that your borrowers can access meaningful information and self-service tools will only continue to become more vital to your daily servicing business, as amidst this time of disquiet, an interest rate drop could incent your valued customers to go elsewhere.
Tapping Automation & Remote Communication
Borrowers and servicers made a lot of headway in terms of access to automation and remote communication as a result of the pandemic and ongoing natural disasters. Fortunately, we continue to see our industry permanently adopting many of these practices. Along these lines, the Federal Housing Administration (FHA) will finalize borrower communication changes effective January 1, 2025. Published under a proposed rule, Modernization of Engagement with Mortgagers in Default, the FHA is removing in-person requirements for borrowers in default. The new rule will encompass industry feedback and consumer protections, allowing borrowers access to electronic and remote communication options made available during the pandemic. The final rule will also eliminate some previous exceptions, including exemption when a property is not within 200 miles of a physical office of the servicer and situations where the borrower is not living in the subject property.
This modernization aligns with technical advancements and borrower preferences, aiming to enhance efficiency and effectiveness of borrower engagement. Clarifire understands modernization and has consistently been at the forefront of automation, innovative workflows, smart business rules, and complex workout decisioning, predating the pandemic and rise in natural disasters hit. These capabilities go beyond automation and mobile accessibility and have proven successful in assisting distressed borrowers throughout the default process. Think of CLARIFIRE® as the process automation game changer, uniquely developed to ease your rollout of FHA changes, incorporation of updates from Fannie Mae and Freddie Mac, and other industry requirements, as well as your own proprietary process improvements, so your borrowers feel the benefits of easy and fruitful engagement, not the pain of disruption.
Borrowers Assistance & Self-Service Pays Off
As our industry, its participants, and service providers evaluate and evolve practices, an important gauge is the J.D. Power 2024 U.S. Mortgage Servicer Satisfaction Study. This year’s study emphasized a positive reaction to servicer improvements in terms of digital experiences and streamlined issue resolution, citing that these efforts were “offsetting challenging market conditions.” The 2024 findings highlighted the following aspects of borrower status and sentiment:
- The financial health of borrowers has declined sharply, which has led to lower satisfaction percentages. Although this is concerning it is consistent with previous studies.
- Escrow costs continue to rise, causing greater concern for borrowers and necessitating more education and guidance in this area.
- Overall satisfaction with mortgage servicers improved this year and is directly correlated to improved problem resolution and borrower satisfaction with digital channels.
- Controlling costs remains a challenge, with self-servicing being a key driver for success in reducing costs. Albeit successful, nearly half of distressed borrowers still resorted to calling customer service first.
Overall, survey results indicated that servicers who effectively implement modern communication methods consistently foster enduring relationships with borrowers, leading to increased trust and loyalty. Recent natural disasters are a great example of using automation to promote borrower satisfaction. Our servicing clients have been able to bulk process disaster and forbearance relief before borrowers even need to request assistance. When thousands of people have been without cell service, electricity, and ways to communicate, automating relief processes can initiate forbearance, alleviate anxiety and minimize borrower default exposure until access to communications is restored.
Incorporating meaningful efforts in terms of borrower communication and access has evolved exponentially over the past few years, introducing even greater functionality through artificial intelligence (AI) capabilities. Coupled with CLARIFIRE® automated workflow, your borrowers gain 24/7 real-time availability to significant self-serve capabilities and dynamic decisioning, and readily see the results of your internal proactive processing of relief provisions. This higher level of borrower engagement is fully transparent and interactive, allowing your borrowers to do what they need, when, and how they need to, while automated processes transpire in the background. This adds to borrower satisfaction, reduces your cost to service, and improves operational efficiencies.
Borrower Communication Continues to Evolve
The importance of meeting borrower needs and, more importantly, frictionless accessibility expectations increase in relevancy with each coming year and is actually a panel topic for the upcoming MBA Servicing Solutions Conference & Expo. Borrower communication will continue to be a germane component of whatever comes your way, whether it is borrower retention, rising default scenarios, expanding product offerings, changing regulation and oversight, or simply maintaining cost and resource efficiency within your organization. Ensuring this communication access on various levels of engagement, from a phone call to self-serve, doesn’t have to be a challenge with CLARIFIRE®.
During this time of year, when servicing resources can be tight and borrower anxiety high, stay focused on what’s important in the long term. Let CLARIFIRE® help you deliver borrower satisfaction, timely implementation of industry requirements, and more. We’re here to help you embrace whatever the new year may bring.
Contact us today to find out how you can provide real-time dynamic borrower capabilities that support self-serve activities, proactive bulk processing, and everything in-between. It’s time for you and your borrowers to experience the digital age, with CLARIFIRE®, truly BRIGHTER AUTOMATION®.
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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