DS News

56 C O V E R S T O R Y / S E T H W E L B O R N Here's what mortgage servicing experts learned this year and how they're working to apply those lessons going forward. 2019 was a year of change and challenges for servicers. e industry faced continued damage from natural disasters, the shifting needs of a changing mortgage customer base, and the ongoing challenges of innovating and achieving success in a low-volume environment. As we approach the end of 2019, DS News spoke to servicing industry leaders about what they learned this year, and what to expect going into 2020. WHAT TO EXPECT IN 2020 Mike Rawls, EVP of Servicing for Mr. Cooper, outlined three key factors to look at in 2020: continued pressure on costs, a focus on natural disasters, and—possibly surprising to some—a chance of rising delinquencies in the months to come, even after historically low delinquency rates nationwide. "One of the other major themes in 2019 has been the continuance of historically low delinquency rates across the nation," said Caroline Reaves, CEO, Mortgage Contracting Services, who added that this trend "goes hand-in-hand with the strong economy and low unemployment rates we have also been seeing." CoreLogic reported in November that the foreclosure inventory rate fell to 0.4% in June, which equals the lowest for any month since January 1999. e share of mortgages that were in any stage of delinquency was 4% in June—a decline from last year's 4.3%. What might make delinquencies rise after a long decline into historically low levels since the Great Recession? Rawls points to slowdowns in home prices across the country. In October, a Bankrate study noted that homebuyers were "sailing calm waters" with lower rates and slowing home price appreciation. Fannie Mae Chief Economist Doug Duncan observed that "at the beginning of 2019, rates started to come down, then we saw this big drop in rates. We didn't expect such a significant drop-off—it was 30 points more than we forecasted." "Home price appreciation has slowed across the country, and we are starting to see early stage delinquencies rising from historic lows," Rawls told DS News. "Staffing appropriately for outbound early stage collections and to assist customers in need will become more important in 2020." Rawls also spotlighted the rising costs of servicing. DS News recently reported that Mid America Mortgage, Inc. severed ties with its subservicers in an effort to cut costs, opting instead to bring servicing in-house. is will mean utilizing new technologies to ease the transition, as Mid America noted that it had made investments to digitize its servicing division by encouraging paperless billing and electronic payments. Rawls echoes the importance of using

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