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13 Journal SPONSORED CONTENT HOW MORTGAGE SERVICERS CAN TURN COVID-19'S BIGGEST CHALLENGES INTO CUSTOMER RETENTION Mortgage servicers face two huge challenges in the COVID-19 era: (1) how to prepare for more serious homeowner hardships as key relief policies expire in late 2020 and early 2021, and (2) how to retain four of five borrowers who currently get new loans from a new lender. Here's how modern servicing technology is helping. TECH WINS COVID-19 COMPLIANCE & CUSTOMER CARE IN SUMMER 2020 July 1 was a giant deadline for COVID-19 mortgage relief, and a great example of how technology can ensure servicer compliance and great customer care. is was the go-live date for Fannie Mae and Freddie Mac programs allowing borrowers who'd been in forbearance to defer missed payments to the end of their loan's life. Only one problem: many servicing systems didn't even have COVID-19 hardship statuses when the pandemic began, let alone real-time configurable compliance tools. But Sagent had this ready to go on day one. Not only could the servicers we power begin these deferrals for customers on day one, they could also implement (and fully document for regulators, investors, and customers) the complex, noninterest-bearing second lien that's due at payoff for this deferral program. e results: compliant, confident servicers. Relieved customers. And relieved hardship customers become more loyal when you care for them like this. PREPARING FOR COVID-19 COMPLIANCE DEADLINES IN DECEMBER 2020 & APRIL 2021 Next up, servicers face two more big deadlines: COVID-19 foreclosure moratoriums expire on December 31, and CARES Act long-term forbearances expire in April 2021. New or extended relief policies will follow the political cycle and the path of the virus, but our approach is to make sure servicers are ready now, based on timelines dictated by today's policy deadlines. Both of these policies mean servicers must be ready for forbearances potentially escalating into default scenarios. MBA data shows total forbearance volume declining (from 8.39% of mortgages in forbearances in June to 5.92% in October), but 5.92% still means 3 million homeowners in forbearance. Not all of those will recover by December or April. eir data also demonstrates a growing percentage of homeowners in forbearance asking for extensions, with forbearance extensions accounting for 72.08% of forbearances in October (up from 65.35% in early September). is is happening because the CARES Act allowed for two 180-day forbearance periods, but servicers implement forbearances in 90-day increments. Borrowers need more time, and this is why so many are extending forbearances. If servicers check in with borrowers in November and find many are still not ready, that's a signal some forbearances will escalate into default scenarios. is is where Sagent's servicer-facing Tempo default management suite and consumer-facing Account Connect suite combine to protect servicers while caring for strained homeowners. HOW SMART SOFTWARE PROTECTS SERVICERS AND STRAINED HOMEOWNERS Even the most strained consumers expect an easy bank-on-your-phone experience. ey expect it even more when they're stressed and need answers fast. Enter Sagent's servicer-branded Account Connect. is is where consumers can: » Actively manage homeownership from their phones » Identify and act on faster payoffs and cheaper refis during good times » Immediately process forbearances and loan mods during strained times In this example, they'd be able to apply for hardship assistance in minutes. e servicer then uses Sagent's default management suite Tempo to run proprietary or agency AUS to produce fully compliant options for every scenario the borrower is eligible for. ink DU, LP, and proprietary origination AUS, but on steroids—because loan workout options are far more complex to underwrite while remaining compliant with existing loan commitments across all federal and 50 state requirements. Tempo's deep sophistication makes it simple so the servicer can push options and conditions to borrowers right away to give them peace of mind when they need it most. CUSTOMER RETENTION CAN'T JUST BE IN GOOD TIMES Again, the results are: compliant, confident servicers. Relieved customers. And as I noted above, relieved hardship customers become more loyal when you care for them like this. is is how homeowner hardship quick care drives retention. Customers spend mere months in the origination process but can be with their servicer for life—if their servicer can nail customer care during good times, and especially during hardships. More on customer care during good times in my next piece. Dan Sogorka is the CEO and President of Sagent, a leading fintech company modernizing mortgage and consumer loan servicing. Sogorka has led digital transformation in housing for two decades. Previously, he served as CEO of digital mortgage point of sale provider Cloudvirga, President of EXOS Technologies, EVP of Servicelink (a $1B revenue subsidiary of Fidelity National Financial), and Division President at mortgage servicing and data provider Black Knight.

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