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MortgagePoint ยป Your Trusted Source for Mortgage Banking and Servicing News 40 June 2024 F E A T U R E S T O R Y SIMPLIFYING THE DIGITAL MORTGAGE PAYMENT PROCESS Jeff Osheka of REPAY explains how enhancing payment processes with modern technology can smooth the remittance experience for consumers and enable greater speed, efficiency, and control of collections for lenders. B y J E F F O S H E K A M ortgage delinquency rates in early 2024 are trending up- ward as a result of economic pressure bouncing back from unusually low levels of the past year. The trend of increasing mortgage delinquen- cies for all loan types can be traced back to the emergence from the pandemic economy in 2022. This trend is likely to persist as credit card spending and home buying continue to return to normal levels. So, how can lenders ensure the timely repayment of mortgage loans? While guaranteeing full repayment of mortgages on time is primarily in the hands of borrowers themselves, lenders can optimize collections with digital technology by making loan repayments easier, more convenient, and fully traceable. Enhancing payment processes with modern technology can ease the remittance experience for con- sumers and enables greater speed, efficien- cy, and control of collections for lenders. Borrower Expectations Are Evolving F or decades, borrowers could only pay their mortgage payments with paper checks, bank transfers, or by physically depositing payments at a lender's location. However, consumer preferences are evolv- ing. They have become accustomed to the digital payment options offered in their transactions with eCommerce retailers, in- app purchases, utility providers, as well as other regular bills, and online purchases. For consumers, the idea of making a mortgage payment via mailed checks feels outdated, slow, and offers no way of proving the check is in the mail until it is postmarked and delivered to the lender. A generational divide is on the horizon. If they have not already, lenders soon may find that many first-time home buyers do not have bank checking accounts, and do not understand the need for one, as all of their payments are made digitally. To remain competitive, mortgage lenders and servicers must adapt to and accommodate this new generation of borrowers who do not comply with the standard paper check payment processes that the mortgage industry has depended on for decades. The payment landscape is also evolving to meet the demands of borrowers. With the rise of debit card acceptance, online payment portals, ACH transfers, and interactive voice response (IVR) payments, lenders can now accept payments through a range of methods. This flexibility provides borrowers with greater financial control, enabling them to align budgeting strategies with their preferred payment methods and avoid penalties due to the instant nature of digital payments. As consumers have already become accustomed to the convenience provided by digital payment technology from online purchases and bill payments, lenders who cannot provide the same level of flexibility risk losing potential borrowers to competing lenders. Lender-Borrower Relationships Are Evolving Too A side from the benefits to consumers, digital payment options and tech- nologies create new avenues of commu- nication between lenders and borrowers. Much of the communications consumers experience in their personal lives is instant. Whether communicating socially, submit- ting a customer complaint, or sending a direct message to a coworker, the exchange J E F F O S H E K A , SVP, Mortgage Vertical Leader at REPAY, has been in the financial services industry for more than three decades, beginning his career in the mortgage servicing industry with Ryan Financial Services and NVR Mortgage. His 15 years of experience in mortgage originations, servicing, and secondary marketing have provided him with a unique understanding of all facets of the industry. He has devoted his career working with technology firms to innovate and expand the efficiencies of the industry. His work with organizations such as Ellie Mae, Ultraprise, ZC Sterling, Decade Systems, Lydian Data Services, ISGN, Sagent, and SitusAMC has provided him insight, knowledge, and experience of the challenges of both originators, servicers, and the overall capital market. He has been a speaker at various regional and national mortgage related conferences, and is a muti-published author.