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MortgagePoint ยป Your Trusted Source for Mortgage Banking and Servicing News 28 November 2024 C O V E R S T O R Y compliance and addressing regulatory concerns. Return of the Graceful Exit: In an- ticipation of some borrowers exhausting loss mitigation options, servicers must be prepared to help these borrowers transition out of their properties grace- fully, especially those with accumulated equity. Providing guidance and support during this process will be crucial for servicers in 2025. 2. LoanCare's Strategy and Adapt- ability Our approach involves investing in cutting-edge technology, including gen- erative AI and machine learning, while closely monitoring regulatory changes to ensure compliance with emerging guidelines. We are refining our loss mitigation and default management strategies to better assist borrowers who may need help exiting their properties, emphasiz- ing empathy and personalized support. 3. Risk Mitigation Strategies Diversifying our client base and loan portfolio helps mitigate risk in the face of economic fluctuations. Continuously monitoring and assessing market conditions allows us to be proactive in our approach and adjust our strategies as needed. Maintaining a strong focus on customer service and borrower support helps build trust and loyalty, ensuring long-term stability for LoanCare and our clients. By staying attuned to these key trends and focusing on adaptability, LoanCare's focus on balancing tech- nology advancements, compliance, and borrower support will enable us to navigate the mortgage servicing indus- try's evolving landscape effectively and deliver exceptional results to our clients. Wes Iseley EVP and Senior Managing Director, Carrington Mortgage Holdings LLC Q: How do you envision the mortgage servicing indus- try evolving in 2025? What key trends do you anticipate will shape the landscape? Next year will be highly focused on the consumer, with many compa- nies expanding their customer-facing technology to include AI and chatbots to provide high-quality service lev- els through automation. We believe regulation will still be very strong, with a continued emphasis on consumer accessibility and ease of assistance/res- olution of consumer concerns. The test will be how successful AI is at increas- ing customer satisfaction, or if people become frustrated with it, similar to voice response phone trees. How well they are set up will dictate how good the customer experience is. Additionally, many will be watching to see what kind of regulation regarding AI is adopted. Q: How are you and your or- ganization working to meet those challenges? How has your strategy evolved over the past year? We are testing technology and seeking consumer feedback on changes made to improve our online presence and create a higher ease of use for our customers. We are doing more beta test- ing before releasing enhancements to ensure we're meeting consumer needs and expectations. For AI, we're working on our internal controls and regulations, while testing AI use cases within our organization. We're also continuing to focus on consumer education to build our partnership with our customers because we believe the more mort- gage-savvy a customer is, the happier that customer will be. Q: How are you preparing for potential economic down- turns or fluctuations within the housing market? What strategies are you implementing to mitigate risk? There is a continued shift in the industry as we move away from COVID protections enacted during the pan- demic. This means some retraining of customers because customers seeking assistance with delinquency previous- ly did not experience negative credit reporting and had a larger set of options for resolving delinquency, such as pan- demic-era home retention options and the availability of HAF (Homeowner Assistance Fund) funds at the state level. Some of those retention options are no longer available, and others are less appealing to the customer due to higher interest rates. We have expanded our team member training to [include talking to customers] about their home value and equity if the customer truly can no longer afford the home and none of the retention options are available or ap- pealing to the customer. In some cases, selling the home will be the customer's best option while home prices are still strong. With the housing supply still tight, this should keep home values fairly stable, which means we expect many customers will continue to pay their mortgage ahead of unsecured debt. We again believe customer education is the best way to reduce risk. Home- owners insurance is another big topic, and by encouraging customers to shop the policy and to bundle policies where possible, we can partner with customers to make their homeownership costs as affordable as possible. EXECUTIVE EXPERT