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31 November 2024 November 2024 » C O V E R S T O R Y fundamentally think. People and companies continue to think that what is happening "today" will continue in perpetuity. Humans and companies are flawed in that way. The status quo and recency biases are powerful and usually drive and dominate decision-mak- ing. This ultimately leads to minimal preparedness to absorb any shock or change. However, if you are a mortgage servicer, or any company worth your salt, change is something that you should always be prepared for. It should be expected and embraced, as we do at Servbank. We have it ingrained in our culture and have built our business around that, which positions us to be prepared for any sort of economic downturn. Assuming, as a servicer, that you have a finite amount of financial reserves to weather market fluctuations as you adapt to change or a downturn, then it comes down to the speed at which you can adapt. This goes back to my earlier point about the adoption of technology and AI. The more you have leveraged its capabilities—as we have at Servbank—the more agile you can be. The response and acclimation to any market change can happen in a fraction of the time and at a lower cost than if you were still operating with antiquated technology and a "slow to change" business model. Tech aside, the more proactive you are, the more pre- pared you will be, and that proactivity should run the gambit from operational controls to regulatory compliance to customer outreach—the more proactive you are the better. As an organization, you should regularly be scenario-planning and stress-testing your ship from stem to stern to evaluate the impact of various economic scenarios on the portfolio and business. Make sure you know your gaps, weaknesses, and tolerances. Always be looking to discover your blind spots. And back to the ship analogy, don't be like the crew of the Titanic and operate under the assumption that you can turn the ship quickly enough to avoid an approaching iceberg—or even worse, operate with the hubris that you are "unsinkable." Brent Potter Operations Executive Director Default Servicing, ServiceMac Q: How do you envision the mortgage servicing indus- try evolving in 2025? What key trends do you anticipate will shape the landscape? In 2025, there needs to be a strong focus on technological advances within servicing, maintaining compliance standards, and bringing the entire pic- ture together to improve the customer experience. Simply put, we need to get on board with the technology that is available to us and raise the standard for customer experience. Q: How are you and your or- ganization working to meet those challenges? How has your strategy evolved over the past year? We are working to accelerate the pace of change with clear strategies on when to build the technology internally and when to partner with an expert that has a product available. It's not as simple as one or the other … in today's envi- ronment, we must have a clear vision, strong strategic partners, and the ability to execute together. Q: How are you preparing for potential economic down- turns or fluctuations within the housing market? What strategies are you implementing to mitigate risk? We continue to evaluate our high-risk processes and areas that have historically felt pressure during economic challenges to ensure we have proper automation and controls. Too many times in the past, our industry has waited until a crisis to invest in automation vs. being proactive. We also believe that, in those moments, we need to strike the right balance of self-ser- vice and old-fashioned customer care through conversations. Customers need to have easy access to assistance, but we must not underestimate the impact of a real conversation to understand their individual needs and match them with the right type of product. Gagan Sharma CEO, BSI Financial Services Q: How do you envision the mortgage servicing indus- try evolving in 2025? What key trends do you anticipate will shape the landscape? The servicing industry is set to undergo a transformative shift next year due to a constantly evolving regulatory environment and technological innova- tion. Artificial intelligence (AI) and ma- chine learning, in particular, are rapidly being integrated into mortgage servicing processes and are already revolutioniz- ing how servicers interact with data. At a time of economic uncertainty, AI-powered tools are enabling servicers to predict borrower behavior more accu- rately, assess risks more effectively, and enhance overall operational efficiency. AI algorithms, for instance, can help ser- vicers identify potential defaults before they occur, allowing for more proactive engagement with distressed borrowers. We also anticipate new regulations and investor guidelines involving loss mitigation procedures, especially those involving loan modifications and bor- rower communications. For instance, the CFPB's recent post-pandemic ser- vicing rule, designed to streamline loss mitigation processes and help borrowers avoid foreclosure, will be a significant EXECUTIVE EXPERT EXECUTIVE EXPERT