WE’RE HEARING...One thing's for sure: a mortgage servicing business that used to be all about sending out bills and then slitting open envelopes or electronically receiving money is a business of the past.
Today, it’s much more about that relationship with the consumer. In fact, if you really want to think about it, the CRM that the mortgage industry has never really gotten its collective mind around and rarely implemented effectively may not start in the origination shops—but may need to start in the servicing shop with SPOC being just the first step in that direction.
Some may think that building customer relationships into the servicing industry instead of the origination channel is the tail wagging the dog. However, there is some logic to this. Some of today’s servicers are already better at loan modifications (which is the re-origination of a mortgage) than loan originators are at producing a new loan.
And the servicers sure seem to have all the leads (current customers) other than first-time homebuyers, who no one seems to want to lend to anyway.
So, how does the servicer become an originator and not just a re-originator? After all, this is not what these organizations were founded to do and when you have millions of loans in the portfolio, you don’t just turn your boat around and become a loan origination business. And yet, this seems to be where the market may be heading.
I am attending the MBA servicing conference next week in Dallas and look forward to tracking the changes in the business.
A few years ago the conference was littered with overwhelmed executives whose business model was beginning to unravel under the onslaught of late payments and increased demand for loss mitigation. Then came the dreaded “robo-year,” then later it was all about HAMP, and then last year was the year of the short sale. What will this year bring?
I am actually speaking on a panel regarding Change Management, which seems very appropriate since the servicing industry sure is experiencing a lot of change.
According to the MBA’s write-up about the session, “A formal change management strategy is a proven communication process. It allows a company to socialize their change efforts across the enterprise to ensure everyone involved has a voice.”
Of course, the challenge of change management is that sometimes the voices are screaming while other times they are too muted and not heard. One of the points I will make next week is that too infrequently the VOICE of the customer is never heard. Note—when I say customer, I mean the consumer.
I mean that human being that actually makes the payments. Not the investor who demands the ways in which you collect the payments (or even worse, the process you have to follow when the collection effort goes awry).
Much of what this conference will focus on, according to the agenda, will be the CFPB and the new rules coming out of the bureau that will impact servicers in the future. I think we should all take note that the new cop on the beat has a name that is actually descriptive—it starts with consumer!
So, what will the servicers do now? Well, that’s what I’m going to the show to find out. I’ll visit with the people who show up and report back to you in this space. And if you happen to be in Dallas for the show, look me up. My email is Garth.Graham@stratmorgroup.com.
And don’t miss my session. It’s going to be interesting!
Garth Graham is a partner with Stratmor Group, and has over 25 years of mortgage experience, from Fortune 500 companies to startups, including management of two of the most successful mortgage e-commerce platforms. He was formerly with Chase Manhattan Mortgage and ABN Amro, where he was a senior executive during the sale of its mortgage group to Citigroup.