Lenders Should Service Customers Rather than Loans

Top officials with the Mortgage Bankers Association of America believe that lenders can improve cross-sales and customer retention by placing a higher emphasis on service quality.

Speaking at the MBA's servicing conference here, Martin Foster, a senior vice president at Cendant Mortgage who chairs the MBA's loan administration committee, urged lenders to focus energy on keeping consumers happy.

"A major goal of all of us should be to improve the customer experience," he said.

To do that, lenders need experienced servicing staff who can manage not only payment processing, but also the myriad of regulatory and legal concerns that arise in servicing loans.

Toward that end, servicers need to emphasize retention - as in employee retention. While most of the publicity in recent years has focused on retaining borrowers during a refinancing boom, Mr. Foster urged lenders to make employee retention a key goal as well in order not to lose valuable institutional and business know-how.

John Courson, chairman of the MBA as well as president and CEO of Central Pacific Mortgage Co., said lenders are leaving cross-selling opportunities on the table when they treat servicing loans like an assembly line operation.

"What you do should be seen as servicing customers or human beings" rather than loans, he said.

Marketing products such as credit cards and insurance products to existing customers is one way servicers can boost their company's profitability, he said. Mr. Courson noted that servicers are often in a battle with loan originators to claim "ownership" of the customer.

Because mortgage servicers have typically the longest running relationship with the consumer and a wealth of data about their customers, they are uniquely well positioned to capitalize on that advantage.

But too often, lenders are not doing enough to use this natural advantage. Servicers should strive to increase their "market share" of the consumer's business, he said.

"You have the opportunity to be the focal point of the success and profitability of your company," he told loan administration professionals gathered at the conference.

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