Without innovation, it’s impossible for mortgage servicers to quickly respond and successfully navigate major disruptions in the mortgage marketplace. At LoanCare, a great deal of our innovation has been driven by technology. From a digital first approach to customer experience and service automation to an expansion into data-driven retention capabilities and analytical insights, we believe technology translates into a top performing loan subservicer. We invest in product innovation to extend our value to the homeowners and clients we serve, as well as advance the industry as a whole. Why is this important?
The pandemic challenged the mortgage industry.
Consumer demand for mortgages in the US skyrocketed due to a surge in home buying during the COVID-19 pandemic. More efficient technology and a rise in new kinds of lenders were among the trends creating opportunities as a result. As stated in this article from McKinsey, The US mortgage-subservicing market is likely to continue witnessing double-digit annual growth over the next two to three years, driven by two trends:
- New lenders and owners of mortgage-servicing rights (for example, nonqualified mortgage, or non-QM, lenders; digital attackers; and private investors) that are entering the industry may lack internal servicing capabilities and will consider outsourcing to retain mortgage-servicing rights.
- The market is experiencing a greater shift from in-house servicing to outsourcing, propelled by higher regulatory scrutiny and the challenge of default servicing (which can cost five times as much as servicing a performing loan and requires niche expertise). Moreover, the capital-intensive nature of the servicing business often acts as a deterrent—particularly for traditional servicers and smaller players—to invest in modernization and digitization.
As a result, digital-first subservicers have gained traction over the past two years for their ability to use technology and behavioral science to increase efficiency, improve the client and homeowner experience, boost retention, and strengthen compliance. A well-built digital journey helps mortgage borrowers access account information when they need it, make payments accurately, educate themselves on financial and regulatory issues, and communicate seamlessly with their servicer. We expect the market share for digital-first subservicers to continue to grow.
For LoanCare clients, this means we leverage our data capabilities to keep pulse on their portfolio performance while expanding value through innovation. Areas of focus include enhanced analytics, benchmarking and loan level insights to identify risk and opportunity faster. Behavioral data and workflow automation to deliver of relevant information and offers to borrowers at the right time and place.
Contact us for more information about LoanCare innovation.