Technology is certainly changing the playing field when it comes to the mortgage industry. From an origination perspective, the digital revolution has accelerated the use of data in streamlining the application process for the borrower.
There’s another area of the business where technology will soon have a widespread impact. According to Jennifer Henry, vice president and vertical marketing leader for mortgage services at Equifax, that area is loan servicing.
“I think of it in two different buckets, right?” Henry said. “I think of it in the origination process, and I also think about the reimagining of the servicing space and how that is becoming the next area of focus for the digital revolution.” Henry spoke to Scotsman Guide about how she views this shift and what role the credit-reporting agencies will play in it.
How will emerging technology affect servicing?
There has been a big push for reimagining servicing across the board. Until recently, [for] loans that were under servicing, basically you would get electronic statements about what your payments were, you would get escrow statements on a regular basis, and everything was done via fax or via e-mail or phone calls. But servicers are, for a number of reasons, pushing for a more digital process.
What does this increased digital process look like?
A lot of servicers are providing self-serve tools to borrowers, to be able to either via mobile phone or via internet, get insights into their loan. What is their payoff [amount]? Can they request a [mortgage insurance] cancellation? Or other critical things that happen in servicing — report financial distress, request a loan modification. Those things are starting to move to a more digital, electronic process.
For multiple reasons, it’s beneficial to the borrower because they have ready access and feel like it’s not a black box, but it also helps with overall satisfaction and helps with portfolio retention if a customer does a refinance or purchases another home.
What role does Equifax and the other credit bureaus play in this?
We play a number of roles. We provide access to customer insights that fuel the digital mortgage process and not just the digital mortgage process, but any mortgage process. … When it comes to portfolio management and helping with the servicers, there’s all kinds of portfolio-management tools and triggers that we can offer to help them better manage their portfolio, and to provide data to help them provide insights to their borrowers, and to make decisions on the loans that are in their servicing portfolio.
What are these insights?
We have lifestyle, life-event triggers. We have predictive analytics that help determine if there would be a prepayment — like propensity models, propensity to refi, event-based data. We have products like active-listing scan that help a servicer determine if somebody’s property is listed, so they have the ability to readily market to them and try to retain them as a customer.
We have products that are available for loan modification, so all of the products around property-condition reports and the traditional credit verification for underwriting are all available there. I think, in each phase of servicing, there’s a pretty deep breadth of data that is available to assess, both on the origination and the servicing side.
Income and employment histories are two of the most time-consuming things for originators and mortgage companies to determine, correct?
They’re super time-consuming and they’re also areas where there is a lot of risk. Being able to provide access to data directly from the employers or from the payroll providers, as opposed to getting it from the borrower, reduces risk and reduces fraud. Both the time savings and the fraud reduction are important there.
What else should mortgage originators know?
I think that mortgage originators should know [that] wherever you are in your digital mortgage journey is OK, right? Some lenders are really far down the path. Some are just exploring. I think, wherever they are, we will meet them there, and will help them provide the best products and services for wherever they are on the process.
The other critically important thing to know is that these technologies and data products that are enabling the digital mortgage process are not plug and play. When you’re going ahead and you’re implementing these tools, it’s really important to think through operations, operational efficiency and changing your processes to take full advantage of the efficiencies that are gained.