Residential Magazine

Missed Payments Can Haunt Borrowers

Advocate for technology to help clients pay their mortgages on time

By Jill Bohlken

Millions of homeowners have missed mortgage payments in the past year. In fact, according to a recent bill payment study, nearly one in five homeowners (19%) admit to paying their mortgage late. Alarmingly, 10% of homeowners say they frequently or always pay their mortgage late.

This is a problem for mortgage originators, who must sometimes deny home loan requests due to late mortgage payments. Did you know that when the mortgage payment process is improved, originators and servicers see an increase in on-time payments, which helps their clients maintain eligibility for future home loans should they need to move or want to upgrade their home?
The bill payment study conducted by PayNearMe surveyed 2,676 people online in April 2021 and found that for 70% of consumers, an inconvenient payment experience — not money issues — is largely to blame for late bill payments. When asked what makes bill payment difficult, consumers noted the following reasons:
• Remembering logins, passwords and account numbers (52% of responses).
• Keeping track of payment due dates (41%).
• Having to manually enter payment information (26%).
Mortgage lenders and originators should consider ways to ease the path for borrowers in repaying their loans. Originators and servicers can reduce late mortgage payments by addressing the following three payment-experience problems.

Automatic reminders

Consumers need help managing their bill payments. In fact, more than one in five adults gave themselves either a poor (D) or failing (F) grade when it came to remembering bill due dates, according to the study.
Automatic bill payment reminders help to solve this problem — and they can do much more than just alert homeowners to when a mortgage payment is due. With the right payment platform, automated payment reminders can be delivered at predetermined points in the billing cycle, such as two weeks before the due date, two days prior to the due date and one day past the due date. These messages can be highly segmented based on each homeowner’s previous payment behavior, so those with a history of late payments get more reminders or more urgently worded reminders.
Modern bill payment reminders also can incorporate ways for homeowners to easily make their mortgage payment when and where they want. Nearly 30% of survey respondents say that the ability to use different payment types each billing cycle would make it easier to pay bills on time. This means, for example, being able to pay via debit card one month, via Google Pay the next month and in cash the next. Meeting homeowner expectations for convenient, flexible payments is key.

Easier logins

More than half of consumers (52%) reported that having to remember logins, passwords and account numbers is a problem that impacts their ability to make timely bill payments. It’s time to take note.
Savvy mortgage servicers are building personalized QR codes into hard-copy loan statements to solve the login problem. QR codes coupled with smart-link technology enables consumers with paper bills to scan the QR code with their smartphone and pay online with their preferred tender type — without needing to sign up, log in, or enter an account number or payment information.
For cash payments, paper statements also can be printed with personalized barcodes that allow homeowners to pay their bills with cash at retailers they often shop at — such as 7-Eleven or Walmart. The homeowner simply visits a participating store, has the cashier scan the barcode and pays their bill with cash.
Payment reminders — embedded with personalized smart links — also can address the login problem. When you embed a customized smart link in messages, homeowners are taken directly to their payment screen to complete the mortgage payment in as few as two taps on their mobile device.
This technology allows homeowners to pay their mortgage right from their phone or computer with their preferred payment type — whether that be debit card, an automated clearinghouse electronic transaction, or mobile methods such as Apple Pay and Google Pay. They no longer need to mail checks, call a customer service agent to pay over the phone, visit a brick-and-mortar location to pay in person, or login into a website to pay online.

Mobile payments

More than one in four of those surveyed (26%) said that having to manually enter payment information is a problem when paying bills. Giving homeowners the option to store their recurring mortgage bill in a digital wallet can help to solve this problem.
Mobile-friendly payment choices such as Apple Pay or Google Pay make it easy for homeowners to make payments with a biometrically secured tap of the phone. There is no need to manually enter payment details or other personal information. The demand for mobile-friendly payment types is growing rapidly, especially among younger consumers. Among the 18-to-44 age group, 48% of those surveyed were likely or very likely to use Apple Pay or Google Pay to pay their bill, with 40% saying that it’s important or very important to have this option.
Looking toward the future, 30% of respondents said it would be easier to pay bills if they could do so via Venmo or PayPal. When homeowners store their bill in a digital wallet, they can quickly and easily view their mortgage statements whenever needed, and push notifications will remind them when their mortgage payment is due.
According to the study, if given the opportunity, 42% of consumers would be likely or very likely to use their digital wallet to store, view and pay their bills from a single place. With this in mind, mortgage originators and servicers should look for a payment platform that makes it easy for homeowners to add their mortgage bill to their digital wallet.
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Considering that people typically buy more than one home during their lifetime, it’s in the best interests of mortgage originators and servicers to begin fixing late-payment problems. This starts with implementing the right payment platform.
Look for a technology platform that enables users to implement smart bill payment reminders, leverages QR codes to guide homeowners to electronic payments, and gives homeowners the option to store their mortgage bill in a digital wallet. The easier the bill payment process is, the more likely that homeowners will pay their bills on time, every time. ●


  • Jill Bohlken

    Jill Bohlken is mortgage strategic lead at PayNearMe, which partners with lenders and mortgage servicers to help automate the payment and collections processes while increasing client satisfaction by allowing borrowers to pay how, when and where they want. Bohlken has more than 20 years of experience in mortgage servicing with a focus on solving problems within the payment-processing space and driving up self-serve transactions while driving down operating costs.

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