Editor's note: This piece originally appeared in the August 2020 edition of DS News, now available.
Raman Muralidharan, EVP and Head of Mortgage, HSBC has been with the bank for more than 16 years, has been Head of Mortgage for the past five years.
As the head of mortgage, he’s responsible for the entire mortgage profit and loss, including sales, underwriting, fulfillment, servicing, and collections. At HSBC, he was previously the Head of Customer Value Management, Head of Intelligence and Chief Marketing Officer and Consumer in Mortgage Lending.
Muralidharan spoke with DS News on how mortgage originators may reevaluate business operations. And how servicers can assist homeowners leaving forbearance plans.
What can mortgage servicers do to assist homeowners exiting forbearance plans?
We had numerous customers who called and asked for forbearance and we had a little bit of head start in helping them in the sense that us, like many others in the industry, already had forbearance programs in place, which we’d used before for natural disasters. We were able to take those programs, adapt them to the requirements of the CARES Act, and other things that are COVID specific, and really begin to use them. Working with our sub-servicer, we were able to field all customer calls, inquiries, whether they came in via mail, via call, digitally via the web, and we were able to make it easy for our customers to contact us and request forbearance. Customers who requested forbearance got it with no questions asked.
Our average answer times were within 10 to 20 seconds. Our abandonment rates
were two to 3%, so we did a lot better than the rest of our industry in helping people request forbearance, and we continue to do that. Now that we have the first set of people who request forbearance in March, coming to a 90-day point, where we’re checking in with them and seeing what next? We’re contacting these customers and having conversations with every one of them to figure out what is the best option for the customer. We work through this one customer at a time making sure that we’re offering the customer all the options that are appropriate for them.
With some customers, it’s very appropriate to come out of forbearance and resume making payments. About 31% of our customers, who are on forbearance, have already been making, at least, one payment through the forbearance period. Many of them maybe ready to come out of forbearance and catch up. And that’s great, we’ll help them do that. For those who want to catch up, but do that over a period of a few months, say six to 12 months, over a repayment plan, that lets them do so.
For others, people who want to extend their forbearance, the CARES Act allows you to extend your forbearance for a full year, and we’ll make that option available.
For people who want a different treatment, like maybe extending the missed payments out, as a balloon, to the end of the loan, that’s available. That’s available in a very streamlined way, with very limited or no documentation.
There are other modification treatments like term extension, principle reduction, interest rate reduction, which all can be discussed on a case-by-case basis. And, again, our ability as a portfolio lender, who keeps our loans on our balance sheets, it just gives us a lot more flexibility to work with borrowers and find a way to always keep them in their home and do what’s right for them.
How could COVID-19 cause mortgage originators to reevaluate business operations?
We’ve been facing some unique challenges across the mortgage industry. As interest rates have come down, a lot of customers have looked to the industry to help us help them in this time, and lower payments by refinancing their mortgage. We’ve had a lot of volume but a lot of the things we do to serve that volume have gotten more complicated during the lockdown. It’s been harder to do appraisals. County offices have closed. Title searches have become more difficult. So, we’re trying to deal with both record volumes and difficulties in operations. A lot of us are working from home. So how do we make all that work?
We needed to adapt and at HSBC, we’ve been able to do that very well. A lot of things have helped us. First, we’re largely a portfolio lender, which means we keep the loans we make, for the most part, on our balance sheet. And then we service them ourselves. We have a lot of flexibility in deciding how we originate and how we continue to serve our customers well through difficult times. We have flexibility on where we could, for example, use an alternative appraisal method—like a desktop appraisal. That has really helped us in being able to keep more of our loans on our books, and be more flexible, and be more nimble go forward.
We’ve also had a focus on international mortgages, and we work with borrowers from all over the world. We’ve always been prepared, and had the infrastructure in place, to work with borrowers remotely, people who can’t meet with us face-to-face. All of that work, which we’ve done in building up our digital infrastructure, and letting borrowers interact with us digitally through a point of sales system, the one we have is Roostify, and through automated underwriting, et cetera, has really helped us transition very seamlessly into a remote work, work from home, environment.
I think that has all helped us really deal with record volumes. I’m really pleased to say that, not only have we had record origination volumes through the past few months, we’ve also delivered a great customer experience. Our net promoter score, which is the method by which we measure customer experience, is at all time high levels. It’s over 60 for the month of May, and anything over 60 is considered world class. In June our NPS increased further to 70. The mortgage industry average is about a 38, so this has worked well for us, and I’m glad we’ve been able to help our customers at a time where they really needed help in lowering their payments.