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Unexplored Territory

This piece originally appeared in the August 2022 edition of DS News magazine, online now.

The default servicing industry and mortgage marketplace overall has been through some changes over the past 24-months-plus. On March 11, 2020, the World Health Organization (WHO) declared the novel coronavirus (COVID-19) outbreak a global pandemic. It was at this time when WHO Director-General Dr. Tedros Adhanom Ghebreyesus noted that, over the previous two weeks, the number of cases of COVID-19 outside of China had increased 13-fold, and the number of countries with cases increased threefold.

The hustle and bustle of everyday life came to an abrupt halt, as we began the advent of the era of social distancing, and it appeared that life as everyone had known it, changed for the foreseeable future.

The ripple effect felt by the housing finance market was just as jarring, as a once-flourishing U.S. economic landscape was jolted, with businesses shuttering and industry and its customers entering unexplored territory.

According to the Consumer Financial Protection Bureau (CFPB), since the beginning of the pandemic, the number of borrowers behind on their mortgage increased to a level not seen since the height of the Great Recession in 2010.

The government acted swiftly, working with the industry to enact policies and programs designed to help keep Americans in their homes. Just 16 days after the WHO declared COVID-19 a pandemic, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a $2.2 trillion economic stimulus bill was signed into law by President Donald Trump. Homeowners nationwide impacted by the loss of income benefitted via $300 billion in one-time cash payments to individuals who submitted a tax return, with most single adults receiving $1,200 and families with children receiving more; $260 billion in increased unemployment benefits; and the establishment of the Paycheck Protection Program (PPP) that provided forgivable loans to small businesses with an initial $350 billion in funding.

Sections 4022 and 4023 of the CARES Act involved mortgages, protecting those with federally-backed mortgages from foreclosure until at least August 31, 2020, and allowing the right to request a forbearance for up to 180 days. Section 4024(b) of the CARES Act provides for a 120-day moratorium (beginning on the day the Act was signed, March 27, on eviction filings for rental units in properties that participate in federal assistance programs, or have a federally backed mortgage or multifamily mortgage loan.

In the CFPB's "Characteristics of Mortgage Borrowers During the COVID-19 Pandemic” report released in May of 2021, it was found that, despite protections being equal for all under the CARES Act, experiences differed substantially by race, with roughly 3.7% of white borrowers in some stage of forbearance, and 0.5% deemed delinquent. The same CFPB analysis found that Black and Hispanic borrowers were much more likely to experience either of these outcomes, with Black borrowers 2.5-times more likely to end up in forbearance (9.2%) and two times more likely to end up delinquent (1.0%) compared to white borrowers. Hispanics were 2.3-times more likely to end up in forbearance (8.4%), and nearly 1.5-times more likely to end up delinquent (0.7%). Other-race borrowers were also more likely to experience forbearance compared to whites, but were less likely to end up delinquent.

As variants of COVID-19 began to emerge, the proverbial “light at the end of the tunnel” grew more and more distant, but the industry again jumped into action and worked hand-in-hand with the government to ensure Americans remained in their homes during this unprecedented time. The Federal Housing Administration (FHA) issued Mortgagee Letter 2021-15, Freddie Mac issued Bulletin 2021-23, and Fannie Mae updated Lender Letter 2021-02, all of which extended the previously announced foreclosure moratoriums through July 31, 2021.

As programs geared to assist borrowers during the pandemic began to wind down, the current housing situation could be best described as challenging for many.

First-time buyers are still challenged by record-high prices, as Redfin reported that the median sale price for U.S. homes during the four weeks ending July 10 was up 12% year-over-year at $393,449, down just 0.7% from its record-breaking June peak.

The U.S. Consumer Price Index (CPI) found the annual inflation rate accelerated to 9.1% in June 2022, up from May’s reported rate of 8.6%—marking the highest rate recorded since November of 1981.

The National Association of Home Builders (NAHB) reports that volatility in the lumber market since April 2020, has sent builder confidence into a tailspin, as softwood lumber prices have increased enough to add $14,345 to the price of an average new single-family home, and $5,511 to the market value of an average new multifamily home, as builder confidence dipped for the seventh straight month.

DS News recently had the opportunity to chat with a cross-section of the industry to gauge the current state of the marketplace. And while “uncertainty” remains the theme of the day, lessons learned over the past 24-plus months since the outset of the pandemic are proving valuable as the market chases a state of correction. From servicers to subservicers, to tech providers and credit unions, all were impacted and here are their insights.

Jim Albertelli, CEO, Voxtur
Responsible for the overall vision and direction of Voxtur, Jim Albertelli has more than 25 years’ experience in the real estate and technology sectors, having developed multiple technology platforms that support real estate investors and servicers.

Voxtur offers targeted data analytics to simplify tax solutions, property valuation, and settlement services throughout the lending lifecycle, for investors, lenders, government agencies, and servicers.

As the pandemic set in, the industry increasingly embraced tech operations, whether it be for social distancing reasons, streamlining ops, or just staying in touch with team members, and Albertelli noted that Voxtur saw many other advantages of tech throughout.

"I think underwriters having digital certainty around the income and assets and employment and having digital certainty around a particular property is going to make their job less risky, and more efficient,” Albertelli said. “I think that will turn into a reduction of costs for consumers and originators, and ultimately, investors as well. I see this new digital world transforming itself, and I see the Biden administration, the FHFA, GSEs, and regulators supporting change now, which is great to see. I see the GSEs embracing the change.”

Albertelli and the Voxtur team analyzed the events of the pandemic, saw some gaps in workflow, and developed methods to simplify and smooth out these processes to get through the present and future industry turning points should they arise.

“The lenders, large banks, and large independent mortgage banks will survive,” Albertelli said. “They will engage vendors like Voxtur to continue to reduce costs. Right now, you have got remote online notarization, e-recording, alternative title insurance—efficiency gains all throughout the process. I could certainly see that future. We will continue to work in the ecosystem to continue to innovate and continue to try to reduce closing costs, while increasing home affordability and transparency. I think the firms that align themselves with those goals are going to be successful long-term.”

Sheila Bair, Author, Corporate Director and Former Chair of the Federal Deposit Insurance Corporation
Sheila Bair has enjoyed a long and distinguished career in government, academia, and finance. From 2006-2011, Bair was Chair of the Federal Deposit Insurance Corporation (FDIC), steering the agency through one of the worst financial crises since the Great Depression. She is a frequent commentator and op-ed contributor on financial regulation and the student debt crisis, as well as author of the New York Times best-seller Bull by the Horns, her 2012 memoir of the financial crisis.

Bair currently serves on several corporate governing boards, including Bunge Ltd., as Deputy Chair and Chair of the Corporate Governance and Nominations Committee, and Lion Electric, and formerly was the first woman Chair with Fannie Mae.

On a recent episode of the SitusAMC podcast On the Hill—hosted by Tim Rood, Head of Government and Industry Relations for SitusAMC—Bair, along with former government officials, discussed the housing and mortgage markets through a D.C. lens to help understand issues of the past, current, and future.

Despite many accumulating wealth during the pandemic, is now the time for first-time and prospective buyers to enter the market? Is this the right time to expand access to mortgage credit and/or provide financial incentives like down payment assistance reduce credit risk. Here’s what Bair had to say:

“We're probably going to be facing a recession in the next six to 12 months and could very well be facing a significant housing market correction, which may have some silver linings in terms of at least making housing more affordable again,” Bair said. “But to be encouraging someone who has never owned a home before for whom the payment may be a bit of a stretch ... to bring them into this ecosystem right now with those kinds of conditions, they may not have that kind of background and experience to understand how perilous conditions are and what their risks might be with a mortgage six months from now that might have an adjustable rate where the home price may well have gone down. They may have lost their job in a recession. There is a lot of risk ahead for the lower- and middle-income segment of our population.”

Ryan Bolden, VP of Default Servicing, PennyMac Loan Services LLC
Founded in 2008, PennyMac is a specialty financial services firm focused on the production and servicing of mortgage loans and the management of investments related to the U.S. mortgage market. Ryan Bolden currently serves as VP of Default Servicing for PennyMac. For the 12-month period that ended March 31, 2022, PennyMac production of newly originated loans totaled $201 billion in unpaid principal balance (UPB). In that same period, PennyMac serviced loans totaling $519 billion in UPB, making it a top 10 mortgage servicer in the nation.

"As a servicer, when it comes to our customers, what we're really looking at is to resolve delinquencies, as our active COVID forbearance numbers continue to drop because they reached their max capacity and they're expiring,” said Bolden of PennyMac’s customer connection. “We're looking to provide options that are unprecedented pre-COVID, and now have some improved and streamlined modification options that don't require full underwriting. It really comes down to solicitation and marketing, and ultimately, educating customers on the options available now that they may not have been privy to before COVID.”

Working with borrowers to come to an amicable resolution is key to all servicers, but the advances made by PennyMac during the pandemic have opened new inroads of communication for borrowers.

“We've actually set up a portal where customers can go online and check in, so it doesn't necessarily have to just be a customer call-in,” Bolden explained. “Those avenues help the customers with that, but I think we've seen much more responsiveness for the customers, especially after January of this year.”

And addressing borrowers who need options to stay in their home, servicers can sometimes find themselves in a game of cat-and-mouse to even get their customers on the phone, but it is the hope that additional servicer options are key in opening the lines of communication.

“I will say that there's more educational avenues, and luckily enough, in our modification and our Homeowner Assistance Fund (HAF) space, we've had tenured staff,” Bolden noted. “We've been able to transition from our prior hardest hit funds over to HAFs. At PennyMac, we have a proprietary system that alerts everyone in the company that there's an active HAF on file. What we are doing is when we send out a decline letter, as opposed just putting a blurb on a decline letter that says, ‘you also may qualify for this,’ we are sending out a separate HAF flyer. That is driving more engagement back as well. We just began that recently, so it's hard to gauge what the market penetration rate is on that, but we've certainly seen an increase in responsiveness.”

Angela Hurst, EVP/Chief Administrative Officer for RES.NET
Rida Sharaf, Chief Strategy Officer for USRES
Real estate software provider RES.NET offers a technology suite for servicers, investors, lenders, and hedge funds. Angela Hurst serves as EVP and Chief Administrative Officer for RES.NET, while Rida Sharaf is currently the Chief Strategy Officer for USRES, a provider of appraisals, BPOs, rental analysis, and REO disposition services.

“With each wave, our challenges have also gone through phases, each characterized by different needs and requirements,” said Hurst of the hurdles faced by her firm over the past two years. “The impact on our vendor partners and customers varies across the nation, and predicting them has been challenging. We focus a tremendous amount on our customers' operational needs, because each of them has unique challenges, and we at RES.NET have adapted to the fluid changes by focusing on their needs.”

As we focus on the future, learning from these experiences will only build a stronger and better foundation in handling crisis situations moving forward.

“What happened in 2020 and referencing 'new normals' should be behind us, and as an industry, for the collective good, we are transitioning toward the 'next normal,’" Sharaf noted. “Having learned from the challenges experienced, we can build on this experience and prepare for future disruptions.”

Jason Kwasny, EVP of Servicing, The Money Source
Jason Kwasny serves as EVP of Servicing for The Money Source (TMS), a full-scope mortgage servicer, servicing loans it owns through previous origination or through purchase acquisition, as well as subservicing loans for over 60 clients through the TMS brand and private labeling servicing (PLS).

TMS’ current portfolio stands at 400,000 loans serviced, with more than half of those loans being subserviced for its clients.

“The biggest challenge that TMS has been faced with recently is all the movement from our clients’ portfolios,” Kwasny noted. “In 2020-2021, there was basically only inflow of new originations. In today’s environment, many of our clients have been challenged in consistently providing new flow through new originations and have been forced to sell MSRs to free up liquidity. While we continue to see consistent transfers in from new client partnerships, there has also been a heavy mix of deboards to other servicers due to MSR sales. We have responded by strengthening our loan transfers team with high-quality and experienced personnel while enhancing our processes and procedures so that we can provide a seamless transfer experience for customers. Even though these customers are leaving TMS, not by choice, we are committed to still delivering a leading customer experience through proactive communication and ensuring that all back-end data is accurate and timely provided to the new servicers.”

Despite the challenges faced by Kwasny and the TMS team, continued partnerships with federal and regulatory bodies remain paramount to both customer and servicer success moving forward.

“What lies ahead at a macro level for the industry is anyone’s guess, but it is almost certain we will see a prolonged slowdown in new originations, and a contraction and consolidation in both the originations and servicing spaces,” Kwasny said. “We also know that coming off COVID-19, at a time when many homeowners struggled with making on-time payments due to COVID-19 impacts, there is strict scrutiny from regulators as they look to make sure customers were treated fairly and offered the protections afforded to them under the CARES Act and related agency guidance. Regulators such as the CFPB and their state counterparts are digging in deep in the name of consumer protection. We can expect to see greater scrutiny from our regulators, more enforcement actions, and a renewed focus on compliance, much like we did after the last financial crisis.”

Chris Lewis, Director of Enterprise Solutions, DocMagic Inc.
Chris Lewis, as Director of Enterprise Solutions for DocMagic, focuses on helping lending organizations of all types digitize their mortgage origination, closing, secondary, and servicing processes when it comes to going “e.” DocMagic is a provider of mortgage-based compliance, document generation and mortgage digitization solutions, including eSign, eDelivery, eNotary (RON), eNote, and eVault solutions.

“With the industry truly going digital and eNotes being leveraged on a wider scale, servicers must have an eVault solution to service those notes registered electronically with MERS. This is where DocMagic is having a lot of success,” Lewis said. “The bigger challenge for servicers to overcome relates to the changes in operational workflow when using eNotes. The eNote is much more efficient, but has a completely new workflow as compared with the paper note. Custodial practices will change, and the large-scale physical shipping, loading, and management of paper notes will be eliminated. Since excising paper note management process doesn’t correlate over to the new eNote digital workflow, for the largest servicers, this new workflow can take some time to implement at scale. However, once completed, the ROI and risk mitigation effects are substantial. The eNote cannot get misplaced or destroyed and requires significantly fewer resources to manage over the life of the loan.”

As for what the future holds, Lewis notes that continued usage of tech enhancements such as remote online notarizations (RONs) will further advance the industry toward an all-digital process. Further supporting Lewis’ sentiment, the U.S. House of Representatives recently passed bipartisan legislation, HR 3962—the Securing and Enabling Commerce Using Remote Electronic (SECURE) Notarization Act, designed to update and modernize the notarization process in and outside of the United States. HR 3962 will allow every notary in the U.S. to perform RONs, as well as allow signers located outside of the U.S. to securely notarize documents.

“As eNotes continue to be adopted by some of DocMagic’s largest clients, the next level of eClosing will be a complete RON closing,” added Lewis. “DocMagic is confident that, in the coming years, RON eClosings will be the common closing practice of the most successful and largest originators. Consumers will come to demand the efficiency and safety of the remote closing. We believe Federal Law will pass, allowing for 50 state RON acceptance along with full adoption of the nation’s title insurance underwriters, as well as full adoption at the county recorder level. Lenders that are working today to include the eNote in their process and replace the paper custodial workflow with a digital experience will be the ones who are ready to take RON eClosing to full scale. When lenders, services, investors, and warehouse banks all start utilizing eNotes, the industry will achieve significant operational optimization. It will take time, but it’s on the horizon.”

Michael Merritt, SVP, Mortgage Default Servicing, BOK Financial
Michael Merritt is the SVP of Mortgage Default Servicing for BOK Financial, a $47 billion regional financial services company headquartered in Tulsa, Oklahoma, with more than $101 billion in assets under management and administration. Merritt discussed lessons that both he learned personally, and his company have gleaned over the past few years.

“I think everyone always talks about their people being their strength, and COVID-19 showed that we have great employees that care about their job and care about helping customers,” Merritt said. “To me, these past few years have really shown that if you want to be effective, you must have a good team. You must set them up for success, whether it's providing the right technology, or the right work arrangement. When you do those things, you're going to be successful, and when you're successful, you want to help customers. You have better conversations and better outcomes with the customer to preserve homeownership, which is exactly what we strive to do.”

In terms of challenges, Merritt points out that staffing the company with knowledgeable professionals was an issue.

“I think for everybody right now, it's a challenge to hire experienced people,” Merritt said. “During COVID, volume went down, loans go on moratorium, so your foreclosure staff is slower. But your loss mitigation staff and collection and call center staff are as busy as they can be. We were fortunate to be able to cross-train groups and redeploy them to be able to help customers where needed. Even within foreclosure spaces, as the moratoriums ended, we were able to take the people that were at the end of the process, help with pre-foreclosure, and then move them back into their traditional roles. To me, it has really shown just how flexible our employees can be when shown the mission.”

Natalie Mullen, Mortgage Market Leader, Jornaya
Natalie Mullen of Jornaya presents a unique perspective on the state of the industry over the period of the pandemic. As Mortgage Market Leader for Jornaya, Mullen helps customers adapt their marketing and lead buys in real-time, based on consumers’ online shopping behavior.

“Making major purchases—like buying a house and securing a mortgage—can be hard,” Mullen said. “Abundant choices and endless marketing outreach leave consumers confused and frustrated, and they begin to tune out. Our products and solutions help businesses deliver the right message, at the right time, to the right person. Consumer behavior within our industry has changed, and our marketing behaviors must evolve as well. Technology can enhance a mortgage lender’s ability to help consumers make informed financial decisions and achieve the dream of homeownership. Mortgage originators can grow substantially if they are able to organize, segment, tailor, and deploy data and technology to smartly engage prospective clients with salient information at optimal times during their homebuying journey.”

While the effects of the pandemic may be lasting on the mortgage marketplace, Mullen found that the millennial market has emerged as targets for lenders for years to come and discussed techniques to remain engaged with this segment.

“For lenders, millennials are the consumers to watch in 2022,” said Mullen. “With the trend of younger Americans purchasing expensive homes and mixed households is set to continue, lenders should recognize the untapped opportunity to serve this group as they enter a phase filled with major life purchases, and how to create valuable long-term customers within this demographic. Overall, behavior-based data will rise in value for marketers.

Keeping preferences and permissions in mind, mortgage marketers can know and use static, personal information in how they respond to digital consumer events, like form submissions, sign-ups, page views, and more metrics.”

Tim Rood, Head of Government & Industry Relations, SitusAMC
SitusAMC is a leader in the securitization/due diligence space, on the forefront of innovation of its products and services to address the pain points across the mortgage continuum. In addition to hosting the company’s podcast, Tim Rood is Head of Government & Industry Relations for SitusAMC. Rood commented on some of the challenges he is seeing in the industry.

“A major challenge for me and the industry writ large is that the process for rulemaking is terribly broken,” Rood said. “The Constitution vests ‘all legislative authority’—the power to make laws and legally bind people—to Congress and Congress alone. Once a law is passed, the relevant federal agencies create detailed regulations through rulemaking. The ideological polarization that we are currently dealing with means that the political parties agree less and less on policy—so it can be harder to get things done where compromise is required—and fewer laws get passed ever administration. The legislative breakdown forces a workaround for rulemaking.”

While some rules and regulations seek input from the industry prior to crafting, Rood notes that some rely on “unconventional methods” to educate themselves on targeted issues.

“When regulators lack guiding and binding legislation for them to follow when developing and promulgating rules they rely on a host of unconventional methods, e.g. executive orders, blog posts, speeches, RFIs, APMs, MLs, notices, etc.,” Rood said. “Regulators from different agencies start to develop rules that fit the current administration goals and priorities versus binding legislation. The lack of legislative criterion can result in contradictory rules from different agencies that often work at cross-purposes with one another. The challenge for me and the industry is that, number one, it is incredibly difficult to reconcile and operationalize rules developed through these one-off methods; and secondly, the rules can and do easily change materially from administration to administration. In the end, just when an organization has all the disparate rules from all the disparate agencies in mortgage and consumer finance implemented and fine-tuned … the rules change and you’re back at step one.”

And as the industry has worked in concert with regulators to keep Americans in their homes during the pandemic, will there be unintended consequences in the end?

“The government continues to expand its enormous footprint in the mortgage and residential real estate markets, as both markets are central to economic and social equality in America … for better or worse,” Rood said. “We learned from the nationalization of the student loan industry in 2010 that well-intentioned policies can have enormous and dire consequences: e.g., the explosion of aggregate student debt outstanding due to credit and collateral (approved universities) policies being expanded and loosened; tuitions mushrooming as financing becomes more available and cheaper; delinquencies spiking as riskier borrowers struggle and poor-quality universities fail; and defaults jumping as borrowers feel the government will eventually forgive student debt with no consequences to economically vulnerable debtors. Should a government-dominated or nationalized market for mortgages ignore the case study of the nationalization of the student loan market, then we can expect big challenges ahead for our industry.”

However, as Rood points out, the underlying factor in the end will be if business is back to normal and the industry is enjoying a healthy flow of volume as the market continues to seek normalization.

“The issue most top-of-mind for all industry players is volume … can it be found organically, or does it need to be manufactured out of sensible and sustainable loan product development,” Rood asked. “We need to be vigilant that new entrants to the non-QM market are using sound credit and pricing models to avoid self-harm and/or consumer harm. We have a huge presence in the non-QM market—from insurance to fulfillment or QC to pricing and securitizations, and we do our best to ensure the market has the benefit of our insights.”

Thomas Showalter, Founder & CEO, Candor Technology
Candor Technology offers the services of its Loan Engineering System (LES) as a SAAS (software as a service) to mortgage lenders. Led by Thomas Showalter, Candor LES performs the highest quality underwrite as part of a portfolio of fulfillment services that Candor offers to mortgage lenders.

“Our biggest challenge is helping our customers understand the difference between automation and innovation … automation can only take what you currently do and do it faster or with fewer steps,” Showalter said. “Candor’s focus is on helping our clients survive and thrive in this challenging market, and we are doing everything we can to provide them with the technology and insights they need to get through this downturn and succeed well into the future. To help with this, Candor will be extending its offerings from the fulfillment space to the POS/direct-to-consumer space, and in parallel also take its services to the due diligence arena with pre- and post-close due diligence services that are fully automated and tremendously more robust and consistent than conventional services, which are manual and suffer quality, cost, and speed problems.”

Continued cooperation with regulatory bodies is a huge step that Showalter feels the industry is taking in the right direction.

“It’s a fair expectation that increased regulatory scrutiny lies ahead, despite the recent performance of the mortgage market,” Showalter said. “The CFPB is signaling extensive underwriting reviews concerning the way servicers treated COVID-19-linked loans in forbearance. And of course, servicers are naturally looking to level up the consumer experience. So, there is a growing duality of expectations from the underwriting services. We recognize that without an expert system, the initial servicing purchase or the transfer of servicing rights consumer data can get lost or diluted. The corrupted data presents an additional challenge when the CFPB reviews the loan, keeping in mind the CFPB is naturally on the side of the consumer. Ready access to this vital information is not only crucial for both the lender and servicer, but additionally helps with predictive analytics to adjust servicing strategy in real-time.”

Rich Smith, Chief Marketing Officer, PenFed Credit Union
Beginning in 1935 as the credit union inside of the Pentagon, PenFed Credit Union’s mission was to support financial services for government employees and their families.

Eventually, PenFed grew across the country into all 50 states, including Puerto Rico and Guam. It wasn't until about three years ago that the credit union increased its focus on consumer lending. In 2019, PenFed’s leadership decided to enter the mortgage space, which included hiring more talent to grow in that sector. At that time, PenFed had approximately 1.8 million members, and is currently sitting at 2.9 million members and growing.

Rich Smith, Chief Marketing Officer for PenFed, shared his thoughts on the challenges his firm has faced in light of the pandemic.

“Our goal in the last three years was to create an awareness around the unique position that I think that we were in—we had a huge member base and had built brand loyalty for consumers within consumer lending and deposits, but those same consumers didn't know us as a mortgage company,” Smith said. “So, how were we going to build that awareness? Even in a low-rate environment where we just talked about it's easy to sell mortgages, easy, but brand loyalty still exists amongst consumers for certain companies. We started looking at data and asking, ‘Where are our members going?’”

Serving the mortgage space for just a short period of time and then being hit by the pandemic may have rattled some firms, but PenFed maintained its focus and the outlook is a positive one.

“A lot of companies grew very rapidly over the last few years, adding a lot of capacity. Now, as an industry, we’re fighting over this shrinking pie and you’re seeing lots of organizations laying people off,” Smith explained. “The way we designed our business, we built a lot of variable capacity and slack into the system, so we haven't had to reduce staff, thankfully. We continue to be able to grow and take market share, and we were the only mortgage company in the top 50 to grow in the first quarter versus the fourth quarter. Will that continue? You know, we're facing a lot of headwinds to make that happen. I feel like we're in a pretty good position based on our size and the size of our portfolio to continue to grow and take share. There's a lot of opportunity for us to grow within our own member base, within people who know us. When I think about tailwinds, that's really the one I know we can count on if we continue to focus on improving the customer experience.”

When it comes to driving more business, Smith shared a marketer’s perspective and what his goals are to keep the pipeline full, no matter the outside forces impacting the marketplace.

“The perception surrounding marketing within many organizations is changing,” Smith said. “Probably too slowly, but still, it is changing. Marketing really does drive strategy and I have told similar things to my team many times—our job inside the organization is to educate the organization. We lead with insights. I came up as a direct marketer mostly—that's where I got my start. In direct marketing, you learn to embrace data insights. I think that's how you earn your seat at the table from a strategy perspective. Show up with the insights, show up with the data, bring the information forward that nobody else has. Marketing becomes a valuable resource because we are the voice of the customer, the source of the information, the eyes in the field.”

Dan Sogorka, CEO, Sagent
As CEO of Sagent, Dan Sogorka oversees a homeowner-first servicing platform seeking to modernize loan servicing for America’s top banks and lenders.

“As the industry has reacted to macroeconomic shifts, regulatory changes, and tech advancements on the origination side, the consumer hasn’t been at the center of their home-owning life cycle—until now,” Sogorka noted. “At Sagent, we saw an opportunity to differentiate ourselves through an intense focus on the homeowner by giving them the tools they need to manage their loans, and help them manage their unique financial situations and—most importantly—connect with them as human beings in good times and bad.”

The necessity of adapting to changes in the marketplace is nothing new. Sogorka notes that his company has had to navigate the constant speedbumps that have been thrown in the path of servicers over the past few years via tech enhancements in the servicing space.

“Times are certainly changing for the mortgage industry, specifically on the servicing side,” Sogorka said. “Over the last couple of years, after the initial passage of the CARES Act and counseling borrowers through the early days of the forbearance process, servicers jobs’ have been straightforward. Now, it’s getting a lot harder, and we’re helping them prepare by providing cloud-native, open-API technology that helps banks and lenders control their tech spend and helps borrowers control their financial situations. By maintaining a fintech development mindset, we can continue to help servicers drive engagement (and retention) with homeowners in new and innovative ways.”

Despite the many tech advances that emerge from changing times, Sogorka is confident that through the age-old process of the human touch, both servicers and their customers will arrive at an end point mutually beneficial to all parties.

“The servicer will continue to evolve into a ‘trusted advisor’ in this space—not the ‘gotcha’ person that the homeowner views with skepticism and distrust,” Sogorka said. “We pride ourselves on helping our customers connect with their borrowers and show how they can help. Unlike in previous cycles, today, we have quality borrowers, quality data, and, most importantly, quality systems in place to help our customers guide their homeowners through periods of financial uncertainty and arrive at the best outcome for everyone involved. That means more stability for homeowners and lower servicing costs and higher margins for servicers.”

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.

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