Mortgage servicing is more complex than ever, and while some large servicers are sinking real resources into innovation, many are hesitant to branch out beyond the decades-old systems they’re comfortable with. This could be risky if delinquencies continue to rise in the coming years.
“I think servicers are hesitant to branch out beyond these 60-year-old systems that hold the way, the truth and the light to everything that we do in the context of mortgage servicing,” Courtney Thompson, the head of servicing at CMG Financial, said this week at the Mortgage Bankers Association‘s Servicing Solutions Conference & Expo.
There are tech solutions that allow all operators to be on the same system, and where call-center staffers don’t need to toggle between four different systems — plus ICE‘s MSP or Sagent‘s LoanServ — to communicate with a customer about the status of their loan, she said.
But taking on a new tech stack isn’t a simple undertaking, said Patrick Couture, senior vice president of servicing at Planet Home Lending.
“To make a decision on technology and AI is really scary,” Couture said. “Let’s just say it costs $100 to do something today as a servicer. The initial vendors are probably going to come in with AI and say, ‘We can do that same process for you for $90. And that’s, as a servicer, really appealing, right? Because you could save 10% right off the bat. But then you realize that the real cost of that was $5.”
Couture said Planet is first going to its “big-box servicer” vendors to see what they have and what fits. “And if they don’t have a solution for it, we go into the market and see what’s there. I think the vendors we choose today are going to be with us for a while, and so it’s really important to make the right decisions.”
At Cenlar FSB, the country’s largest subservicer, president and CEO David Schneider said the company is particularly excited about the potential of artificial intelligence.
Cenlar is “looking at AI and figuring out what the right process is for how we interact with our consumers, being really careful about those consumer interactions, making sure we always have a staff person involved,” Schneider said. “But we think that the opportunity is just incredible, especially for someone like us with over 2 million loans in our platform, where the investments are significant but can be spread out over a scale platform.”
Cenlar is using AI to assist with real-time coaching and summaries for its agents, which frees them up to work on the more difficult questions posed by customers.
Shayna Arrington, chief risk officer for Servbank, said the technology question starts with culture. Security and data privacy controls must first be established, and employees must have clear paths to tackle challenges independently.
But those who resist using AI will be left behind, she warned.
“That’s what’s going to put you out of business,” Arrington said. “The gap that we’re going to create with that technology, you’re not going to catch up. … That gap will become a chasm.”
