4 Hot Topics at the Upcoming MBA Commercial Mortgage Servicing/Technology Conference

Eric Wilson is Senior Vice President and Business Leader/Mortgage with SLK Global, Dallas. He is a mortgage industry veteran with more than 20 years of experience. He can be reached at eric.wilson@slkgroup.com.

This weekend, executives from the nation’s leading commercial mortgage loan servicing operations will head to Miami to attend the Mortgage Bankers Association’s Commercial/Multifamily Servicing & Technology Conference. Our own executives are excited about attending this show, as the strengthening economy indicates to us that these players will become increasingly important–and busy–as we continue moving into 2018.

To determine what attendees will likely discuss at this conference, we surveyed our internal executives and a select set of our customers to settle on a set of hot topics we expect to hear reverberating through the Intercontinental hotel later this month.

With compliance, technology, the potential for business growth and the need to expand operations all coming together as issues to be discussed at a single conference, it took some work to boil down the possibilities to a few topics for this article. Here are the issues we expect to hear servicers discussing at this event.

1. How the market is changing and what that means for the future
One of the reasons that we attend industry conferences each year is to find out what experts predict the future will hold. In our business, that depends a great deal on how the economy is expected to change over the coming few quarters. As expected, this year’s commercial servicing conference will provide this kind of insight.

MBA will dedicate one of its general sessions to the topic, appropriately titled “What now? Economic and Commercial Real Estate Outlook.” Jamie Woodwell, MBA Vice President of Commercial Real Estate Research, will present the keynote and, according to MBA, will “discuss the latest on the economy and the CRE marketplace, with a special focus on issues of importance to commercial and multifamily mortgage servicers.”

According to an article published in USA Today, economists reported earlier this year that the recovery was beginning to expand to more industries, finally pulling many Americans off the sidelines and back into the economy. Further, a survey of 52 economists forecast an average growth of 2.6% in 2018, but that was before the Republican tax-cut bill was signed into law.

It will be interesting to see what the MBA research tells us, now that the first quarter is behind us.

2. How customer service is changing in the servicing industry
When it comes to the way customer service is changing, the mortgage industry has focused a fair amount of attention to the residential mortgage servicing side, and not to commercial servicing. This makes sense, as the Consumer Financial Protection Bureau has changed the rules there, as have the government-sponsored enterprises and other independent regulators. But the question is just as valid on the commercial mortgage side.

One of the more interesting sessions at this year’s conference is entitled, “The Shape of Customer Service: Building and Managing Relationships with Stakeholders.” In its description of the session, MBA says:

“Industry experts outline strategies for developing productive relationships with the various parties that can impact a loan, borrower and lender/investor post-closing. Additionally, the discussion will focus on technologies that can assist in providing timely and accurate information for various stakeholders.”

Commercial servicers know the number of stakeholders they have to deal with makes everything more complicated. Timely status updates are a primary driver of increased customer satisfaction, for both residential and commercial borrowers. It will be interesting to see what new technologies will be presented at the show to deal with this important issue.

One area where timeliness contributes to both customer satisfaction and increased profitability is property tax delinquencies. Managing these problems quickly is key to both keeping the deal stable and safe and to ensuring that the investor isn’t exposed to increased risk of loss. Our own executives will be visiting this topic extensively with servicers at the show.

3. How to deal with increasing complexity in the servicing business
One of the hottest topics we expect to hear at the upcoming show will focus on how complex the commercial loan servicing business has become. As servicers have grown their portfolios, they have also witnessed an increasing number of triggers that must be identified, boarded and monitored in a very unforgiving environment.

MBA will cover this at the conference in a session entitled, “All the Money in the Portfolio: Triggers and Cash Management.” Servicing executives will discuss what happens once a trigger event has occurred, from communication with the borrower to implementation of the trigger (s) across the servicing platform. We expect that conversation to continue after the session.

From our perspective, we have seen this happening over the past few years, mostly in the form of multiple overlapping taxing jurisdictions. Tracking and updating taxes for multiple parcels spread across multiple locations in multiple jurisdictions for single loan within the portfolio has become more common. A single mistake anywhere can cost the servicer money and expose the investor to increased risk.

Commercial servicers are tasked with accessing real estate tax data down to the property level and then maintaining payment due dates, performing frequent revalidation of delinquent taxes as well as monthly revalidation if the delinquent taxes still exist or are cured. Keeping up to date on the amount due to resolve any delinquent taxes for properties headed to foreclosure is a requirement if the servicer hopes to mitigate risk.

This can all become overwhelming when you are dealing with literally thousands of overlapping tax jurisdictions for multiple parcels. We expect to have a number of conversations with servicers who are ready to off-load that entire process to professional providers in order to reduce the complexity of their work. It’s a smart move, and it frees them to focus on customer service.

4. How to partner with the best
One challenge we always hear expressed by servicers in attendance at these national shows relates to the difficulty involved in finding third party outsourcing partners that understand both technology and process, and also the culture and business environment of the servicers. As the commercial servicing business continues to heat up, we expect to hear more executives looking to find qualified, experienced partners.

There are many providers, some claiming to service all areas, but what we have found is that specific areas, like tax servicing, require specialized skills, experience, and technology, and only some partners can offer this. Even more importantly, the partner must be willing to work with the servicer collaboratively and with flexibility, to bring about excellence in the service being provided as well as end customer service, to the level that is being expected in the current customer-focused environment.

We always look forward to these conversations. We hope to see you at the upcoming conference. Do reach out in case you would like to connect at the conference.

(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA Insights welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at msorohan@mba.org; or Michael Tucker, editorial manager, at mtucker@mba.org.)