Sponsored Content from FICS: Mortgage Software APIs and Web Applications Streamline Servicing, Improve the Borrower Experience
To thrive in the highly competitive mortgage industry, mortgage servicers need to improve the borrower experience. Many borrowers are dissatisfied with their mortgage servicer. According to the Mortgage Bankers’ Association, only 17% of borrowers plan to return to their same mortgage servicer for another loan.
J.D. Power’s 2019 U.S. Primary Mortgage Servicer Satisfaction Study revealed that mortgage servicers were at the bottom of the industries studied with a score of 777 out of 1,000. The only other industry with a lower satisfaction score was health plans at 712. [https://www.jdpower.com/business/press-releases/2019-us-primary-mortgage-servicer-satisfaction-study] The average satisfaction score in the 2020 U.S. Primary Mortgage Servicer Satisfaction Study was a few points higher, at 781. [https://www.mpamag.com/news/digging-into-j-d–powers-mortgage-servicer-satisfaction-study-229563.aspx]
The COVID-19 financial crisis has challenged mortgage servicers and heightened the need for personalized service to navigate through forbearance and repayment options. Historically low interest rates, record high unemployment, and rising delinquencies have created a surge in borrower inquiries. According to the J.D. Power 2020 U.S. Primary Mortgage Servicer Satisfaction Study, servicers are not handling that surge well.
“The COVID-19 pandemic has really amplified the gaps in customer satisfaction, digital experience and call center experience that have been a challenge for mortgage servicers for some time,” said Jim Houston, director of consumer lending intelligence at J.D. Power. “At a time when the need for streamlined, effective digital guidance and proactive outreach and counsel is more important than ever, mortgage customers aren’t finding the answers they need online, pushing them onto long customer service queues in call centers and leaving them to hunt for answers on how best to address their challenges.” In fact, 19% of customers say it is not easy to contact a live agent via phone. This negative experience causes a 261-point drop (on a 1,000-point scale) in satisfaction for consumers who prefer using this communication channel.
The right amount of proactive communication from lenders increases borrower satisfaction. The most satisfied borrowers (with an average score of 810) receive three or four proactive communications per year from their lender. Yet only 8% of customers reported receiving this level of communication. And 40% of borrowers said they receive no proactive communication, while 29% receive too many messages (11 or more). Both extremes result in lower customer satisfaction.
By communicating proactively with borrowers and providing personal support when needed, servicers can increase borrower satisfaction. Automating repetitive tasks and reducing routine phone calls give servicers more time to respond to borrowers’ unique needs. Mortgage software Application Programming Interfaces (APIs) and web applications streamline mortgage servicing operations and help servicers improve the borrower experience by communicating and sharing information quickly and accurately.
Improving Efficiency via Automation
APIs are viewed by mortgage lenders as the top technology with the greatest potential to help improve or streamline processes, according to a recent Fannie Mae survey [http://fanniemae.com/portal/research-insights/perspectives/mortgage-lenders-new-technologies-042219.html]. An API is a software-to-software interface that enables applications to easily communicate back and forth without the need for user awareness or intervention. APIs can be used internally specifically for a given company or organization, or externally and made available to all parties interested in developing an interface or connection to their product or service.
One of the biggest benefits of utilizing APIs is the workflow-automation they provide. Used in conjunction with an automation or scheduling tool, an API can automate the execution of mortgage servicing software programs—such as end-of-day and end-of-month reports, investor close out, monthly loan statements and programs such as bank/credit union core interfaces.
Increased automation provides a wealth of benefits for servicers, including fewer errors, reduced staff hours and monetary costs, and more seamless operations. APIs also benefit borrowers, who desire transactions that are as quick and convenient as possible. By using APIs, servicers can expedite their processes and eliminate much manual labor, allowing them to deliver updated statements and loan information more quickly and accurately to borrowers via a consumer-facing website. Borrowers gain immediate, real-time access to their specific loan data and statements and can conveniently make online payments 24/7.
Using Web Applications to Increase Efficiency and Satisfy Borrowers
According to the 2020 J.D. Power study,62% of customers visit their lender’s website as a first line of information but only 28% say online is the most effective channel by which to resolve an issue. Among those who couldn’t resolve their issue on the lender’s website, 45% had to speak with a representative to resolve it. To satisfy borrowers and reduce routine phone calls, servicers need to make sure their website provides easy access to the information borrowers need. Consumers want to find answers quickly, with as few clicks as possible.
Borrower-facing web applications allow servicers to provide real-time information to borrowers, increasing efficiency and borrower satisfaction. Web applications provide immediate access to mortgage information and statements, reducing routine phone calls from borrowers, and saving staff time. Servicers can use that extra time to provide personalized service to borrowers—such as those who are in forbearance due to the COVID-19 pandemic—who need or prefer to communicate by phone or in person. Borrowers can also make online payments and view online personalized messages from servicers.
Environmentally conscious borrowers, particularly Millennials and Gen Z, want to be able to opt out of paper statements and receive documents electronically. Web applications are the preferred method of communication between borrowers and servicers, providing convenient, paperless access to loan information and allowing multiple options for online payments. Servicers can be proactive by providing convenient, online payment options, thus encouraging borrowers to make their mortgage payments on-time or even early.
Paperless statements and other mortgage-related documentation allow borrowers to include their mortgage documents with their other digitally stored financial information. By storing digital versions of their statements, borrowers won’t misplace paper copies and call the servicer requesting a historical statement. Web applications allow servicers to send automated email messages to borrowers, encouraging them to view their statements and notices online.
APIs and web applications streamline mortgage servicing operations, saving time and money and benefitting borrowers and servicers alike. Convenient, 24/7 access to mortgage information and online payment options are essential to satisfy today’s borrowers. By using mortgage software APIs and web applications, mortgage servicers can improve borrower satisfaction by communicating and sharing information quickly and accurately.
Susan Graham is President and Chief Operating Officer of FICS (Financial Industry Computer Systems Inc.), Addison, Texas, a mortgage software company specializing in in-house mortgage origination, residential mortgage servicing and commercial mortgage servicing software for mortgage lenders, housing agencies, banks and credit unions. FICS’ software solutions provide customers the flexibility to choose an in-house or cloud hosting solution. The company also provides innovative document management, API and web-based capabilities in its full suite of products. She can be reached at SusanGraham@fics.com.
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