MBA Newslink Q&A: Dovenmuehle’s Ron Malik on Diversifying Default Servicing Outreach

In today’s challenging economic environment, mortgage servicers are reevaluating their approach to connecting with borrowers to maintain loan performance and minimize default-related costs. MBA NewsLink recently spoke with Ron Malik, senior vice president of default operations at Dovenmuehle, who shared his perspective on the evolving state of default servicing, why diversifying borrower outreach is vital and how emerging technologies continue to reshape the borrower experience.

MBA NewsLink: How would you describe the current state of mortgage servicing and borrower engagement?

Ron Malik: Over the past several years, default servicing has become more data-driven, technology-enabled and borrower-focused. We’ve transitioned from a process that primarily relied on phone calls and letters to one that integrates a mix of communication channels, such as email, text, and online portals, making it easier for borrowers to stay informed and connected.

This shift reflects changing borrower expectations. Today’s consumers are accustomed to managing nearly every aspect of their lives digitally, and they expect that same level of convenience and transparency from their mortgage servicers. The goal is to combine technology with human understanding, offering borrowers convenient self-service options while maintaining availability for one-on-one support when needed. That balance helps create smoother, more supportive experiences that encourage engagement, even when borrowers are experiencing financial stress.

MBA NewsLink: What emerging pressures or borrower trends are influencing default servicing performance?

Ron Malik: Several factors are shaping borrower behavior and, by extension, default servicing performance. While delinquency rates remain relatively low compared to historical highs, we’re seeing subtle but consistent increases across certain loan types and regions. These month-over-month increases may appear minor—like a series of small paper cuts—but cumulatively they become both costly and disruptive if not addressed early.

We’re also watching broader economic trends that are putting pressure on household finances. The end of student loan forbearance reintroduced significant monthly obligations for many borrowers. Rising property taxes and insurance premiums are adding to that burden, and the growth of buy-now, pay-later programs has expanded short-term debt obligations. These mounting obstacles don’t always trigger immediate delinquency, but they erode the financial buffer many borrowers rely on. These combined factors can strain a borrower’s ability to stay current, even if their overall income hasn’t changed.

That’s why continuously monitoring performance data is critical. By identifying emerging risk pockets early, servicers can intervene proactively, reducing loss mitigation costs and delivering better outcomes for borrowers.

MBA NewsLink: Why has it become so critical for servicers to diversify their borrower outreach strategies?

Ron Malik: Delinquent borrowers are typically fielding a flood of calls and letters from multiple creditors. In that noise, a traditional phone call or mailed notice is easily ignored or overlooked. Diversifying outreach ensures servicers can engage with borrowers through their preferred channels.

Offering multiple points of contact, such as email, text, secure portals or chat tools, gives borrowers the flexibility to engage on their own schedule. For some, a conversation with a live representative remains the most effective approach. For others, being able to log into a portal after work and initiate a request for assistance on their own time is a less disruptive option. The key is to make those experiences consistent and accessible.

Beyond convenience, this approach also helps control costs. Electronic communication and digital self-service tools are generally less expensive than traditional methods, such as postage or call-based outreach and can expedite the loss mitigation process.

In an environment where servicing costs continue to rise, diversification not only increases borrower engagement but also improves operational efficiency and financial sustainability.

MBA NewsLink: How is technology, including AI, shaping default servicing and borrower engagement?

Ron Malik: Many servicers are viewing the borrower experience as a continuous, end-to-end process from the first sign of distress through resolution. Technology plays a key role in making that possible.

Digital tools, such as online portals, e-signature solutions and remote notarization, have modernized historically manual and time-consuming steps in the process.

For example, executing and notarizing loss mitigation documents can now be done electronically, reducing turnaround times and minimizing the inconvenience for borrowers who might otherwise need to take time off work or find a notary. These tools not only create a faster path to resolution but also elevate the borrower’s perception of the experience.

Artificial intelligence is now integral to this evolution—not as a replacement for people, but as a force multiplier. It automates repetitive tasks like document scanning, data extraction and workflow routing and enhances risk modeling by identifying early signs of borrower distress in large data sets. That helps servicers prioritize outreach and tailor assistance before delinquency becomes more severe.

However, while AI can streamline many processes, empathy remains essential. Technology can support communication, but it can’t replace the understanding and reassurance that a human representative provides when a borrower is in crisis. The most effective servicers are finding ways to blend automation and human connection to achieve both efficiency and compassion.

MBA NewsLink: What shifts do you see shaping the future of default servicing?

Ron Malik: The future of default servicing will likely be defined by proactive, data-informed engagement and greater connectivity across systems and channels. Servicers are moving toward models that anticipate borrower needs rather than simply reacting to delinquencies. This means leveraging data analytics, automation and customer insights to identify risks earlier and intervene more quickly.

At the same time, the human element will continue to be a cornerstone of effective servicing. The ability to communicate clearly, show empathy and build trust during difficult financial moments can make all the difference in borrower outcomes. The next era of servicing will be one where digital convenience and human understanding work in harmony, creating experiences that are not only more efficient but also more personal and supportive.

(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes submissions from member firms. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)