Cenlar’s Josh Reicher: Intelligent Automation Is Transforming Mortgage Servicing

Josh Reicher joined Cenlar in 2016 and currently serves as Chief Digital Officer. He manages both Digital Services and Borrower Operations technology teams, enabling Cenlar’s clients and customers both external and internal. With more than 20 years in the financial services industry and almost 30 years in technology overall, he has served in various IT leadership positions at Morgan Stanley, Bank of America and other organizations.

Josh Reicher

The emergence of intelligent automation, which is the use of automation technologies–artificial intelligence, business process management and robotic process automation–is transforming how mortgage servicers do business.

A historically tech-underinvested industry, mortgage servicing is shifting toward the cutting edge, delivering new solutions to improve effectiveness, decrease risk and drive a better experience for clients and their homeowners.

Mortgage Servicing Is Ripe for Modernization

Mortgage lenders have made significant steps to streamline their operations using modern technology. Loan origination continues to get closer to fully automated, self-serve, straight-through processing, with a heavy focus on online mortgage applications and digital document management. In terms of tech, originators have certainly been ahead of the curve for some time, but that technology is also reaching a point of maturity. That, coupled with housing market activity remaining weak overall, is driving mortgage servicing to shift to center stage as a target-rich market for new technologies that will effectively streamline post-closing processes. Of the many technologies gaining traction in the mortgage servicing space, intelligent automation is demonstrating some of the greatest value.

Intelligent Automation in Action

For Cenlar, intelligent automation is a key part of how we are transforming our business. This year, for example, Cenlar is working on more than 30 automation projects, including streamlining mortgage insurance (MI) cancellation requests, which eliminates a common pain point for homeowners who are waiting to hear back on a determination to learn whether their request to remove MI has been accepted. Now, homeowners are able to go to the homeowner web site and request to have MI removed, triggering our automation. Our system then sends the homeowner the appropriate letter within a week. Cenlar is seeing 97% improved operational efficiency, reduction in operational risk and homeowners get responses four times faster.

We are also automatically scrubbing federal data to ensure active duty military instantaneously receive the protections afforded to them by the Servicemembers Civil Relief Act (SCRA). Our SCRA Scrub automation identifies and verifies the military status of homeowners so that they are provided the appropriate protections under SCRA. When a service member is deployed, we know that the last thing on their mind is contacting their mortgage servicer. To ensure timely and accurate SCRA protections are implemented, our SCRA automation scrubs our entire portfolio against the Department of Defense’s database, updates information as appropriate and notifies our back office team of which loans and fields were updated each day.

Making the Case for Intelligent Automation

When mortgage servicers are considering automating processes, it is important to make a compelling case for the investment. Here are some steps servicers can consider: 

1.         Identify pain points and inefficiencies in the current mortgage servicing processes. This could include manual data entry, lengthy approval processes or high error rates. Quantify the impact of these pain points in terms of time, cost and customer satisfaction.

2.         Explore the available automation solutions in the market that can address the identified pain points. Look for technologies like robotic process automation (RPA), workflow, document understanding, machine learning, or AI that can streamline processes, reduce errors and improve efficiency.

3.         Develop a comprehensive business case that outlines the benefits of automation. Highlight the potential cost savings, such as reduced labor costs and improved operational efficiency. Emphasize how automation can enhance customer experience by decreasing processing times and errors and reducing operating risk. Also, include a timeline for implementation and expected return on investment (ROI) calculations.

4.         Present the business case to key stakeholders, including senior management, IT teams, legal and compliance. Clearly communicate the benefits of automation and address any concerns or objections they may have. Emphasize how automation aligns with the organization’s strategic goals and regulatory requirements.

5.         Consider starting with a pilot project to demonstrate the effectiveness of automation. Select a specific process or workflow to automate and measure the impact on efficiency, accuracy and customer satisfaction. Use these results to further validate the business case and gain buy-in from stakeholders.

By integrating intelligent automation in mortgage servicing, it can improve performance, delivering better service for clients and their homeowners. For employees, intelligent automation means reducing manual tasks, freeing up our colleagues to do more creative, analytical work and, thereby, creating a richer, more fulfilling workplace experience.  

(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 NewsLink welcomes your submissions. Inquiries can be sent to NewsLink Editor Michael Tucker at mtucker@mba.org or Editorial Manager Anneliese Mahoney at amahoney@mba.org.)