Streamlining Mortgage Servicing With APIs And Digital Technology

To thrive in the highly competitive mortgage industry, mortgage servicers need to improve the borrower experience. In the J.D. Power 2019 U.S. Primary Mortgage Servicer Satisfaction Study,  mortgage servicers’ customer satisfaction scores (777 on a scale of 1 to 1000) were at the bottom of the industries studied by J.D. Power. Only health plans had a lower satisfaction score (712). “Mortgage servicers are really missing an opportunity to build the kind of goodwill with their customers that has proven to translate directly to increased advocacy and repeat business,” said John Cabell, Director of Wealth and Lending Intelligence at J.D. Power. “The industry’s laser focus on lowering costs, managing regulatory compliance and minimizing delinquencies has come at the expense of customer experience.” 

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Many borrowers don’t choose their mortgage servicer but wind up with them when the servicer purchases their loan in the secondary market. Transferred customers have significantly lower satisfaction scores, and more problems with payment and escrow accounts, than borrowers who chose their mortgage servicer. Fifty four percent of first-time home buyers say they are confused, angry or irritated when they’re transferred. Servicers need to improve communication and the payment and escrow processes, particularly for transferred customers. 

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By providing multiple ways to easily make payments, efficiently administering escrow, and offering more personable customer service when the need arises for direct communications, servicers can improve their borrowers’ experience. Automating routine tasks gives servicers more time to respond to borrowers’ unique needs. Digital technologies such as Application Programming Interfaces (APIs) and web applications help servicers streamline servicing operations and improve communication, thereby delivering better customer service. 

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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. 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 any and all parties interested in developing an interface or connection to their product or service. 

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By improving efficiency, APIs and digital technologies help mortgage servicers provide a better borrower experience. 

Improving Efficiency via Automation

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 more quickly and accurately deliver updated statements and loan information 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 Digital Channels to Increase Efficiency and Satisfy Borrowers 

Digital servicing facilitates information exchange with borrowers, improving efficiency and borrower satisfaction. Borrower-facing web applications provide immediate access to mortgage information and statements, reducing phone calls from borrowers and saving staff time. It also frees up time so they can provide service to borrowers who prefer to communicate by phone or in person. According to the J.D. Power survey, only about 60 percent of borrowers access information via their mortgage servicer’s website and 31 percent via mobile. Despite relatively low usage of digital channels, overall customer satisfaction is highest among borrowers who use them.   

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. Servicers can also send personalized messages to borrowers to read once they log in to the web application. 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 the right technology, mortgage servicers canimprove borrower satisfaction by communicating and sharing information quickly and accurately. 

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