Just when executives working in the mortgage industry were beginning to feel like they were change experts, the new administration in Washington, D.C., unleashes a gush of change that threatens to engulf us all. Although the industry is dealing with meeting millennial demands and adapting its systems to the last round of regulatory changes, President Donald Trump has signed an executive order directing the Treasury secretary to consult with regulators about what needs to be done to reform the Dodd-Frank Wall Street Reform and the Consumer Protection Act.
Now, even the changes may be changing. There is little doubt that whatever path the government takes, it will impact the mortgage industry and, in particular, the servicing sector. Although many people in the servicing industry may be reluctant to face the next round of change, given all they have invested in new processes and systems in recent years, others see this as an opportunity. Among them is Melanie Cornelius, vice president of national business development of mortgage, appraisal-business process outsourcing, title, and tax services for SLK Global Solutions, a provider of business process management services and solutions to the mortgage industry. MortgageOrb recently interviewed Cornelius, shortly after she returned from the Mortgage Bankers Association’s (MBA) National Mortgage Servicing Conference in Dallas, to get her take on where the mortgage servicing industry is headed from here.
Q: Given the uncertainty around new rules and the new administration, what are servicers preparing for now? What are they worried about now?
Cornelius: Sustainability. The servicing sector has spent several years reconfiguring systems; testing operating capabilities; and training people to respond appropriately to the ongoing regulatory changes presented by the Consumer Financial Protection Bureau’s mortgage servicing rules, the TILA-RESPA Integrated Disclosures rule, and the Home Ownership and Equity Protection Act, among other regulations. The servicers we’ve been speaking to lately are preparing contingency plans that will allow them to adapt swiftly to whatever changes the regulatory bodies make in response to President Trump’s executive order.
Servicers know they have to meet whatever regulatory requirements are handed down without compromising the quality of their efforts on the behalf of the investors they serve. It’s a challenge. One way they are responding is by embracing new technologies, including big data analytics. They know they have to up their game in order to remain on par with the industry and live up to the demands of investors and their newest customers, the millennials.
It is a challenging time, given the pressure of reacting to changing regulations, deploying new technology, and being prepared for anything and everything. However, the servicers we’ve been speaking to feel they are up to the task.
Q: Given the current market situation, what do you see as the best path forward for servicers?
Cornelius: I always fall back on my belief in the power of three – first, making certain that they have learned from the past and have incorporated the best practices that they have created based on that for use in the work ahead. Second, servicers, going forward, must continue to foster communication with their clients on both sides – investors and borrowers. There is little doubt that regulators will continue to value transparency – and we know that borrowers do. Third, servicers must surround themselves with partners that are developing new technology that provides transparency and drives value in core operations.
Also, we must keep in mind the rising costs to service a loan. It is best to standardize the mortgage modification process and reduce risk. This can be achieved by utilizing technology solutions that offer built-in integration to various data sources. In addition, increased collaboration will elevate customer service and improve the servicing of both performing and defaulted loans.
Q: As a provider of technology products and services to the mortgage industry, how are you keeping pace with the changing landscape of the servicing industry?
Cornelius: As a vendor that can meet the needs of most firms working in mortgage, title, tax and appraisal, we constantly leverage best practices within our own teams to keep up with the frequent changes our industry faces. We make it part of our mission to keep our clients up to date. The industry today needs us to be nimble enough to adapt quickly without any compromise in quality. It’s all about collaborating, communication and partnership.
Q: What insights did you bring back from last month’s MBA servicing conference?
Cornelius: I was pleasantly surprised to see so many young attendees at the conference. We’re not just servicing millennials today – we’re working alongside them, and that’s good for all of us.
The common theme was technology adoption and streamlining processes so that servicing is more efficient for all stakeholders. The MBA did a good job of delivering the most up-to-date content, particularly with one session discussing blockchain, which was great to hear about, as we have that on our agenda, as well.
The servicing industry has been quick to understand that only by adding these technology-based components can we enhance the efforts of our valuable staff so they can better focus on the client experience. After all, it’s all about efficient workflow, reducing the cost to service a loan, heightening the level of quality, delivering optimum customer service, and above all, retention.