How does the application of AI to the mortgage servicing process help with finding business where no one else can?
Being in the mortgage technology business is exciting, probably more so because I have so much experience in a lender’s shop. I can see how the pieces can come together to improve the lender’s business and the borrower’s experience.
Majority of the time someone is talking to the borrower’s experience, they are focused on the front end of the business, the loan origination process. That makes sense. Unless the borrower gets into trouble down the line, nothing will be as complex for them as getting from the application to the closing table.
When we do talk about the borrower experience for the servicing business, we’re typically talking about default servicing and the foreclosure process. That’s a nightmare scenario for the servicer, their investor and the borrower.
But there is another opportunity on the servicing side of the business that no one is talking about yet.
Artificial intelligence is changing everything about the way consumers interact with companies via online networks. Much of it is behind the scenes and invisible to them. On the origination side of the mortgage business, it’s being deployed now to remove friction during loan underwriting and processing.
But it’s capable of so much more, especially on the servicing side.
Now that interest rates are rising, borrower retention isn’t the hot topic it was when everyone was rushing to refinance the homeowners they worked with just a few months ago. To find potential new business in a servicer’s portfolio today, you must look at more than their current interest rate.
You’d really need to know everything about the borrower, their current loan and the potential new loans they might qualify for at any given time. Asking a human to comb through thousands (or hundreds of thousands) of loans looking for a promising candidate is not possible.
But new technologies could do it.
Portfolio retention powered by AI is a real future opportunity. The question in my mind is, “who is going to do it right?” Will it be a major lender who has retained the servicing rights for the loans they originate? Will be a servicer who handles production for a number of lenders.
Will it be the government? Who has more borrower, existing loan and new loan product data than the nation’s largest investors?
It might be someone from the outside, a big real estate company or technology firm. Whoever it is who finally cracks the code will finally be in a position to make good on the promise of customers for life in the mortgage space.
The benefits could be very exciting.
By Joe Camerieri, EVP, Sales & Strategy at Mortgage Cadence
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