Mortgage customers are telling you their frustrations. The right servicing technology can help you help them.

In 2023, consumers submitted nearly 28,000 complaints about mortgage firms to the Consumer Financial Protection Bureau. The CFPB’s annual report tracked everything from pains around payment to the frustrations of dealing with rude service representatives. Servicers can use this data to better understand their customers’ expectations – and how to build a more resilient operation that meets and exceeds their needs.

Here’s the topic breakdown of the complaints documented in the CFPB report:

These thousands of complaints can serve as a sounding board for servicers. Mortgage customers are telling you their frustrations, which means you have the golden opportunity to make sure your servicing technology delivers the experience they’re looking for.

Trouble surrounding payments

Of the nearly 28,000 complaints submitted to the CFPB about mortgage firms, trouble surrounding payments dominated the conversation, with approximately 11,400 people claiming they had trouble paying at various points throughout the mortgage life cycle. This includes after servicing transfers, which tend to be complicated from a regulatory perspective and customer satisfaction standpoint.

Servicing transfers receive high regulatory scrutiny because of the enormous volume of data involved in transferring loans, and the potential negative impact to customers should a transfer not be executed properly. A messy servicing transfer can leave borrowers struggling with contradictory information on their loan, i.e. loan numbers that no longer match or autopayment settings that may have changed without their knowledge.

Within the last several years, technology has significantly advanced to give servicers the tools and insights to proactively meet their customers’ needs in that area. ICE’s automated loan boarding solution is designed to help servicers reduce the time, risks and costs associated with servicing transfers as well as newly closed loans. By automating document recognition, extracting critical data from those documents, verifying mapped data, and providing data quality checks, an efficient loan boarding solution can lead to a smoother, more streamlined experience for servicers; and more importantly, it can reduce the chance that your customers miss payments because of sudden changes in their information.

Automated loan boarding solutions aren’t the only tools available to help meet customers’ payment expectations. Servicers can also use servicing application programming interfaces (APIs) to easily establish secure connections between capabilities, like setting up an auto-payment between your core servicing system and the consumer-facing application.

When evaluating whether your servicing technology helps you proactively meet customers’ payment needs, look for solutions that provide developers with the resources and documentation to build and deploy applications quickly. This will give organizations the tools to address the most prevalent customer concerns, while lightening the load on development teams.

Concerns around loss mitigation

The CFPB report also mentioned payment frustrations among borrowers exiting forbearance plans. Those forbearance-related complaints often involved late and other fees, negative credit reporting, delays and confusion during loss mitigation, and threats of foreclosure.

Loss mitigation is when your customers need you most. They need reliable access to your servicing team, and they need the confidence that your staff are experts who can guide them through this complicated process. In fact, the CFPB cited confusing or conflicting communications around modification and deferral options as a frequent complaint during loss mitigation.

Look for technology that that can help streamline industry-standard retention and liquidation workouts, as well as proprietary forbearance and modification programs to help simplify decisioning and record what decisions were made. Even better if that technology comes with built-in quality controls and validation points to help reduce risk and manage customer information throughout loss mitigation.

Don’t overlook how vulnerable your borrowers can feel during this time. Unexpected financial challenges are emotionally taxing, and many customers might find it easier to ask for help online rather than making a phone call. Ask yourself whether your technology features digital tools that allow customers to request payment assistance through an advanced self-service prompt and proactively seek help during difficult times.

Proper customer support is a key piece of the puzzle, because the report also found borrowers in loss mitigation filed complaints about rude customer service representatives, or the inability to get in touch with a representative at all. The right servicing technology provides service representatives with access to clear and concise loan information so they can present your borrowers with comprehensive, organized and relevant options. Secure messaging technology also exists that allows customers to initiate support around the clock – even outside regular business hours – and places those messages in a queue for agents to begin responding to once their shifts begin.

And servicers looking to help their borrowers even further during loss mitigation should not discount home equity options. Strong home equity cushions open additional opportunities for servicers to explore, like using earned equity with a traditional home sale rather than going through foreclosure. Servicers need technology that gives them - and their customers - the insight they need to come up with the best possible solution and avoid foreclosure.

With the right technology in place, servicers can make the loss mitigation process more successful and less stressful for borrowers in need.

Refinancing existing mortgages

The CFPB also logged more than 2,000 complaints around applying for a new mortgage or refinancing an existing one. With affordability, interest rates and home prices constricting buyer demand, servicers would do well to offer strong refinance options. It’s in fact one of the better opportunities today to increase customer satisfaction and retention.

To turn this customer complaint into an opportunity for growth, consider this: ICE’s March 2024 Mortgage Monitor data shows homeowners are sitting on $11 trillion of tappable home equity. Does your technology help you identify customers likely to refinance? And does it help them understand both their refinance and home equity potential?

This is a topic ICE is uniquely equipped to handle in today’s market. The integration of ICE’s robust dataset with the MSP® loan servicing system helps servicers identify customers in their portfolio who are most likely to take advantage of home equity loans and lines of credit, or a refinance. Servicers can then provide those customers with information like the value of their home, and how a refinance could benefit them now and in the future.

ICE also provides tools that help customers explore their options and perform “what if” scenarios, including options for building equity more quickly, and the benefits (or drawbacks) of paying down or refinancing their loan.

Conclusion

In their own words, nearly 28,000 borrowers have told the mortgage industry what they want. The right servicing technology can help servicers and mortgage professionals respond. Contact ICE today if you’re ready to start exploring solutions that help you meet your customers where they are.