Many consumers harbor ill feelings about their experience in the world of loan servicing, loan modification, collection and foreclosure. One needs to look no further than the Consumer Financial Protection Bureau Consumer Complaint Database for ample evidence. Between April 20, 2014, and Oct. 3, 2014, consumers filed 17,858 mortgage-related complaints with the Bureau, according to complaint database records.
Among the complaints lodged, 9,063 concerned loan modification, collection and foreclosure matters; another 6,327 concerned loan servicing, payments and escrow accounts. The remaining complaints fall into loan origination categories, thus outside the scope of this article.
It is not clear how many of the servicing and delinquency complaints are legitimate errors of omission or commission or, in other words, willful acts of fraud.
Take for instance the 6,327 loan servicing, payment and escrow account complaints that are marked “responded to by the servicer.” Of the total, 2,764 aggrieved consumers chose not to dispute the servicers’ response; another 1,325 consumers did dispute responses and 2,238 complaints remain in the resolution pipeline.
So it’s very difficult to say much about these cases, except that the consumer was dissatisfied enough to file the initial complaint.
Some who didn’t dispute a response may remain unsatisfied with their experience. Some who disputed a response may or may not win a favorable outcome. And who knows how many pending complaints will eventually lead to satisfied consumers? Which leaves many questions unanswered about how well servicers are actually doing at keeping their customers satisfied.
Unfortunately, if there is a question about a servicer’s ability to satisfy a consumer, it will send up a red flag for industry regulators.
Servicers must consider a positive customer experience to be a compliance mandate in the current regulatory environment.
Four Keys to Great Customer Service
Understandably, one of the primary goals for most mortgage loan servicers is to be in complete compliance with a myriad of financial industry statutes and regulations. However, playing to the letter of the law, as interpreted by the CFPB, does little to assure the satisfaction of servicing customers.
The sheer complexity and unfamiliarity with the servicing system and government consumer financial protections invites dissatisfaction among consumers. Laws and regulations lack the critical yet intangible factor of the human connection, to say nothing of the impersonal touch of technology systems designed to systematize compliance in what ought to be a high touch method for the servicing continuum. Nevertheless, success can be achieved.
The first key to successful customer satisfaction is a commitment to excellent customer service. This is a paramount ingredient for the entire life of the loan, regardless of the client, product type, loan performance or stage of delinquency. We realize that this is easy to say, but extremely difficult to deliver on a consistent basis. In today’s environment, the customer experience is an integral part of compliant servicing. Unless the entire organization is geared toward ensuring this outcome, it will never be possible to ensure full compliance.
The second key is to translate that commitment into a culture, driven from the top that rewards the work of anticipating customer needs. Mortgage loan borrowers cannot be counted upon to know their options. It’s up to the servicer’s team to help them work through the financial problems they encounter when it puts their mortgage at risk. The customer-oriented servicer works with investors to design a customized servicing approach that will provide the best possible outcome for borrowers.
The third key to success is the development of innovative information technology solutions. Unlike servicing technology of the past, these new solutions must be designed with the first key in mind. Technology must be employed that makes delivering excellent customer service easier. Well-designed servicing platforms are notable for managing an array of residential mortgages and incorporating the most current best practices, transparency, and flexibility to create a one-two punch of personal-customized service within both portfolio and loan-level performance.
Finally, the fourth key to success is the customer feedback loop. Without some assurance that the work the servicer is doing is contributing to the customer experience required by federal regulators, some method of gauging that experience is necessary. Technologies exist today that allow the servicer to poll borrowers on a regular basis, gleaning the required information even as they strengthen the relationship with these borrowers.
Improved customer feedback results in gaining actionable knowledge from customers, reduces strategic, operations, reputation and reporting risks, and the threat of CFPB scrutiny in reaction to unhappy consumers of mortgage services. Finally, a culture that reflects the servicer’s commitment to customer service will drive all team members to respond to and resolve customer concerns quickly.
All of these keys feed into an excellent borrower experience that helps build a good reputation. Firms that make these keys important parts of their operations will be more successful and see fewer consumer complaints. Their use also ensures that the servicer knows exactly how the company is performing in terms of customer satisfaction, which is one of the best measures of the firm’s reputation available in the marketplace.