HousingWire recently spoke with Roger Stotts, Director of Services for New US fundingabout borrowers’ expectations for the service and current prospects for servicers.
HousingWire: What are the current challenges? administrators do they face each other?
Roger Stotts: In some ways, our challenges today are the same ones that good managers have always faced: doing what’s right for the client, protecting the investor’s interest, and doing these things the right way, which means complying with the rules and in the right way. more profitable. possible way.
From a compliance perspective, there is a lot of scrutiny from regulatorsBut that’s not new: It’s been the case since the mortgage crisis.
Obviously, cost and efficiency are paramount today, given the sharp drop in origination revenue that the entire industry has experienced. But treating our customers well as always has been the main concern at New US funding.
Nine years ago, when our owners decided to take our service in-house, they knew it would be a big and expensive undertaking. But they didn’t like the way the subcontractor treated our customers. That’s what I was told during my interview for this job and treating customers better has been my main influence ever since.
HW: New American Funding won the most recent JD Power Servicing Award as a relatively new servicing operation. Can you share some of the things New American Funding routinely does that other fund managers don’t?
RS: Winning the JD Power award was great and totally unexpected, because it was never our focus.
We earn it by doing what we’ve been doing since we started our service operation nine years ago: treating our customers right. Treat our people well. Select vendor partners who care about our customers and help us solve problems.
What do we do that other admins don’t? We try to anticipate the changes that are going to be the most traumatic or least stressful for a borrower and be proactive about it.
Escrow changes, for example. If our annual escrow analysis shows us there’s going to be a $100 or more monthly increase, we proactively call the borrower, so they don’t open that envelope and freak out and call us. People appreciate that.
Like all administrators, we are very focused on call center wait times. We believe that a customer should never have to wait more than 30 seconds, and 98% of the time they don’t. While we do monitor how many calls our customer service representatives handle, we’re not saying they should handle a minimum number. We never have, our focus is always on quality and how well they understood the borrower’s question and provided the correct information. Empathy is a big part of your quality score.
Finally, we work with vendor partners who have a similar approach to customer service and who will meet you at the table and talk through a problem and find a solution, not ignore it. Take tax service. We changed our tax service provider to LERETA about two years ago and every time we had a problem they fixed it right away and then tried to figure out why there was a problem in the first place.
Therefore, the JD Power award is not only our award, it is also the award of our business partners. If they weren’t doing their job for our customers, we wouldn’t have been recognized.
HW: What do you think borrowers will expect from their servicers in the future?
RS: Borrowers are more sophisticated today and want real-time information and answers. And the reality is that most of the time, they don’t want to talk to a person (unless there is a problem). For the most part, they prefer to deal with their administrator online or via email.
One of our biggest initiatives this year has been how to better serve our Latino customers. We have been doing this, of course, in our call center with the Spanish-speaking customer service representatives. We have now begun to update several of our documents to ensure that we are serving our limited English proficient customers.
What will your customers want in the future? Maybe the ability to make payments with your debit or Zelle cards with your payments. Today, we can’t justify the expense to implement that. technologybut in the future, if we see enough demand, we would definitely consider it.
Interestingly, our firm gets a lot of information about what customers want and/or customer problems from our loan officers. If I get 10 calls a month about customer problems, eight of them are probably from LO. They have ears wide open when it comes to what the customer really wants.
HW: What does the service landscape look like for the remainder of 2023 and early 2024?
RS: I think the service landscape will be more unpredictable this year. The economy and the real estate market could become a drag, although so far they have not had a major impact on loan performance or delinquencies.
Right now, admins are in something of a “no man’s land” in terms of COVID protections. For a while it looked like they were going to end, but now it seems that the Consumer Financial Protection Bureau and Federal Housing Finance Agency wants to extend them. On the one hand, this will give servicers more choice in what we can offer clients with GSE loans. But can private investors afford to offer the same options?
Even with these plans, frankly, not all borrowers will qualify or make it, despite patience and modifications. For those borrowers who do have equity, and the good news is most have a fair amount, selling might be the best option. But those that don’t will present a challenge, because regulators have warned the industry about traditional defaults. Finally, as long as service valuations remain high and origination volume remains at current depressed levels, we will see a fair amount of MSR trading to help lenders reach the bottom line.
