It’s 2022. Most people would say we’re well into the digital age, and many say technology is advancing too quickly. After all, just try and think of an industry that technology hasn’t touched and advanced.
You might spend a long time thinking, so we’ll tell you one that you might find surprising—Mortgage Servicing.
That’s right! The over $11 TRILLION industry that literally the entire nation is involved with in one way or another is still doing things the old-fashioned way with largely paper-based systems. The technology mortgage servicers get to use are digital spreadsheets and PDF files, which debuted in the early 80s and 90s, respectively. And if you think that’s bad, the databases they work with haven’t seen innovation since the Kennedy Administration.
Now, we’re not trying to disparage mortgage servicers by saying they are behind the times. For decades, they’ve stuck to a system that works, and there’s nothing wrong with that. But, if you’ve ever had the misfortune of trying to modify your home loan in any way after it leaves origination, you know that doing so moves at a snail’s pace. That can be incredibly frustrating and stressful if you’re trying to modify your loan due to financial hardship.
It’s not that mortgage servicers don’t want to adopt new technology that will make things easier. The mortgage servicing industry is insanely complex, with many different rules and regulations that Servicers must comply with. Imagine being the first mortgage servicer in over 50 years who attempts to change the way things are done. That’s a scary thought, and fear is the #1 reason industries (and people in general) remain complacent with the status quo.
However, as a whole, the mortgage industry is not without advanced systems. Over the last few years, we’ve seen a flurry of investment in innovation for loan origination that can underwrite and close home loans quickly. We believe Servicing is deserving of this same attention, even though it doesn’t make the lion’s share of the mortgage industry’s profits.
At Brace, we believe in fair and equitable systems. We don’t believe that mortgage servicing, as it operates today, is treating its users fairly. It’s not fair to the homeowners who must go through painful processes to ensure they stay in their homes. It’s also not fair to the Servicers who struggle through legacy technology and disparate systems to try to help. We’ve met so many good, hardworking people who are forced to put in place frankensteined solutions and workarounds to make these outdated systems work for specific business and compliance needs. It’s a lot of old wires, and no one knows where they go.
We’re empathetic to that. We understand that an $11 trillion asset class is a boat that’s difficult to rock. It’s why the status quo has persisted for well over half a century. We’re taking the challenge of helping evolve the mortgage servicing industry away from the status quo head-on. We believe mortgage borrowers, servicers, and investors deserve a better experience—and the old excuses for not giving them one don’t cut it.
In doing so, we can finally give borrowers a 21st Century digital experience, give servicers better margins, workflows, and efficiencies, and give investors higher visibility and returns. We’re building technology with frameworks that have only become available in the last few years. We’re applying lessons from origination and drawing further expertise from well beyond the traditional confines of the mortgage industry.
It may sound presumptuous, but those of us that believe in what Brace can do for Servicing is more than an industry disruption. It will be a paradigm shift in which every stakeholder in the mortgage ecosystem benefits.