Customer Experience


Brace Mortgage Servicing Pulse: Servicer and Consumer Data Suggest the Ongoing Downturn Will Not Yield the Fallout of the 2008 Market Crash

Re-envisioning mortgage Servicing as relationship banking will benefit distressed homeowners in a challenging regulatory environment.

LOS ANGELES, September 13, 2022–(BUSINESS WIRE)–Brace, the mortgage servicing infrastructure fintech, observes in its latest Mortgage Servicing Pulse that changes in Servicing regulations following the Great Recession, coupled with accelerated digital adoption during the Covid pandemic, have engendered a fairer, more transparent and stable mortgage ecosystem. However, the end of foreclosure moratoriums, forbearances and the dual threat of rising inflation and recession risk has many Servicers thinking about how to best assure a healthy portfolio.

With about only one quarter left in 2022, data from Servicer executives shows that economic concerns are on their radar and believe servicing guideline updates are “likely” on the way soon. Training mortgage servicing professionals to keep pace with the influx of demand has created additional costs and is noted to be the biggest challenge. But the vast majority of Servicers say they feel confident in their ability to make proactive decisions and manage regulatory risk amid new pressures for faster responses and resolutions.

“Constantly shifting expectations of regulatory bodies and the increasing number of regulatory developments can bog down Servicers, lengthen the loan modification process and create even more customer and market uncertainty,” said Nicholas Corpuz, Head of Compliance at Brace. “Looking forward, the ability to keep up with the complexities and challenges of the regulatory environment will be a key component to avoiding a future housing crisis. The fact we are starting where we are now bodes really well—and it could be that a consumer-first approach to Servicing is what pulls us back from a more dire situation.”

Brace also interviewed homeowners who have endured the loss mitigation process themselves within the last 15 years. Many agree that lessons learned from the 2008 housing market crash combined with that of the Covid pandemic helped to deliver higher standards for customer service and high-quality human interactions. Response data also shows homeowners felt a clear distinction with the increasing adoption of digitized customer experiences by Servicers. The greatest impact on homeowners has been a Servicer’s ability to deliver workout options in a window that fits within 60 to 90 days when previous processes used to span 18 months or more.

Despite advancements in digital mortgage servicing, Brace’s interactions with homeowners and mortgage originators point to a lack of education regarding consumer servicing rights. While relationship banking improves the interaction process, the mortgage ecosystem, as a whole, may still be falling short when communicating servicing support options. Many consumers Brace interviewed said they had to reach out to third-party housing agencies for answers or support concerning their rights.

“Not only can digitization benefit Servicers by helping them keep up with the challenges and complexities of the regulatory environment,” said Chris Eriksson, VP of Sales at Brace, “but it can also be leveraged to fill communication gaps that can proactively serve homeowners and strengthen Servicer-investor relationships.”


Brace will present at the American Banker Advances in Tech Fall Demo Event on Thursday, September 15, 2022 at 2:00 p.m. ET / 11:00 a.m. PT. The presentation will include a showcase of Brace’s trailblazing innovations that address the need for Servicers to be proactive and anticipate the developments that lie ahead. The demo event will include a live Q&A. To register, visit the Advances in Tech web seminar page.