Team onboarding, compliance and digitization present major headwinds
LOS ANGELES – (May 3, 2022) Top mortgage originators continue to announce steep staffing cuts in response to sliding volumes. The step-change decline in mortgage jobs comes after lenders spent much of 2020 and 2021 staffing up. The post-pandemic effects of inflation, rising interest rates, low housing inventory and abnormally high home prices have the mortgage market experiencing the largest quarterly decline since 2003. A number of mortgage origination professionals are considering a move to another position or a completely different industry.
Brace, the mortgage infrastructure fintech, observes in its latest Mortgage Servicing Pulse Report a massive forthcoming boon in Servicing. The industry is expected to see a rise in the importance of mortgage servicing rights (MSRs) and options to keep homeowners in their homes. Policymakers, investors and mortgage servicers all tend to agree that increased home retention is important for equity and sustainability in housing finance, and onboarding servicing teams will be the first step in encouraging a more performant market.
“Each quarter, Brace sits with the top servicers to discuss industry impacts, and we’re finding that many individuals in mortgage origination have the required qualifications and licensure to move into servicing divisions,” said Chris Eriksson, Vice President of Customer Development at Brace. “Digital infrastructure will take the pain out of a shift from origination to servicing. Adding new staff members quickly and compliantly to aid current team members who are already spread thin is the most critical component at this time.”
Other customer insights include:
Technology solutions put in place during periods of crisis should be evaluated. In many cases, softwares may not be fully integrated with other systems yet and require manual work that should be automated. Having a single place for daily workflows enables the entire mortgage ecosystem to consistently perform better throughout all fluctuations in market cycles.
It is predicted by 2025 that 36.2 million Americans will be working remotely, an 87 percent increase from pre-pandemic levels, according to Upwork. Distributed teams will soon be the norm rather than the exception. Technology unifies people, and positive employee experiences are critical to accelerating transformation across businesses.
Servicing will inevitably go down the same road to digitization as origination divisions, but the transition has been slow. Customers are in need of support through this volatile period and are looking for a connected infrastructure that will embrace the efficiency that an end-to-end digital experience can bring. Customer engagement is essential for all players in the mortgage industry to survive in this current environment; they must be able to achieve economies of scale and rationalize their operations.
“Digital transformation is no longer a choice—it is necessary to keep pace in today’s changing world,” said Jose Morin, Vice President of Servicing at Brace. “Loan servicing plays a vital role in the health of the mortgage industry. With the mortgage industry now catching up to broader trends in banking and shifting its focus to customer engagement and satisfaction, the elements that fulfill homeowners’ expectations first are going to be clear winners in this evolution.”
The Mortgage Servicing Pulse provides periodic market observations from Brace. To learn more and subscribe, visit brace.ai.
Brace engineers the connected mortgage infrastructure for every stakeholder—consumers, servicers, lenders, and investors—to intuitively maximize assets and unlock the financial performance for every home. Brace’s flagship product, the Default Management Platform, supports the end-to-end process for the decisioning of a loss mitigation application and digital mortgage servicing experience in a secure, compliant, and consumer-led environment. Brace’s customers include a number of the top ten largest U.S. mortgage servicers. Visit brace.ai to learn more.