Servicers can prepare for a potential recession by putting the right tech and people in place
HousingWire sat down with LoanCare Chief Operations Officer Mike Blair to discuss the company’s growth, its approach to servicing and the best way to prepare for a potential downturn or recession.
HousingWire: LoanCare has witnessed significant growth this past year as the company’s size and overall market share have increased. What do you attribute this tremendous growth to?
Mike Blair: In the past year, we have grown our servicing portfolio by more than 50 percent. We are currently managing approximately 1.7 million loans which ranks us second among all subservicers. To some extent we have been the beneficiary of the consolidation that is taking place in the market, earning some sizable portfolios with our proven performance and long-standing history in the industry.
Our approach to subservicing, which focuses client and borrower experience, is a powerful differentiator in the market and one that appeals to today’s more sophisticated MSR investor. Finally, we are in a unique position to take advantage of this opportunity with enhanced technology, giving us the ability to scale our operations to handle the increased volume while improving our delivery quality.
HW: As you continue to help the company rapidly grow, how do you plan to maintain consistency for your clients?
MB: The right people, the right processes and keeping ahead of the market. We opened a fourth call center location in the second quarter of 2019 to help address our rapid growth. Given how competitive the labor market is for servicers today, being able to expand our geographic footprint and offering attractive compensation and benefits has been critical to bringing in the level of talent we need now and into the future. We’ve also invested in technology to enhance the client experience with the creation of new data warehouse and by enhancing the online borrower experience for desktop, mobile and app interfaces.
HW: What is LoanCare doing to improve the borrower experience?
MB: We are investing heavily in technology that enables us to roll out enhancements to our web and mobile interfaces in months, not years. We believe that in order to be a leader in the servicing space, our technology must continually evolve, not stay static. We provide support to over 1.7 million loans, and we understand the increasing preference of borrowers to interact digitally via their channel of choice.
So, we’ll be launching a completely new web and mobile experience in 2020 which will fully automate the borrowers’ ability to manage their loans with new self-service options. Importantly, we are adding significant security and privacy upgrades to protect borrowers. We are also reviewing and enhancing our telephony package. Finally, we are constantly analyzing borrower surveys for insights that provide a roadmap for improvement opportunities that will drive further customer engagement and loyalty.
HW: Looking ahead in the market, what do you see subservicers doing to prepare for a potential downturn/recession?
MB: The decade that just closed is the first in recent memory that didn’t include a recession. So many observers believe we’re due for one, if not this year because it’s an election year, soon. Although no one can predict the “when” of a market downturn, LoanCare and other prudent servicers are always working under the assumption that it’s more near-term than somewhere far outside of the horizon.
The best way to prepare for a sharp increase in delinquencies and eventual foreclosures is to have the right people, partners and technology ready, so you can be proactive, rather than reactive. We are actively managing our delivery platforms to be able to adjust to changing market conditions and to scale our operations, even for worst case scenarios like the industry dealt with a decade ago. As a division of ServiceLink, one of LoanCare’s unique advantages is we’re already vertically integrated with best-in-class default capabilities.
HW: Since joining the company, how have you watched LoanCare deliver on its commitment to customer service?
MB: I am personally excited to be part of what is happening here at LoanCare. Not only our management team, but every employee understands how critical the client and borrower experience are to our success. We have set the highest goals to deliver best-in-class service and the features and enhancements scheduled for 2020 will clearly demonstrate our progress towards that goal.
HW: Now that we’re officially in the new year, what are your key takeaways on the industry right now and where do you see LoanCare growing moving forward?
MB: We may very well see additional consolidation in the servicing space given that it is a low margin/high scale driven business. At the same time, we have to be ready for unforeseen forces, like last year’s mini-refinance boom. Very few forecasters saw it coming, but it significantly challenged our industry. Usually when refinances spike up, purchase is slow, giving originators and servicers a chance to catch up. But that didn’t happen in 2019, so both sides of the industry were running at top speed and competing for talent.
Fortunately, LoanCare was positioned to help clients with their retention programs while also being large and nimble enough to take on additional loans in their portfolio. LoanCare’s key to continued growth is the company’s ongoing commitment and dedication to operational excellence and constant improvement. This translates to a continued eye towards ongoing technology investment while identifying opportunities to improve the customer experience through back office administration. We’re very lucky to be part of a company that totally understands the industry, shares our commitment to technology and is willing to continually invest in our success.