An old adage states that it is cheaper to retain an existing customer than to source a new one. For years, mortgage servicers have tried to do a better job of retaining borrowers in their portfolio, but lately, for many, the efforts have been futile.
Servicers generate revenue by performing servicing functions. Retaining the servicing customer generates the anticipated revenue. Setting up a new loan incurs costs upfront that is amortized over the period in which the loan is serviced. Losing that servicing opportunity leads to loss of revenue.
In order to increase retention levels, it’s critical that servicers have clear communication in place to establish a relationship with their borrowers – beyond sending a monthly billing statement.
Clear and timely communication without any slippages
Communicating with the customer provides the opportunity to discuss a customer’s concerns and to correct miscommunications which may preclude complaints. This is especially important because the CARES Act was passed quickly, without full implementation details. This meant that borrowers had many questions due to initial uncertainty about how forbearances would be implemented. Even if as a Servicer, you do not have many details, your main message could be that you’re still awaiting details but sending that message can build trust and demonstrate that you’ve got the borrowers’ best interests in mind.
The end goal should always be to obliterate borrower’s uncertainty and reduce their stress. After all, brand loyalty is not just built-in good times. In fact, showing borrowers you’ve got their back in a crisis is one of the best ways that servicers can demonstrate a long-term commitment to their customers.
The J.D. Power U.S. Primary Mortgage Servicer Satisfaction Study survey finds that 85 percent of highly satisfied customers (overall satisfaction scores of 900 or higher) say they “definitely will” recommend their mortgage servicer and 74 percent say they “definitely will” reuse their servicing provider for their next home purchase. Providing an outstanding mortgage servicing experience can generate high levels of advocacy and loyalty.
Customer satisfaction and engagement are critical for servicers to build lasting relationships and retain clients.
We at PrivoCorp, ensure that we understand the needs of our servicer clients and communicate proactively with borrowers to provide timely services. Based on our experience of working with customers across the country for over 10+ years, our servicing clients do rely on us to manage their loan portfolios.
You can get in touch with us at firstname.lastname@example.org