Beyond the Call Center: Preemptive Strategies to Drive Loan Repayment
By: Nadim Homsany, CEO, EarnUp
Many homeowners continue to worry about making their next mortgage payment as the economic impact of COVID-19 endures. They are turning to their servicers for help in high numbers, causing an increase in operational demands for servicers who are already facing slim margins and limited liquidity.
The current model for providing services to a borrower – inbound and outbound call centers – without real-time access to borrowers’ financials is typically inefficient and often provides a poor customer experience. Forward-looking mortgage servicers are looking for innovative ways to efficiently allocate resources to combat rising call center volume and meet consumer expectations.
When you can make more accurate predictions of which customers are likely to struggle, you can operate your call centers more intentionally and efficiently. Instead of a one-size-fits-all approach, you can differentiate your communications based on a borrower specific risk levels. By preemptively connecting with higher-risk customers, you can take actions to prevent delinquencies from occurring. At the same time, access to real-time data can help servicers improve the quality and efficiency of inbound customer calls and inquiries.
Challenge of increasing call center volume
Millions of homeowners contacted their mortgage servicers last March to request forbearance plans, driving a spike in call volume, based on data gathered by the Mortgage Bankers Association in April. Servicers continue to struggle with speed to answer calls, call length, and abandonment rates.
At-risk customers are most likely to call their servicer. Nearly half (44%) called in the last 12 months vs. one quarter of low-risk customers. They also call more often – 3.15 times vs. 2.54 for low-risk customers. Calls from high-risk customers can take longer to resolve and have more at stake.
There’s a good chance your inbound call volume and call complexity will rise in the coming months. As forbearance periods end, high-risk customers will have questions about their options and rely on servicers for suggestions and resolution.
It’s hard to make good financial decisions when you’re overwhelmed
Call volume not only impacts operational cost and customer satisfaction rates, it also impacts your financial risk.
One concern is that when agents are overwhelmed by customers needing support, they may be in a rush to resolve calls quickly and may make suboptimal suggestions. Failure to fully understand an individual caller's situation, and rush to a resolution, may lead to less-than-ideal workouts being presented and chosen.
To keep pace with call volume, many mortgage lenders are bringing on outsourced, possibly offshore, call center agents. These additional resources can help to answer calls, but it takes time to integrate systems and train agents before you can begin to scale. Finding talent can be difficult and third parties may not have data or expertise to offer your borrowers best-fit options.
From reactive call centers to proactive support
Servicers that can anticipate borrower needs can reach out to those who may be struggling before they contact the call center. By understanding the status of a borrower’s financial health, agents can save time on a call by offering personalized solutions. Regardless of whether an employee, or an outsourced call center agent, is accessing that data, they can make decisions with confidence.
You can make the shift to a proactive approach with a three-step process:
Anticipate – Identify warning signs that indicate consumers will struggle to repay loans, such as changes in their employment status, income or missed bill payments.
Differentiate – Segment accounts into groups, such as low-risk, medium-risk, high-risk, based on their financial health, loan type, and payment history.
Communicate – Tailor outreach frequency to match risk level. For example, high-risk customers might receive high-touch phone calls from experienced agents while low-risk customers might engage with email, text, or other cost-effective channels, such as self-service portals.
ROI of a proactive approach
For some servicers, a differentiated approach to customer outreach doesn’t necessarily reduce the number of live agents. Instead, agents can use their time more effectively to assist customers with complex cases that can’t be supported in a low-touch channel.
It’s critical to balance call center cost-cutting and efficiency goals with customer experience. Mortgage servicers currently have lower customer satisfaction scores than almost any other industry, according to J.D. Power. It’s no wonder that, given the choice, only 17% of borrowers plan to return to their same mortgage servicer for another loan, says the MBA.
When consumers feel understood and supported, they see their servicer as a partner and an advocate for their financial health. As high-risk customers get back on track, they’ll be more likely to remain with you for future loans.
EarnUp helps servicers shift to a proactive approach
Building on our success working with consumers to facilitate flexible, automated loan repayment, EarnUp has added a component to our payments platform to offer borrower-level insights to enterprise lending institutions. Via EarnUp’s GetAhead Dashboard, servicers can access accurate, up-to-date data to evaluate the financial health of their borrowers so you can focus your outreach where support is needed most. EarnUp provides visibility on borrower status and raises flags before payments are missed, so you can preemptively identify high-risk customers.
EarnUp is a one-stop shop for customers, providing customizable solutions and exceptional service, leading to increased brand loyalty.
EarnUp enables flexible payment models, such as syncing debits with paydays, to help consumers budget and ensure payments are made on time.
Regular, personalized digital communication through the EarnUp platform improves transparency, customer satisfaction, and likelihood of repayment.
A self-service portal empowers consumers to take control of their payment options and make adjustments without accessing a customer service representative.
We’re here to help our servicer partners increase call center efficiency, communicate effectively, and ensure more consumers successfully repay their loans. To learn more about how EarnUp can help servicers and get a personalized demo of our solution, get in touch.