Most disruptions that change our personal or professional lives are limited by geography, business sector or specific setbacks. Many, while acutely felt and often accompanied by tragedy, are of limited duration.
We recover from them and revert back to what we see as normal. A wildfire or flood, for example, can be a devastating disruptive force that we rebuild from when the flames have died down or the water has receded. It is only when we recognize specific disruptions as requiring long-term change that we address root causes like a warming climate.
The pandemic has been, and continues to be, one of those disruptive forces that is widespread and felt by almost everyone. In a business sense, the pandemic has been one of those disruptive forces that has touched every industry on a global scale.
We saw that disruption in many ways that were obvious. We watched as cruise lines and airlines virtually disappeared at the height of the pandemic. We saw our favorite coffee shop or restaurant close without hope of returning.
We watched as our office doors were shut, and we learned to be surprisingly productive from home. We saw our children adapt to remote learning. We found that we were adaptable and that planned changes in business practices to make us more efficient would need to be accelerated.
That need for accelerated change is rarely more apparent than at those companies whose business functions were once described as “the back office.” At Cenlar, we service mortgages for some of the largest and most respected financial institutions in the world, as well as those located on local Main Streets. All of our clients and their homeowners are equally important.
In almost every residential mortgage we service, the underlying property is likely that family’s primary financial asset, as well as a place they treasure. Any mistake in the management of such a loan is justifiably magnified.
Most borrowers, after all, begin acquiring a mortgage in a process they may see as fraught with anxiety and tedium. They remember sitting at a settlement table signing a baffling array of documents that are then stored somewhere by people they have never met.
For too long, mortgage servicing made only tiny incremental steps in advancing servicing processes. After all, the vast majority of mortgages perform to expectations.
The pandemic changed those expectations and dramatically accelerated the need for investment in both technology and people. Suddenly, hundreds of thousands of borrowers were in danger of default. When defaults or near-defaults occur in the tens of thousands over a short period of time, the task can be overwhelming. If that represents the “bust cycle” of mortgage servicing in a pandemic, the “boom cycle” can be equally challenging.
The federal government, quite correctly, initiated forbearance programs that have saved thousands of borrowers from losing their homes. Every one of those loans in forbearance requires special servicing attention.
In another part of the boom cycle, the Federal Reserve deliberately drove interest rates to record lows to stimulate the economy. To the creditworthy, new homes became much more affordable. To those with existing mortgages, the lower rates initiated a spectacular refinancing boom.
While the real estate market does experience boom and bust cycles, the pandemic brought them simultaneously.
At Cenlar, we have a team of professionals dedicated to the careful servicing of these loans, many of them now working remotely. What the pandemic brought into focus is that simply adding more people cannot be the long-term solution.
What is required is an investment in technologies and processes that better serve both our clients and the homeowner.
That means the adoption of, and investment in, advanced technologies like Robotic Process Automation (RPA), speech analytics, artificial intelligence, machine learning and process mining that will make us a far more efficient and advanced servicing organization.
These are not wheels that we are inventing or reinventing. Nor are they technologies that we expect to adopt and then sit back in satisfaction. We know from our careful research into best practices that this kind of investment cannot have a fixed goal as these technologies evolve even as this is written. We know that RPA alone, with its demonstrated value, cannot be used in isolation.
What we’ve needed — and have invested in — are technologies that recognize each other as part of a comprehensive toolbox of alternatives and decision management systems that will form the epicenter of a solution-driven company.
What we promise is a tech-forward business strategy supported by people committed to their craft. We want systems that are not only reliable but agile enough to adapt to the next generation of infrastructure services. We want to be able to preempt evolving threat, achieve data ubiquity and thrive in an architecture of advanced analytics.
We know as well that these investments must bring technological change that every one of us is willing to accept. We are building a company where best practices are embraced rather than enforced.
Like every organization, the pandemic has made us different. We expect that it will also make us better.
The Pandemic as Change Agent
