December 14, 2023
MortgagePoint Magazine tapped Toby Wells, President of Cornerstone Servicing, and other mortgage industry executives for their perspectives on trends that reshaped the market in 2023 and what may come in 2024. Check out the December 2023 edition for the full story.
MortgagePoint Magazine: What’s in store for the housing market as we enter 2024? What are some of the headwinds the industry will face in the coming year?
Toby: “Even if interest rates ease, the total cost of homeownership will continue to rise due to inflation, rising property values amid low inventory, higher property taxes, and skyrocketing insurance premiums in some regions. With rising homeownership costs, combined with the end of COVID-era relief programs, mortgage delinquencies are expected to tick upward from the historic lows of 2023. Organizations with the agility to evolve according to homeowners’ needs will be positioned for growth in a more challenging environment.
Servicers are already feeling pressure to ramp up their support for homeowners as more household budgets are squeezed. Some are beginning to step up their default operations to prepare for incoming issues, but those who did this proactively in 2023 will be in a better position to handle potential delinquencies. This has been a priority for my team at Cornerstone Servicing, where we are expanding efforts to help homeowners stay on track with their mortgage payments.
For example, we’ve coupled continuous monitoring of escrow activity with timely engagement to soften the impact of year-over-year changes in escrow activity on borrowers. We are going the extra mile to help homeowners understand why, how, and when their mortgage payment may increase due to higher tax or insurance expenses, so they have enough time to prepare before a payment change takes effect. More broadly, this higher level of support and partnership can help homeowners keep their mortgage healthy throughout the loan term.”
MortgagePoint Magazine: Are there any trends in technology you are witnessing being employed by the industry to streamline operations?
Toby: “For mortgage servicers, cross-platform data integration is becoming more important, as machine learning and automation present opportunities to improve the customer experience, operational efficiencies, compliance, reporting, and everything in between. For our company, having a fully integrated technology platform has helped us see the cumulative value these tools offer for both homeowners and our subservicing clients.
On the default side, for example, a module within our homeowner portal guides customers through the mortgage assistance application process step by step. If they have trouble finding or completing the application, they can tap our virtual assistant for quick help 24/7. Integration with our loss mitigation system allows us to automate processes that match homeowners with assistance plans based on their unique situation and mortgage. Our claims and loss analysis technology, which identifies and prioritizes advances eligible for reimbursement and processes claims, integrates with our loss mitigation and foreclosure systems as well as our system of record. In addition to timely and compliant claims submissions, this degree of data integration supports full transparency for our subservicing clients with real-time analytics and reporting. When technologies across a servicing platform talk to each other, AI offers unlimited opportunities to streamline and improve processes across the board.”
MortgagePoint Magazine: As the need arises for skilled professionals in the mortgage space, what incentives are being offered to retain these valued individuals and attract them to your company?
Toby: “Competitive salaries, benefits and perks remain important, but team member retention starts with finding the right people. Filling our organization with team members who exemplify Cornerstone’s culture of service and excellence helps us maintain a happy and productive environment. When team members want to come to work and be part of the team, they stay collaborative, and engaged. From there, we champion team members who demonstrate Cornerstone’s mission to make a positive difference for others by recognizing their successes and investing in their growth. Offering ongoing opportunities for mobility and incentive programs structured around our shared, organizational goals is very impactful for us.”
MortgagePoint Magazine: With household savings rates below normal levels, student loan payments resuming, the price of oil on the rise, and lending standards tightening, how will these factors play into the foreclosure landscape?
Toby: “Many factors will strain household budgets and place more homeowners at risk of default and foreclosure. In general, mortgages originated prior to 2023 under higher lending standards will be at lower risk, as rising property values add to their equity. In contrast, 2023 was marked by peak interest rates and relatively less stringent underwriting standards. Borrowers with less excess cash to cover the rising costs of homeownership will be more likely to struggle with mortgage payments. Further, those with high loan-to-value ratios mean there is less equity to leverage if times get really tough.
The upside—mortgage servicers can make a positive difference for homeowners with proactive engagement and personalized support. The key is building relationships with homeowners long before a first missed payment. By doing so, homeowners will be more likely to entrust their servicer for help in the face of hardship. Also, tech-savvy servicers will have more data to detect hardships early and provide relevant resources to help them stay on track.”