Increasing retention with an exceptional customer experience

Even with the recent interest rate drop initiated by the Federal Reserve, many homeowners are reluctant to give up mortgages with rates that can be several percentage points below current rates. As of spring 2024, ICE Mortgage Monitor data found that homeowners who give up their current rate to move across the street to an equivalently priced home would see a nearly 40% increase in principal and interest. This can explain why many homeowners are staying put in their current properties — creating what is called the “lock-in” effect.

What does this mean for servicers? Fewer new mortgage customers are coming in the door, and retaining the customers you have is more important than ever.

One way servicers can help retain customers is by leveraging self-service digital capabilities that provide homeowners with an exceptional homeownership experience. Servicers need to take advantage of this unique opportunity to create long-lasting relationships, which will benefit them once the housing market eventually rebounds.

Here are three areas that servicers can explore to help retain more customers.

Helping homeowners help themselves

Whether homeowners are staying put or ready to sell, they expect comprehensive, self-service tools that can help them understand the potential of their home. They want instant, easy access to loan and property-related information that:

• Informs them of their current loan status
• Allows them to explore options and perform “what if” scenarios
• Presents them with options for building home equity more quickly
• Details the benefits (or drawbacks) of paying down or refinancing their loan

The right self-service technology can also let your customers see how their homes stack up against others in their neighborhood. For added retention-building value, servicers can offer tools that allow their customers to view comps of recently sold homes in the area, resident demographic data, and details about local schools. The more information at their fingertips the better.

Plus, advanced digital capabilities — like in the ICE Servicing Digital^TM solution — can let customers make a payment; see previous payment activity; review information on taxes and insurance; and view loan details, such as interest rate, term and PMI. When a customer’s day-to-day loan maintenance needs meet highly personalized home and neighborhood information, it can lead to an exceptional customer experience — which can open new opportunities for retention and growth.

Managing housing wealth in an equity-laden market

ICE data has found that nationwide, homeowners’ tappable equity has risen to a record $11.5 trillion, and that three in five homeowners have at least $100,000 in equity to borrow against. That means that home equity is a strong area of opportunity to serve your customers in an otherwise challenging market.

The right technology can help customers visualize and understand their equity potential. For instance, do they know that HELOCS can provide them immediate access to funds for big-ticket purchases in cases like a natural disaster or funding college tuition, without requiring them to give up the record low rates on first-lien mortgages? Do they know how much equity potential they have in their current home? Digital solutions are available that can provide customers that information, and can also help them understand the flexibility their home’s equity offers should they enter into loss mitigation. Strong equity cushions can open additional opportunities for servicers to help homeowners return to making regular payments.

Servicers can better help their customers take advantage of their equity potential with a powerful servicing system that handles home equity loans on the same platform as mortgages, while following applicable regulations and supporting compliance.

Knowledgeable, expedient customer service

Regardless of the market, customers are far more likely to be happy when servicers deliver a helpful, informed and efficient support experience.

Servicers can leverage a comprehensive customer service solution that helps agents reduce call times by providing relevant information about the customer’s loan in a single location, along with account information and background on previous engagements – no matter which agent took the call. Customers will no longer have to repeat information every time they make an inquiry, helping agents resolve more issues in a single call. This helps support the type of exceptional customer experience that makes homeowners want to keep you as their servicer.