Sapan Bafna, a senior leader, Advanced Delivery Engines at CoreLogic, recently sat down with Suresh Ramakrishnan of Mortgage Media at the MBA Servicing Solutions Conference in Orlando, Florida to take a deep dive on CoreLogic’s offerings, compliance, servicing and automation, standardization and more.
Here are some of Bafna’s comments from that discussion.
Within the Advanced Delivery Engines, I have some very specific solutions, integrated point solutions. For example, the doc services business unit which is under me, which is all about lien releases, assignments, and document retrievals which is used by servicers when the loan is paid off or MSR transaction happens. The other area we also support is on specialized data audits.
We also have compliant Print and Ship Solution for the industry. And then I also have a loan modification platform called the IntelliMods. So, even though defaults are low, that platform is a very efficient, nimble solution we can implement for our clients, gives them all the standard waterfalls for loan modification, for all kinds of agencies or FHA, VA, USDA loans as well as disaster waterfalls and all of the documents, fulfillment, all the way up to recording.
There is a realization that compliance pressures will pick up again. So, you of course cannot lose your guard on compliance. You have to stay compliant, you have to stay nimble, and you have to stay efficient because otherwise margins are way down in the servicing. There is a real risk with the fallouts with the MSRs, but at the same time there is also a realization that we are going to hit a bottom with the rates and you need the steady income servicing provides. Servicing provides a real critical part of the whole mortgage life cycle. It needs to continue the innovation journey.
Servicing and Automation
I really think robotics (RPA) will play a more important role on the servicing side. On the originations, of course there is AI and ML. There are more pieces around the origination side because RPA is important there as well, but things have to happen very fast on the origination side versus servicing is more steady.
While traditional automation is always good, more data is always good to retain servicing versus losing it because just because of a quarter percent or half a percent less interest. Those are some of the technologies we are trying to bring and reeducate our servicers. The efficiency game is robotics in my opinion for the industry. And then just how to do more with less, pretty much.
Look, the chatbots are not 100 percent for all the right reasons. They have become better, but they’re not 100 percent. So, they are good for entry level kind of information. But we think the number one reason why calls come in into a servicer shop is escrow and you just need to get that question answered by the expert versus a bad experience. So chatbots, I’m sure in coming years, will be at a point where they will be more human like.
It’s all about workflow solutions and the creativity from our servicers as to how best they can utilize the data to make their operations efficient. The industry has not traditionally been very strong in utilizing the promise of an upsell and cross selling on the servicing side. The game becomes am I the lowest cost provider, am I doing it most efficiently and am I doing more with less, meaning am I supporting more loans with less staff.
Standardization helped a lot with some of the standard data elements or standard documents. It has its pros and cons because in that earlier period, before this standardization and automation, some banks thought that managing default or specialty loan handling was their secret sauce. So, they wanted to keep it in house. Now, of course, some banks were really good, some banks were not so good, but they thought they were good. So, when standardization happens, I’m sure that someone who thought they were really better and maybe in actuality they were better…did not like it. But overall I think it’s the right thing for the industry. It has definitely brought down the cost and if the next default cycle was to happen, I think the industry is mostly ready. We as vendors absolutely ready to support the servicers.
I’m sure lessons have been learned because they have been learned the very hard way by a lot of people, right? I mean, options wiped out for them. The same people did recycle in the industry, but they lost something they really loved in their previous companies. So, there has been an impact. I think these last 10 years are not going to be something which people are going to forget. I do hear people on both sides, lot of new techs, call them FinTechs, the new companies who are out there, they don’t appreciate compliance and the risk of not being compliant as much because everything for them is dollars and cents, you know for us to do this check it’s $1 extra, 50 cents extra, we are just going to take our chances, we’ll deal with it if something comes.
And I think that’s what precipitated the crisis last time, everyone thought that somebody else, the next person is going to do the QC. I’ll just throw it to them and we just passed on the ball to the next person just to find that nobody was really focusing on the quality, on the data.
They don’t have to worry about margin. They are after growth because their valuation is driven by growth. It’s good for the industry that new money is coming and that is bringing some automation. But at the same time, if they are not appreciating the compliance side of the world, it can hurt the industry more.
Content has been edited for length and grammar.
Listen to the full interview.