This piece originally appeared in the June 2024 edition of MortgagePoint magazine, online now.
Members of MortgagePoint’s Editorial Advisory Board share their insights into the trends and challenges shaping the industry landscape this month.
Michael Keaton is the SVP, Default Subservicing, for Ocwen Financial (now known as Onity Group). Keaton joined Onity’s Business Development Team in late 2022 to help grow the special servicing business. Before Onity, Keaton was the Chief Servicing Officer at Shellpoint Mortgage Servicing from 2012-2022. Before joining Shellpoint, Keaton held several executive-level roles at Resurgent Capital Services between 2002 and 2012, including VP of Mortgage Servicing and Recovery. He began his career at Wendover Financial Services, where he spent over 10 years, finishing his tenure as VP of Default Administration when Wendover was the nation’s largest servicer of subprime mortgage loans. Keaton joined the EAB beginning in 2024.
Q: What is one area where servicing should be focused on innovating or improving, and why?
Keaton: Servicers must ensure that they have a suite of technology options that meet the homeowner’s preferences, as well as the homeowner’s current situation. It’s important that we keep all forms of homeowner interaction useful and up to date.
If you had asked me 15 years ago if we would still be using IVRs (Interactive Voice Response Systems), I would have told you, “Absolutely not.” I would have stressed that surely all contact would eventually be happening via the internet, mobile phones, and texting. However, about 10 years ago, I changed my thinking on that.
Ten years ago, I realized that there would always be homeowners who want to make their payments over the phone and homeowners who prefer to get questions answered via IVR, as well as homeowners who are open to migrating to more modern communication channels.
The way homeowners prefer to interact with their servicer can depend greatly on the situation they are in. A homeowner might typically prefer self-service on our website, but if they have a question about why their taxes went up, they might want to speak with an agent for a more personalized answer. And they want to do it in 30 seconds or less!
Q: What problems do we need to solve as an industry?
Keaton: I’d like to see us continue to modernize the process of obtaining a loan modification. For homeowners who are comfortable with an electronic process, we should migrate to fully e-signed modifications that do not require any form of notarization. We use multifactor authentication when we log into online banking; we could use that same technology to confirm that I’m homeowner who executed the modification document.
This type of wholesale change will likely require standardization and coordination between Fannie, Freddie, Ginnie, FHA, VA, and USDA. It will also require the industry to pressure local county recorders offices to adopt standardization.
Q: How is your team navigating the high costs of being a mortgage servicer?
Keaton: AI and other technologies, when done correctly, can both reduce servicing expenses and enhance the experience for the homeowner. We have all had at least one torturous experience with AI done wrong—AI that is designed to assist the company and not the consumer. Consider what we encounter when trying to resolve an issue with a utility, a cable/internet provider, cellphone company, or gas/electric company. After “talking” to their AI bots (often shouting/cursing at them because the AI doesn’t understand the question or isn’t programmed to deal with the issue), you get queued up to wait in another line to speak with an agent.
A better approach is to offer AI chatbots and textbots that (1) fully resolve the issue, and (2) give the homeowner the ability to opt-out at any point. For example, if I’m calling to get a copy of 1098 statement from 2024, then the bot needs to be able to completely fulfill my request. It isn’t enough for the bot to confirm that I want my 1098 from this year—it then needs to email me the document while I’m on the phone.
AI that truly assists the homeowner holds great potential to also reduce servicing costs.
