This article originally appeared in the August 2025 edition of MortgagePoint magazine, online now.
Economic uncertainty, inflationary pressures, and escalating insurance and tax costs are pushing many homeowners to the financial brink, even as national delinquency numbers appear relatively steady. For mortgage servicers, preventing delinquency means acting before borrowers fall behind, and doing so with empathy, transparency, and technology that meets customers where they are.
That was the central theme of a recent MortgagePoint webinar, “Proactive, Not Reactive: Engaging Borrowers Early to Prevent Delinquency,” sponsored by Selene and featuring an expert panel including:
- James Braxton, VP, Customer Resolution, Servbank
- JT Grubbs, EVP, Head of Servicing, Selene Finance
- Michael Merritt, SVP, Customer Care & Mortgage Default, BOK Financial
- Courtney Thompson, EVP, Mortgage Servicing, CMG Financial
Here are five big takeaways from this exclusive conversation on the future of borrower engagement.
1. Economic Pressures Are Multiplying
Inflation and higher costs for essentials like groceries, insurance, and property taxes are reshaping the risk landscape, even for customers who appear stable on paper.
“Consumer debt almost every day reaches a new all-time high,” Michael Merritt said. “We’re seeing stresses across the board from consumers, and in different ways. It’s not just debt: housing materials are more expensive, and housing repairs are more expensive. That’s leading to higher taxes and insurance that are impacting customers in ways that we haven’t seen before. … Customers today are dealing with different forces than we’re used to seeing traditionally.”
Merritt says these pressures are particularly acute for some FHA borrowers. While overall delinquency rates may look steady, Merritt warns, the numbers can hide “some icebergs” below the surface.
Courtney Thompson added that uncertainty is fueling consumer anxiety.
“There’s a general consumer trust crisis. If you were lucky enough to buy a house in ’17, ’18, ’19, you’re looking at a very different monthly payment scenario than if you’re trying to get into a house today.”
2. Building Trust Is Non-Negotiable
When a homeowner calls their servicer, the conversation isn’t just about dollars; it’s about trust. That level of trust often determines whether a homeowner reaches out for help or hides until it’s too late.
“Transparency … is the biggest foundation when it comes to building trust,” said James Braxton. “We have to start with empathy and precision.”
“No one takes out a mortgage [expecting] to fall behind. No one takes out a mortgage expecting to lose a job, lose a spouse,” Merritt said. “The most successful call I ever had in my career ended in a deed-in-lieu,” he continued.
“I could never keep them in the house, but I got them in the best situation for them. You’ve got to be willing to stay focused, have those conversations earlier, and never forget that it’s someone’s home. There’s nothing more valuable to them. Whether they’re ready to have that conversation or not, it’s our job to draw them out and get them into an effective conversation.”
Thompson echoed that sentiment: “At the end of the day, this is a trust and a shame game. If they don’t trust you, they’re not willing to tell you their secrets. [Sometimes] they’re not willing to tell their family members their secrets about their financial circumstances. [You need to be able to convince this person] that you are here to help them, not throw them out of their house.”
Ideally, building that sort of trust relationship starts early, often long before a homeowner misses a payment.
3. One Shot: Why Early Engagement Matters
Waiting until 60 days past due is no longer an option when it comes to helping homeowners achieve the best possible outcomes. The first meaningful interaction could happen during an escrow inquiry or a simple customer service call, and that single touchpoint could define the borrower’s willingness to engage going forward.
“When we talk about proactive, we need to treat each customer as high-risk because we don’t know exactly what’s going on in their situations,” JT Grubbs said. “When we talk about what doesn’t work, like waiting or being patient or expecting to be able to throw the hammer of the toolkit, which used to be a modification in later-stage delinquencies and helping customers stay in their homes, those same opportunities don’t exist today. You get one shot, right? Based on generational tendencies, that one shot could happen in any channel. That one shot can happen at any delinquency level.”
Merritt added, “Rarely is a current customer going to say, ‘I can’t make my next payment.’ They’re still in a little bit of denial. So, you might ask, ‘Why did you call about your escrow account when it’s six months away from your analysis date?’ Oh, it’s because they
know they’re not going to be able to afford it, right? You’ve got to make sure you take that opportunity. You have to be consultative from the very beginning.”
Braxton reinforced the point: “That one shot may come when the customer is calling in about an issue that has nothing to do with the delinquency. That interaction that we have with them, the way that they feel after that phone call, the way that they feel about our level of service or our appreciation, that builds trust.”
4. Meeting Borrowers Where They Are, Across All Channels
For some borrowers, the comfort of a voice on the line matters most. For others—especially younger generations—text or chat is the preferred mode of communication. The webinar’s panelists agreed: servicers must deliver consistently across all available channels.
“We’ve got to execute in all of those channels … and execute flawlessly,” Grubbs said. “Technology has moved so quickly. At no time before in this industry has there been such a gap from a technology standpoint, from the baby boomers down to Gen Z.”
Servbank’s Braxton underscored the importance of moving beyond compliance-driven messaging.
“We’re dealing with a lot of newer-generation homeowners, and we need to be able to meet them where they feel comfortable. If it’s a phone call, fantastic, but if it’s some other means of communication, we need to continue to embrace that as well.”
As Thompson noted, that includes reducing reliance on processes some might consider outdated.
“Whether we like it or not, the concept of sending paper through the U.S. Postal Service is still alive and well in mortgage servicing. Many mortgage servicers are still relying upon digital means, where these emails are going into junk email boxes. Understanding how the technology meets the customer experience is another level of training that is required in these call centers today.”
5. People, Process, and Technology Working Together
AI and automation are top of mind, but the panelists suggested that technology alone won’t solve the problem. The consensus was that servicers should invest in data organization, digital channels, and training.
“Invest in organizing your data and digitization,” Thompson said. “Otherwise, all these fun little AI widgets are just going to be widgets; they’re not going to be a deployable strategy that you can use across your operation.”
She added, “The best bang for your buck right now is not to go to another AI presentation, it’s to make sure you’re optimizing the use of the digital tools.”
Braxton emphasized the human element.
“Find the right people and make sure they have the right tools to do the right job.”
Merritt emphasized one crucial truth: “Never forget that every call that we have, someone’s home is on the other end of that line.”
