The U.S. mortgage industry is nothing if not competitive. The 2022 HMDA data shows 4,460 active lenders—most of which are characteristically persistent (or optimistic), refusing to exit the business despite historically brutal conditions (not exactly a “soft landing”). The result has been an imperative for true “competitive advantage,” which can take many forms: innovation, quality, development of proprietary methods, even a relentless, “won’t lose” culture.
But cost leadership stands as the most effective advantage for any mortgage operation because of the correlation between new loan manufacturing and servicing costs and the ability to compete effectively for new and returning customers. In short, cost advantage is pricing advantage.
Every basis point matters in mortgage servicing. Fortunately, modern servicing technology can automate manual processes and use data and AI to save money across the entire loan lifecycle—all while
delivering better experiences to your servicing teams and borrowers.
By transforming servicing operations from largely manual to exception-based processes, servicers can have their teams hyper-focused on high-value customer interactions and exceptions, rather than time-consuming, routine tasks. Modern servicing platforms also keep servicers current and compliant without system overhauls as regulations, policies, and markets constantly change.
Is it possible for servicers to operate at $180 to $200 servicing cost per loan, compared to the MBA industry average of $250? Let’s take a look.
How Real-Time Data & AI Transforms Servicing Operations
A unified platform with cloud-native architecture is the foundation for leveraging AI and Large Language Models (LLMs) in mortgage servicing. The promise of AI in mortgage servicing depends on single-source, real-time data across the entire performing and nonperforming lifecycle.
Enter Dara AI | Docs—one of Dara by Sagent’s first-to-market components—which transforms unstructured documents and extracts data (including stamps and signatures) to enable efficient loan movement for loan boarding at scale. Other use cases include digitizing income calculations with mortgage-specific AI for salary income from W2s and paystubs, as well as automating claim filing utilizing extracted invoice data for reconciliation.
In a real client example, Dara AI | Docs saved an estimated 34,155 people hours in just one MSR bulk acquisition (over one hour per file). Dara AI | Docs also reduced the buyer’s exposure to unrecovered corporate advances, identifying $6.3 million of corporate advances that were not recoverable due to missing invoices in the data file.
Embracing Short-Term Discomfort for Long-Term Gains and Scalability
While some servicers may hesitate to adopt new systems and solutions because of business disruption or
aversion to change, the benefits of a truly modern servicing platform are clear and attainable. One simply needs a clear view of the cost benefits and a firm commitment to execute the change.
Sagent created Dara to meet a pressing and unmet demand: servicers have long needed a unified consumer and operator experience where all users can view the same real-time data at any point in the loan lifecycle.
While adopting new systems may cause short-term disruption, the change is easier to stomach with a clear path to cost reduction and better customer retention.
Deeper self-serve capabilities for performing borrowers empower them to take care of core functions like payments (even complex payment scenarios) from any device at any time.
Self-serve for hardships becomes more versatile, with an entirely holistic approach that is thoughtfully designed and user-friendly. This is more than just a homeowner requesting a forbearance or a loan modification from their phone.
This is empowering the homeowner with a seamless process for borrower and servicer from request through resolution, including review, document collection/approval, signatures, and compliance built in—and all with do-it-on-my-phone convenience.
Save valuable time for your team members and control reputational risk by providing education about escrow account changes—this is especially important as property taxes and insurance rise in this cycle.
These efficiency gains enable servicers to offer competitive pricing on portfolio retention loans, attract top talent, and develop a winning culture derived from cost leadership.
The Cost of Status Quo vs. the Future of Servicing
Sagent is making the choice for seller/servicers increasingly clear. If you want to service loans with transformed capabilities at a meaningfully lower cost per loan that you can translate into primary market cost competitiveness, consider Dara by Sagent as your servicing platform.
Its real-time data, AI, automated workflows, and homeowner self-service options are true differentiators compared to other offerings that promise to uphold the status quo in the face of shrinking margins. Plus, with Dara by Sagent, you get a GPS for mortgage servicing in the deal.
