In This Time of Increased Competition for the Borrower, How Do Lenders Leverage Tech nology to Encourage Customer Loyalty?

Mortgage Wire

James C. Puzniak, Group President, Lending Systems & Services, Fiserv

January 14, 2004

As the volume of new mortgages and refis wanes, competition for borrowers is heating up. Today's loan applicants, aware of increased competition for their business, are talking to multiple lenders at the same time. Borrowers with existing loans are continually being solicited to switch their accounts to another institution. This is creating two distinct challenges for lenders: gaining new loan accounts and preventing current customers going elsewhere.

The key to overcoming these challenges is strategic life-of-loan relationship management to secure customers and keep them loyal. This relationship building begins with the origination process. When an applicant makes initial contact, the lender must immediately secure their confidence by providing responsive service and open lines of communication. Providing a positive customer experience during the application process establishes this bond between the borrower and lender. By supplying excellent service over the life of the loan, the lender will have the opportunity to offer additional products that expand the borrower relationship and encourage customer loyalty.

The initial contact with prospective borrowers is critical to gaining their business and establishing a solid relationship for the future. Not only are loyal customers more receptive to new offers from their lender, they are more apt to contact the lender first when they are seeking additional financing or have other life events that require financial instruments. Fiserv provides end-to-end technology and services designed to assist lenders in managing loan relationships throughout the lending lifecycle.

Borrowers Choose Lenders who are Attentive and Responsive

First-time mortgage borrowers - or borrowers looking at a lender for the first time - will evaluate the lender's accessibility, courtesy, and responsiveness. Fiserv loan origination technology positions lenders to manage the borrower's experience across multiple customer-service channels: the retail branch, lending Website, contact center, and voice response unit.

For example, the Fiserv UniFi(c) PRO Mortgage loan origination system (LOS) enables this high degree of customer responsiveness. The system includes task-management and decision engines designed to evaluate application data and perform automated tasks based on user- defined business rules and system parameters. Fiserv LOS solutions streamline the application process by sharing and exchanging loan data with other business applications and other vendors' systems. This results in faster pre-qualification and more accurate product recommendations.

Involving the Borrower in the Management of the Loan Process

Throughout the application process, the lender, through proper utilization of the LOS, keeps the borrower involved by returning loan- status information regarding pre-qualification, loan characteristics, property valuation, loan approval, and closing services to a Web-based point-of-sale system. This real-time communication enables a two-way dialogue between the lender and borrower, providing enhanced customer service. With status updates available via the Internet, from the loan officer or over the phone, lending customers become personally engaged in the process. This interaction provides a high level of customer satisfaction during the origination process and instills confidence in the lender's ability to respond to the borrower's needs.

To quickly qualify the borrower, the information required to complete an application must be accurate and timely. Fiserv assists lenders in accelerating the loan application process with CASA(r) and ValueChoiceSM AVMs, providing fast and accurate home value estimates and collateral scores; the browser-based Webstar(r) credit reporting system which provides unmatched turnaround on credit checks; and a full range of flood risk assessments and fraud detection services.

Business Process Outsourcing Extends the Lender's Reach

Lenders who want to better manage third-party service providers may opt to license the GATORS(r) vendor management system or they can completely outsource settlement and closing services to a Fiserv fulfillment center. GATORS' technology pushes work out to third parties, monitors completion, and returns data to the lender so that they in turn can respond in a timely manner to the borrower.

To assist lenders in contracting anytime/ anywhere settlement and closing services, Fiserv solutions interface with a broad network of real estate professionals, expanding the lender's geographic territory. Fiserv also operates fully staffed contact centers for lenders who need to outsource lead and contact management functions. Fiserv contact center personnel are highly trained in the latest customer service techniques, enabling them to enhance customer experiences and satisfaction. These professionals know how to best represent their lender clients and turn the point of contact into the point of sale. Lenders can also select the option to completely outsource application processing, including title, insurance, underwriting, valuation, document preparation, closing and funding to the Fiserv fulfillment center.

Borrower Data Enhances the Customer Experience Beyond Closing

The mortgage application provides a highly detailed view of a borrower's economic situation, and also supplies clues to future financial needs. After loan closing, Fiserv LOS solutions upload complete borrower information to the MortgageServ(c) loan servicing platform. Since MortgageServ provides lenders with a single utility for servicing all types of real estate secured loans, they can collect the demographic information on first mortgage, second mortgage, and home- equity line of credit borrowers.

Borrower information translates into empowered customer service because the Fiserv loan servicing system delivers the information automatically to servicing representatives. At a glance they can identify the loan type, additional account relationships within the institution (such as a home equity line of credit), or any other special circumstances related to the account or borrower. Well-informed customer service representatives are prepared to respond quickly and accurately to customer inquiries. When the borrower makes contact, they know that the lender is familiar with their account, inspiring confidence and loyalty.

Just-in-Time Offers Retain Mortgage Accounts

Beyond servicing system data, Fiserv MortgageServ clients may use the InformEnt(c) data warehouse solution to obtain industry and consumer information from external sources. By comparing third-party data with borrower data maintained on the servicing system, lenders formulate programs to identify and target refinance-inclined customers. Lenders then halt runoff by pushing out offers through the Internet, contact centers, or other channels when potential defectors make contact regarding payoff amounts or procedures. A just-in-time offer from their lender of record encourages customer loyalty.

Using Borrower Information to Identify Home Equity Leads

Industry trends show that an increasing number of mortgage customers are leveraging home equity. To generate home equity leads, lenders will look to their borrower database. Campaigns can be formulated with borrower information from the MortgageServ system, in tandem with Webstar credit reports, and CASA property valuations. When a pre- qualified borrower makes contact regarding their account balance, the system prompts a home equity offer. Since the lender uses the loan servicing system to deliver pre-scripted narratives to its customer service representatives, the offer sounds like a natural extension of the courteous service the lender provides. Feeling like a valued customer encourages the borrower to open a home equity account where they have their first mortgage. Once the borrower expresses interest in a home equity loan, the lender secures instant approvals with QuickClose Lien Protection and ValueGuard Property Valuation Insurance. These innovative insurance products from Fiserv mitigate the risk associated with second liens. Fiserv can also provide settlement and closing services to accelerate the process or to handle overflow.

Offers Timed to Match Life Events Strengthen Customer Relationships

Lenders may also use borrower information to anticipate future financial needs. For example, mortgage customers close to final payment on their car loan might be proactively contacted about another car loan. Or, the lender might compile a list of borrowers who have children approaching college age, and designate them to receive an offer for an education loan. Using servicing system information to formulate product offers based on the borrower's economic and life situations will increase campaign success. The borrower will be more apt to respond favorably to product offers that are in sync with the milestones in their life and will perceive their lender to be in touch with their needs.

Committed to a Lifetime of Support

Whether a lender is courting a new customer or an existing customer they want to keep for life, Fiserv Lending Systems and Services helps lenders deliver excellent customer service. And, just as lenders must be proactive to anticipate the needs of their customers, Fiserv will continue to develop products and services that ensure lenders can continue to leverage technology to encourage long-term customer loyalty.

Contact

Fiserv

Lending Systems & Services

Three City Place Drive, Suite 1090

St. Louis, Missouri 63141

Phone: (800) 655-5536 x3201

Email: james.puzniakfiserv.com

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