A look at market in 2025

While the Federal Reserve continued to hold interest rates steady at the beginning of the year, a changing regulatory environment has made for an uncertain market.  The Mortgage Bankers Association expects origination volume to increase 28 percent this year, to $2.3 trillion, with a 13 percent increase in purchase volume, to $1.46 trillion.

For servicers, the changing market brings opportunities as well as challenges. “On the default side, there is a potential expectation that foreclosures will increase — not on a massive scale, just toward a more normalized level of foreclosure activity, which has for some time been historically low,” said Yvette Gilmore, senior vice president of servicing product strategy at ServiceLink.

Even though servicers anticipate delinquencies holding flat, they must  navigate existing  volume, as well as any additional volume incurred as the market changes, that may strain their workflows. This market provides servicers an opportunity to look at their existing processes and technology so they can readily adapt to any market changes and helps attain the goal to keep the cost and complexity of compliance to a minimum.

“It’s a good time for servicers to reassess how they are managing the loss mitigation process to ensure they are foreclosing in the right circumstances,” said Gilmore. “Technology can support their efforts by providing data, insight and applications designed to not only inform, but also properly document, their decisions.”

Applying technology to gain operational efficiencies and insight

Technology has expanded in breadth and depth to support servicers throughout every phase of default management. Gilmore offered perspective into ServiceLink’s solutions: “From technologies within our EXOS® platform that automate processes for increased accuracy and efficiency, to EXOS One Marketplace®, which brings predictive modeling to collateral decisions, ServiceLink technology empowers servicers to execute any default path with greater confidence and ease,” Gilmore said.

As technology continues to evolve, so do the solutions available to servicers. The volume of options available be overwhelming, so the trust servicers have in their technology partners to recommend tools that align with their goals and priorities is crucial. Three areas where we have seen a lot of advancement and demand thanks to technology are predictive analytics, automation and compliance.

Here’s why they are significant:

Predictive analytics

From determining the risk profile of a borrower to assessing property preservation risks on assets, predictive analytics can be tremendously helpful throughout the default journey as it helps you see what comes next.  “Predictive analytics are about not only understanding what has happened — and why it happened — when facing seemingly huge and undecipherable sets of data, but also having fully quantified certainty about what will or will not happen next,” explained Rajshekar Prabhakar, vice president, artificial intelligence.  

In terms of mortgage services, predictive analysis can be extremely useful when determining issues in property and value. Using the examples of property preservation and auction, Prabhakar illustrated the value predictive analytics can deliver. “Experienced people can bring intuition to their decision-making. Are prices about to go up or down? Is this property more likely to have certain issues than the typical property in that neighborhood or ZIP code? Predictive analytics essentially automate that intuition and make it available every time with a measured degree of confidence.

“Without necessarily inspecting a property, predictive analytics can look at certain parameters of a property and provide the ‘intuition’ that enables the servicer to take appropriate action at the appropriate time. The ability to not only predict but predict consistently (and more reliably than pure intuition would allow) can help servicers manage their assets more judiciously.”  

Automation

Not only does automation enable you to increase efficiency and accuracy, but it also frees knowledgeable team members to work on higher value tasks that require human scrutiny. Computers are tireless, efficient and exacting in following preprogrammed standard procedures, so it makes sense to assess all areas within a workflow where automation might be beneficial.

“The availability and relatively low cost of automation tools can make it tempting to say, ‘Let’s just automate everything, but that’s not an ideal strategy,” said Prabhakar. “It’s vital to work with a deeply experienced partner who can help you determine where automation can yield maximum value within your processes and then recommend technologies to bring that automation to life — in other words, to help you first do the right thing and then do things right.”

Compliance

Technology is a natural fit in the compliance space, where stringent — and ever-changing — regulations put constant pressure on servicers, especially as volume builds. Technology is standardized and repeatable, so when rules, regulations and guidelines are built into servicer platforms, workflows can be streamlined and risks reduced.  

Gilmore explained some of the ways ServiceLink supports servicers related to compliance issues: “Investors think of the remedies they want applied to their loans in very different ways — an FHA loan versus a GSE loan versus a private book of business, for example, or a loan with or without private mortgage insurance (PMI). We build all of those rules and requirements into their workflows so that we can be that secondary guidepost that says, ‘You need to follow steps 1, 2 and 3 for this loan, but steps 1, 4 and 8 for another loan.’

“Additionally, when regulators or other auditors become concerned with why a servicer made a particular decision rather than another, ServiceLink provides a repository of those decisions — why they were made, what the various options were, and why that decision was optimal—through our EXOS One Marketplace technology. By providing a snapshot of what the data showed at the time the decision was made, the servicer can prove they complied with all regulations and exercised sound judgment, whether their decision resulted in allowing the client to stay in the property or moving the loan through a collateral decision.”  

To learn more about our expansive tech focused offerings, visit here

‍