A 20-year veteran of the mortgage industry, at BSI Lawrence is responsible for all loan servicing activities, from boarding to loss mitigation. Before joining BSI Financial, Lawrence was a SVP and portfolio manager for PIMCO, where he managed all aspects of loan-trading operations, participated in capital development, and was responsible for operations that supported consumer, student, and auto loan investments. He was also a Managing Director for PennyMac, where he developed a post-closing and servicing platform to host 20,000 loans and was responsible for PennyMac’s capacity planning and budgeting. His experience also includes key roles at Wells Fargo, IndyMac Bank, and Fremont Investment and Loan.
What are some of the primary challenges facing mortgage servicing?
Costs are always a struggle, as is compliance risk. Not just regarding the CFPB but also the state bodies, which require a lot of attention to make sure we implement the laws and procedures they put in place. This puts pressure on the margins and returns. New business opportunities are also difficult to find, especially servicing opportunities within the marketplace.
We’ve heard discussion that, as the CFPB has pulled back, the states are stepping up on the regulatory front. Could you talk about the trends you’re seeing on that front?
They’re definitely stepping up. We’ve seen new procedures come into place that requires attention, whether that’s adding new language into a letter, new loss mitigation procedures, or new regulations that require implementation.
What lessons has the industry taken away from the increased natural disaster activity in recent years? Are response and preparation improving?
We’ve actually gotten pretty good at it. With Hurricane Katrina and the other big disasters that have happened in the past, we’ve dodged some bullets in the last couple of years. We put proactive measures in place to manage property preservation, to handle inspections, to assist customers proactively in finding loss mitigation alternatives if they moved or they can’t pay. I would say that we’ve significantly upped our game in dealing with natural disasters.
The key is leveraging technology to assist us. Having cell phones, having the ability to go paperless, having the mobile app, we can get information out to customers that we likely wouldn’t have been able to 10 or 15 years ago. It was always challenging even to find people during disasters, and now people find us. With instant chat and other pieces of technology, it’s easier to engage with customers than we it has been in the past.
What are some other ways technology is changing the way you do your job?
We’ve worked to push everything that we can to the web or mobile apps because most customers don’t want to make a phone call. The reality is, you want information online. You want to be at work and be able, in five seconds, to figure out what’s going on, so you have to move everything that way or you’re going to be lost.
There’s a lot of potential surrounding blockchain and the ability to convert data from different formats to where we all use essentially the same servicing systems. If we can get to a point where we don’t have to use those servicing systems, where we could dramatically improve costs and utilize technology to provide more control over our own data, that could be a game-changer.
If there is an economic downturn ahead, what should servicing shops be doing to prepare?
We see areas that could be of concern. There’s a natural migration from North to South, as well as people moving to warmer climates and better economies. It’s likely to be more of a localized issue than national, but you have to make sure you have strong loss mitigation procedures and a good panel of vendors who are prepared to support you.
Make sure that the teams that you’re working with have the resources to deal with natural disasters. This is one of the things that we got stuck on during the last go-round; there was just too much work to be done.