In the ongoing hunt to create mortgage technology that can be personalized in hopes of increasing customer retention, Black Knight, Inc. is confident its new LoanSphere Servicing Digital solution is about as on point as it gets.
Black Knight Chief Product Officer Shelley Leonard told Dodd Frank Update how offering customers a user-friendly solution with useful, personalized data about their loan and their home, companies can strengthen customer relationships and continue engaging borrowers long after a loan is closed.
Leonard said Black Knight designed the platform starting from the consumer’s perspective and worked backward from there to shape the back-end functionalities.
“We designed it with the end customer in mind,” Leonard said. “We tried to make it very intuitive, very easy to understand, eliminating, wherever possible, what I would call ‘mortgage-ese’ or ‘mortgage language,’ choosing instead to use more simplified terms. We also used the app as an opportunity to educate customers about some of the more complicated things in the mortgage industry.”
Among those “more complicated things” are words that are common to lenders and settlement agents but foreign to many first-time homebuyers, such as escrow, amortization, lien and others.
Based on consumer research conducted by Black Knight, Leonard said a borrower’s main objective in getting into their mortgage application is to make a payment, therefore the app was developed to make that option available in multiple ways so they are immediately able to see the result of that payment, how it affected their loan balance and how it was split across the principal, interest and fees.
The app is made up of three main sections. One section provides loan level information to the borrower, such as that regarding the aforementioned loan payment, enriched by loan-level data from the servicing system and by incorporating public records information, along with automated valuation models (AVM), to provide additional details about their home in relation to its value. Borrowers then can simulate opportunities to refinance their mortgage, pay more toward the principal on a monthly basis to save on interest, the amount of equity needed to eliminate the need for private mortgage insurance, adding a lump sum payment to reduce their monthly payment and more.
The second section offers borrowers ideas about how they may be able to use their home equity. Borrowers can use the app to explore the possibility of using their equity to buy an investment property, sell their home to buy a new one and offer affordability information or perform a cash-out refinance. By offering such suggestions, companies can improve customer retention, catching borrowers early in their thought process and allowing them to connect immediately to act.
The third section comes into play when consumers are considering selling their home. It displays information about other homes in their neighborhood, such as age, value, makeup, amenities and other data useful when determining a price point to ask for when putting a home on the market. The section includes demographic information as well, such as median ages and median income. It also incorporates school information and a borrower’s property data, showing when their home last sold and how much it sold for.
To provide the vast amounts of information offered through the app, Black Knight tapped into its rich stores of data it uses in many of its products, as well as information aggregated from multiple third-party providers. Leonard said the company is looking for opportunities to further enhance its available data through partnerships with several fintech providers to incorporate their information into the Servicing Digital app. Some of the additional functionalities the company would like to add would offer information that would help inform borrowers about home maintenance, appliance maintenance and more.
Leonard said Black Knight utilizes the company’s AVM to market the fact that its data has been evaluated by multiple parties and back-tested to ensure its authenticity. The company’s AVM also uses a confidence rating to assess the quality of information and the app will not display information with a confidence rating of less than 80 percent.
“Our goal with LoanSphere Servicing Digital is to give our servicing clients an engaging, consumer-centric tool for customer retention,” Black Knight CEO Anthony Jabbour said in a release announcing the launch of the app. “For many people, a house is the single greatest asset they’ll ever own. With that in mind, and employing a ‘design thinking’ approach, we’ve developed a solution that lets our clients provide their customers with ongoing, detailed information about their loans and homes, as well as the tools to help manage the wealth they have built in their homes.”
Black Knight President Joe Nackashi also commented on the potential benefits of providing customers with information they can utilize for years after they close a loan.
“Increasing engagement and providing tools that add value are key to deepening the servicer-customer relationship,” Nackashi said. “By providing anytime, anywhere access to an array of customer-specific information and functionality, LoanSphere Servicing Digital enhances the consumer’s servicing experience and adds value on an ongoing basis, which results in higher retention rates.”