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  • Writer's pictureRob Lux

Cloud for Mortgage: The “Five C’s” that challenge mortgage servicers

David Officer, VP at SAP Fioneer and Rob Lux, CEO of Ranieri Solutions, review the challenges servicers face and how they can be addressed with Cloud for Mortgage.


An introduction to the five challenges: Customer service, Compliance, Cost, Cybersecurity, and Clients

David Officer — Between rapidly evolving regulations and aging platforms, mortgage servicers in the United States face a more challenging environment. Service costs have risen, compliance is fragmented, customers expect a state-of-the-art digital experience, and bad actors pose new cybersecurity and ransomware risks.

Mortgage servicers now need to balance five critical and sometimes competing priorities:


  • Anticipating customer needs and providing a digital experience that enables self-service

  • Ensuring compliance with evolving Federal, State, and local laws and agency regulations

  • Defending against new and emerging risks in cybersecurity 

  • Customizing services to their clients’ unique needs and preferences

  • Controlling costs while addressing all of the above

Now, SAP Fioneer and Ranieri Solutions are addressing these challenges with our Cloud for Mortgage (C4M) solution, leveraging cloud technology to consolidate the fragmented US mortgage industry and provide servicers with an intuitive, agile interface.

This series of blogs explores the current challenges of the US mortgage servicing market and presents our new platform, Cloud for Mortgage.

We hope you enjoy the first part of this series.


The first challenge: retaining customers in a competitive environment


Rob Lux — Let’s discuss the first C: retaining customers.


I think the industry acknowledges that we should be much better at retaining customers. Right now, customer retention is the lowest it has been in 16 years. According to the Mortgage Bankers Association, retention peaked at 36% in 2012 but was in the 11% range in the first half of 2023 and only 15% in 2022.


Meanwhile, the J.D. Power 2023 U.S. Mortgage Servicer Satisfaction Study reported an average customer satisfaction rating of 601 on a 1000-point scale—even the top-ranked servicer only scored 686. What’s more, 77% of consumers said they would likely reuse their lender for a refinance, and 81% said they would likely reuse their lender for a purchase loan. Yet servicers only retain 11% of their customers. What accounts for this disparity between the customer’s intention and their behavior?


The same J.D. Power study cites the controllable reasons a customer switches servicers as:


  • Better customer service  53%

  • Easy self-service               36%

  • Data protection               27%

  • Payment options              27%

  • Escrow                              22%


These switching reasons drive lower-than-expected retention rates.


Retention rates directly impact the value of a servicing portfolio.  Mike Vough, VP of Hedging & Trading Product at Optimal Blue reports that an increase in retention from 11% to 36% could lead to a 12 basis point increase in your pricing or mark to market. And a 77% retention rate could yield a 23 basis point increase in your economic servicing valuation.  That is significant value if retention is properly managed.


If servicers can address these issues, they can retain more customers and increase the economic value of their servicing portfolio.  But servicers start with two strikes against them. First, most people obtain a mortgage to purchase their house, but they want a house—not the mortgage. Second, most people don’t get to choose who services their mortgage. They may have never heard of the servicer listed in their welcome letter.


As a result, servicers are servicing a product that their customers need but don’t necessarily want, and their customers didn’t pick them to service the product. Yet customer retention is a key aspect of mortgage servicing.  It costs thousands of dollars to acquire a new customer but only a few hundred dollars to retain an existing customer. It’s a sound economic decision to invest in customer retention. This is especially true for banks, credit unions, and other firms that can cross-sell other products to their customers.


Anything that goes wrong with the customer experience will be a third strike. It gets even worse when the customer has issues making their payments. That’s when it’s critical that the servicer contacts the customer to try to work things out.



On a 1,000-point scale, the average customer satisfaction rating for mortgage servicers was 601.


— The J.D. Power 2023 U.S. Mortgage Servicer Satisfaction Study


Three tactics to retain valuable customers and improve customer satisfaction metrics


Alert customers in advance


Customers expect flawless service and are used to the “Amazon experience,” where every transaction is fast and easy. Like Amazon, servicers need to provide customers with a seamless experience, proactively address their needs, and interact with them via their preferred channel.


For example, if the servicer is performing escrow analysis for customers in Florida and knows that insurance rates have increased dramatically due to weather-related events, there are likely to be many escrow shortages, which will result in payment increases. “Why did you increase my mortgage payment?” customers might ask.


Some customers may not even understand what escrow accounts are or how they work, so it is important for the servicer to explain the process and potential issues. The servicer should use their data and technology to proactively alert customers in advance regarding the likely escrow shortage along with the cause of the shortage and any options they have, such as shopping for an alternative insurance provider.


Resolve customer concerns on the first call


Servicers also need to interact with customers via the channel they prefer. This means communicating with the customer via call center or digital channels, whether that be a mobile app, website, or chatbot. If a customer prefers to call, the servicer needs to ensure that call center agents have all the information at their fingertips and don’t need to scroll through a myriad of green screens with arcane codes to answer questions or address problems. 


A call center agent is the “face of the servicer” and their ability to provide accurate answers in the moment (first call resolution) will directly impact your customer satisfaction (CSAT) or Net Promoter (NPS) scores which generally correlate to customer retention rates. The agencies measure your average speed to answer and abandonment rate, but answering calls quickly is not enough. The servicer needs to answer the calls accurately and address the customer’s reason for calling – first-call resolution is the key metric.


The servicer should also provide the customer with other means of interacting with them, such as websites, mobile apps, and chatbots, as well as emerging means of interaction such as voice assistants like Amazon Echo, Google Assistant, or Apple Siri. 


Leverage data to build long-term relationships


Finally, servicers need to use the data they gather during the servicing process to proactively manage the customer relationship. Whereas a lender only interacts with the customer for about 45 days during the loan origination process, a servicer interacts with the customer for an average of seven years during the life of the loan. Seven years! That’s a lot of data that can be turned into valuable insights and increase the likelihood of retaining the customer.


For example, if a customer consistently uses the maximum grace days before paying each month, the servicer is wasting money by making outbound collection calls prior to that date. Another example: If a customer accesses a mortgage calculator on a servicer’s website, they may be thinking about refinancing. But just because they use that servicer’s mortgage calculator doesn’t mean they will refinance with that servicer. Servicers need to use that information to proactively offer the customer a refinancing opportunity.


How Cloud for Mortgage helps servicers compete


Cloud for Mortgage (C4M) captures all the data necessary for creating better customer interactions. If a customer calls in, the contact center agent can use the intuitive easy-to-navigate screens to provide quick answers to the customer’s questions. Rather than having to switch between multiple apps, all the information to service the customer’s loan is in the C4M system. This includes documents, images, and videos so, rather than having to “Alt-Tab” to a document management system, the files are available immediately.


If customers prefer to self-serve, they can use the Cloud for Mortgage portal to find answers to their questions and access self-service options at each stage of the servicing process. They naturally feel like they’re having a more high-quality, streamlined digital experience, which translates into those higher CSAT and NPS scores we talked about.


Servicers, meanwhile, can use the extensive data collected by Cloud for Mortgage and its real-time reporting and analytics tools to rapidly, efficiently, and holistically understand their customers. Thanks to the C4M model, they can access visualizations and custom analytics, as well as accurate, instant transaction and customer data. That’s huge: with the right tools, customers can be retained for life.


SAP Fioneer and Ranieri Solutions collaborate to service the modern mortgage market


David Officer — SAP Fioneer launched in 2021 out of SAP to drive innovation in financial services. With decades of experience serving the largest global banks in the world, SAP (and now SAP Fioneer) have seen significant change in technologies, platforms and markets. One market that we’ve observed as ripe for innovation is the US mortgage business. The segment is a significant and important part of the US economy, heavily regulated, but with just a few dominant service providers that rely on legacy technologies. 


To effectively address this market, we sought local expertise from our partner Ranieri Solutions to help build out the servicing solution of our C4M (Cloud for Mortgage) platform. Combining the capabilities of SAP’s proven platform, SAP Fioneer’s extensive global industry expertise, and Ranieri Solutions mortgage servicing experience, we are rapidly bringing to market a modern, scalable, proven platform for a new industry.


Learn more about Cloud for Mortgage


Now more than ever, customers are at the core of any good system design. As Rob described above, a new platform (with new capabilities) enables a new approach to customer engagement that has the potential to change servicer-customer relationships. The C4M platform is built to provide a modern, flexible user experience without sacrificing the requirement for compliance, controls, and risk management.


If you’d like to learn more about C4M, please don’t hesitate to reach out to  to discuss your business challenges, organize a demo, or schedule a call. 


About the authors


Rob Lux, CEO of Ranieri Solutions

Rob Lux is the CEO of Ranieri Solutions. He was previously COO for six years at Cenlar, the largest mortgage subservicer in the country, and CIO at Freddie Mac for seven years, where he built an award-winning technology team. He holds an MS in Technology Management from the University of Pennsylvania and a BS in Engineering from Drexel University.


David Officer, VP of North American Sales at SAP Fioneer

David Officer is the Head of Sales for SAP Fioneer’s North American division, where he oversees SaaS and software sales and overall customer success. Before SAP Fioneer, he was a client service lead at Ernst & Young and the Global Account Director of Financial Services at SAP. He completed his MBA at the University of Albany, SUNY.






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