Sagent recently sponsored a HousingWire webinar that brought together two top CEOs — from a big bank, a fintech leader, plus a world-class moderator — to discuss some of the factors contributing to the ongoing struggles in the housing market, offering their insights on the best ways to implement innovative and reliable technologies and strategies to gain a competitive edge in the industry.
First up, let’s meet our panelists + moderator:
- Dan Sogorka, Chief Executive Officer of Sagent
- Mark O’Donovan, Chief Executive Officer of Chase Lending
- Julian Hebron, Founder of The Basis Point
Julian kicked off the webinar with a few softball questions, including an uber relevant pop culture reference (timestamp: 6:07) that’ll have you quickly lassoed into the conversation. So, let’s dive right in.
Staying Ahead of Regulation Through Technological Innovation
The mortgage industry has seen tremendous change since 2008. Increased regulations and oversight have made it necessary for servicers and originators to find the most effective ways to service loans while abiding by these policies. Mark started the conversation by discussing how Chase has adapted to these changes while exponentially growing the business:
“We have been on a path to get really good at performing servicing, get as efficient as possible in terms of unit cost, and have a robust risk control framework to ensure that we mitigate some of the challenges that we and others had in the past and given the capital we have to hold, you know, scale can be your friend, if you can do servicing really well and efficient way.” – Mark O’Donovan
Dan built upon Mark’s comments and spoke to Sagent’s relentless pursuit of innovation and improving the customer experience which has allowed the company to comply with new regulations while increasing the total volume serviced on their platform by $1 trillion since 2022. Dan expanded on previous statements saying that companies using Sagent’s platform — with the consumer experience in mind — have been able to acquire new customers and assets at a faster rate than their competitors by being the most cost efficient and technologically advanced option on the market.
“The year before this market turned, we felt like there was a need to modernize the servicing stack and really reframe the business from an old mainframe accounting business to a modern consumer-focused platform. So, we happened to be a little bit ahead of the curve in terms of getting that message out there, building out the platforms, and going to market.” – Dan Sogorka
Reliable Servicing as a Competitive Edge
In the third quarter, Chase experienced large growth in their servicing business, and Sagent saw a similar trend across servicers on their platform. What’s the secret sauce behind their competitive advantage? Crafting an intentional strategy that is centered around an operationally efficient business that optimizes core servicing. When reflecting on Sagent’s growth, Dan noted that there are two channels through which a servicing business can grow: book origination or acquiring assets.
“If you’re going to acquire assets, you have to compete against other people. So, it basically comes down to how efficient can you be to in order to acquire the assets that you want to get versus your competitors.” – Dan Sogorka
Sagent is able to grow its customer base and nuture existing partnerships with its streamlined framework approach, ensuring that servicing is cost effective, consumer-focused, and fully compliant. Mark added to this, noting that Chase’s focus on growing their servicing business has been an integral driver of their increased scale and client engagement.
“We’re on a journey through a lot of technology investments and a lot of things that Dan talked about to try to transform our servicing business from an operational function to a customer centric place that drives you a lifetime of engagement and drives the want to do the next thing with us because the experience we created was really good.” – Mark O’Donovan
Current Housing Inventory – Supply & Demand
As the year closes out in the midst of a tough market cycle, the big question on everyone’s mind is how to boost homeowner affordability and access. One culprit: How the lack of supply in relation to growing demand remains an issue for potential homeowners. While a strong housing demand is a green flag for the economy, slower growth in new construction coupled with regulatory barriers have widened this gap between supply and demand. Unfortunately, this relationship falls widely on the shoulders of underserved borrowers and first-time homebuyers, who often live in areas with a lower-than-average supply of housing.
Closing this gap requires a multi-faceted solution over a course of time. However, Mark noted that implementing structural change on the supply side while also creating services that bolster access is a necessary first step in the right direction.
“There’s been a lot of institutions, including the government, Fannie, Freddie, and FHA that are working with originators to provide more products and services. Think about down-payment assistance and the various techniques to create more access. And there actually has been progress when you take a step back, even in a tough environment.” – Mark O’Donovan
Driving Innovation Through a Consumer-Centric Lens
For Sagent, technological innovation in servicing and origination is key to affordability. Dan touched on how traditional servicing operations have often been cumbersome and inefficient, leading to additional costs. Sagent believes that streamlined technology can create top-of-the-line customer experiences, drive cost control, and build strong compliance that is resilient and reliable in an ever-evolving regulatory environment.
Sagent’s technological framework is built with innovative technology that powers a better customer experience while reducing total operational costs for servicers, ensuring that all stakeholders can access loan data in real-time while also lowering other additional costs. When servicing is done with the right products, it can increase consumer affordability and give power to a company’s current — and future — competitive edge.
“You need your technology to be able to support this [cost reduction] and then give you the flexibility of an open ecosystem to then plug into other partners, goods, and services in a seamless way that can provide value to your consumers.” – Dan Sogorka
For a full dive into the conversation, check out the recording below. And as always, don’t hesitate to fill out the form below if you have any questions for us.