How Mortgage Lenders Can Educate Customers About the Steps of Their Hardship Journey

With a flood of mortgages going into forbearance during COVID-19, many borrowers are wondering what’s next and how this will impact their financial futures. When borrowers have these questions, they’ll turn to their mortgage lenders for answers. 

As a mortgage lending institution, your customer-facing teams need to be well-versed in the answers borrowers are looking for. Now is an opportunity to serve as a valuable resource to those who need it and to strengthen your relationship with your customers for years to come.

Here’s how your mortgage lending institution can inform, educate, and engage customers throughout their hardship journey.

Place Empathy Behind Every Message

First and most importantly, each time you communicate with borrowers in the middle of financial hardship, be understanding of their situation and show your support.

Your customers want human connection during this stressful time, not just formal letters from their mortgage lender in the mail. At each touchpoint with a customer facing a forbearance or loan modification, whether it’s a written or verbal message, ground your words in empathy for their hardship. 

Empathy arises from person-to-person connection, but unfortunately in-person customer support may not be possible right now. Instead, provide opportunities for your customers to get in touch with a real person who can talk them through their hardship journey. This might be over the phone or via video conferencing to recreate the face-to-face experience.

Reach Out to Your Borrowers Proactively

Don’t assume your borrowers know what happens next. Chances are your customers have never faced this kind of financial hardship before, and they don’t know how to proceed. Forbearance repayment can be confusing.

For this reason, ensure your communications are early, consistent, and thorough. Don’t leave any time for your customers’ questions to compound.

Communicate with your customer 60 days and 30 days before the date of forbearance, at the very least. Check in frequently for any changes in your customer’s financial situation, such as a change in employment.

You should also communicate the latest news and updates about your institution as they come so that borrowers know how it will affect their forbearance. 

For example, you might create a new customer journey specifically for COVID-19 updates. That way, you can reassure your customers by telling them the steps you’re taking to ensure the safety and security of your institution.

Educate Your Borrowers with Relevant, Timely Materials

To help your customers understand all the implications of a forbearance or loan modification, equip them with the right information.

Next steps will look different for everyone, which makes it important to outline all of the different factors affecting their forbearance. Ensure customers know all of their options: the Consumer Financial Protection Bureau’s guide to coronavirus relief options is a good place to start.

Universally, though, you can explain that interest will continue to accrue, and that this will have a negative impact on credit score.

Then, set your customers on a path toward financial health by giving them resources to help navigate their recovery. Some sample educational materials you can provide to your customers are:

  • Budgeting 101.
  • How to pay down a new loan.
  • How to rebuild your credit score (note: the CARES Act stipulates that COVID-related forbearances will not be reported to credit agencies).

Your customers could search for information about mortgage hardships anywhere. When your mortgage lending institution provides it first, you build your customers’ trust and empower them to begin their financial recovery with the tools they need.

Leverage Technology to Humanize Your Message

By giving your borrowers the opportunity to speak with a real person, you humanize the customer experience. But to encourage them to take the steps to get there, such as opening an email or clicking a link, you can personalize your message.

A personal touch, such as including your borrower’s name, location, or mortgage details, can be that nudge to take further action. Technology allows mortgage lending institutions to manage and speak to all customers’ individual financial needs efficiently and at scale.

Technology can support your customer-facing teams as they sift through high call and email volumes. The right software can tell them when to follow up with a customer, and it can also help tailor their communications to the COVID-19 crisis and communicate updates that have come from the federal government.

Technology also makes it possible to create journeys that consolidate all of a customer’s personal information for humanized messaging. Email nurture campaigns like Total Expert Journeys are a scalable way to deliver personalized communications and advice that is relevant to a customer’s specific situation.

Be a Trusted Advisor in a Time of Hardship

The COVID-19 crisis has been a highly uncertain time for many. For those unsure how to recover from a financial hardship that necessitates a forbearance, your mortgage lending institution has a unique opportunity to provide a helping hand.

When you support your borrowers through their mortgage forbearances with the right tools, resources, and communications, you set them up for success and build a partnership that will last through hardship and into financial health.