00:00Overall, we've seen escrow costs go up by 45% over the last five years and property taxes alone about
00:0628% of an increase over that same time period.
00:09In 26, we expect that a third of customers will have escrow shortages from property taxes alone in the nature
00:16of about $1,800.
00:23My name is Eric Dame. I lead production and delivery at Cotality, and that's as head of tax and flood
00:29operations.
00:30I've been with Cotality about 18 years now, and I started really in the front lines, making calls to tax
00:36collectors, then led a number of areas within operations, led client success for our mortgage division.
00:42And most recently, prior to this role, led product strategy and sales.
00:55First, I'd like to start by putting the scale of the issue in context.
00:59Overall, we've seen escrow costs go up by 45% over the last five years and property taxes alone about
01:0528% of an increase over that same time period.
01:09And so it's really important that servicers start to think more proactively because in 26, we expect that a third
01:16of customers will have escrow shortages from property taxes alone in the nature of about $1,800.
01:23So if servicers can start to think about how do I proactively reach to my customer ahead of time before
01:30that escrow analysis to give them a heads up,
01:32they'll be in a much better position to avoid the payment shock, the calls and the complaints that come down
01:38the line.
01:45Fourth quarter is the busiest property tax cycle every year.
01:49So many taxing authorities release their bills and are requiring payment during that window.
01:54So for many servicers, more than half of their annual tax payment volume is concentrated in that period.
02:00And the challenge is not only just volume, it's also the variation of the thousands of taxing authorities and their
02:06requirements, due dates, payment formats, payment media, exception processes.
02:12It all happens at the same time.
02:14And where Coatality comes in is we can bring the scale, our agency management team, and the automation to make
02:21that cycle a lot easier for servicers.
02:24Our agency management team is able to track the requirements in real time and communicate that proactively.
02:29Our payment process is able to confirm when funds are needing to be delivered to Coatality and also delivered timely
02:37and accurately to the agency,
02:38so that it takes the worry out of the servicers hands that combined with helping servicers navigate all of the
02:46nuances of late release or varying other surprises that can happen in the middle of a tax cycle allows servicers
02:54to focus on the borrower experience.
02:56And we want to tie that back to outcomes where we're reducing calls and supporting more accurate, accurate and timely
03:03payments for our clients.
03:09One major area is tax parcel search.
03:12We're using stronger data assets and all of Coatality's proprietary data to improve how we identify the correct parcel when
03:20new loans come in for that initial tax setup,
03:23which means a much cleaner experience preventing downstream issues for the borrower and for the servicer and we've seen a
03:3045% year-over-year improvement in parcel search accuracy from these investments.
03:35The digital tax portal is also an area we continue to improve so we can drive self-serve capability for
03:42our clients and their escrow departments,
03:44so they can manage taxes more easily with access to real-time visibility into items like payments, exemptions, duplicate tax
03:52IDs, and upcoming economic loss states.
03:56Digital Tax Connect is our API, which is an important functionality that allows clients to bring our real-time data
04:03into their own portals,
04:04IVR, and workflow tools that enable self-serve with customers and a better customer experience.
04:11And lastly, we've talked about the hike in escrow costs and taxes.
04:16We've been piloting Digital Tax Amount Forecasting Insights, which helps servicers anticipate the likely tax increases and potential escrow impacts
04:25before the cycle starts so they can move from reactive to proactive.
04:36The industry is moving away from reactive, you need to move to proactive, to predictive, and the future is not
04:42just about paying a bill faster after it arrives or paying it accurately,
04:46it's knowing earlier that a tax increase is coming, that a reassessment or a shortage is likely to happen, helping
04:53your borrowers prepare for what's coming before it becomes a surprise.
04:57Our real-time agency data becomes increasingly important because everyone needs to work from the same accurate picture of tax
05:04events,
05:05including the homeowner, the servicer, and the taxing authority, as well as quotality.
05:09And I think where AI really is going to play a role, I see both in the near-term value,
05:15not just about a replacement for people,
05:17but more as a way to improve service quality, and to support agents that are working tasks on behalf of
05:23customers,
05:25proactively identify patterns, trends, issues, and help borrowers get faster answers to routine questions.
05:31Ultimately, the best outcome is a more personalized experience for that consumer, where self-service, live support, informed agents are
05:40able to handle loan-specific and agency-specific data in a more proactive way.
05:45The better data, better automation, and AI we can put behind our solutions are going to not just be efficiency
05:53plays,
05:54but they'll also protect the long-term relationship between the servicer and the homeowner.
05:58We'll see you soon.
