Key Takeways:
- 2025 was a year of intentional transformation for LERETA, marked by leadership evolution and strategic progress.
- Escrow-related confusion continued to challenge borrower experience, elevating the need for clearer, earlier communication.
- Heading into 2026, servicers have an opportunity to apply lessons from 2025 through better-connected data, operations, and decision-making.
2025 was a year of meaningful transformation across the mortgage servicing industry. Ongoing market pressure, rising borrower expectations, and increasing operational complexity pushed servicers to reexamine how tax, escrow, and flood services support accuracy, efficiency, and trust. For LERETA, the year was defined by purposeful progress—strengthening leadership, advancing operational innovation, and building momentum around solutions designed for long-term resilience.
Rather than responding reactively to change, LERETA focused on reinforcing the foundation that supports clients every day: clarity in data, scalability in operations, and transparency throughout the borrower experience.
Leadership and organizational growth played a central role in this transformation. In January, Katie Brewer was named Chief Executive Officer, marking an important evolution in the company’s strategic direction. Over the course of the year, LERETA further strengthened its executive leadership and governance with the addition of Suzanne Powell as Chief Transformation Officer and Kristy Fercho to the Board of Directors. Together, these appointments amplified LERETA’s commitment to disciplined execution, operational excellence, and long-term strategic focus.
A key milestone in 2025 was the partnership with Sagent, which integrates LERETA’s tax and flood services directly into Sagent’s modern servicing platform. Through this integration, servicers gain automated access to real-time tax monitoring, payment processing, and flood zone determination data within their existing workflows—reducing handoffs, improving data accessibility, and supporting more efficient, informed decision-making. Strategic partnerships like this reflect LERETA’s approach to innovation throughout 2025: meeting clients where they are, while helping them modernize responsibly and with confidence.
LERETA expanded its Tax Grants program in partnership with Operation Homefront, continuing its commitment to supporting military veterans as they transition into long-term homeownership. Launched in 2023, the program provides property tax grants to veterans who have completed Operation Homefront’s Permanent Homes for Veterans program and received mortgage-free homes. The 2025 expansion included grants awarded to the first two of eight veteran families scheduled to receive support during the year, helping ease a meaningful annual financial obligation and support housing stability.
Among the 2025 recipients were Army Specialist Keisha Dorsey of Texas and Army Sergeant Jeremy Carey of North Carolina, both of whom completed Operation Homefront’s multi-year homeownership and financial education program before receiving permanent ownership of their homes. The broader impact of the program is reflected in the experiences of other grant recipients, such as Jerry W. of Florida, a Navy veteran whose family received property tax relief through the LERETA Tax Grants program.
As Jerry shared, “Property taxes in our area run upwards of $9,000 annually. Knowing those costs are covered gives us peace of mind and allows us to focus on our family’s needs and future goals.”
Since the Permanent Homes for Veterans program began in 2012, more than 690 veterans and their families have graduated and received mortgage-free homes. Through this partnership, LERETA demonstrates the importance of pairing operational excellence with lasting community investment.
When borrowers don’t understand why their payment changed, frustration follows quickly.
Escrow confusion and borrower experience became one of the clearest servicing pressure points in 2025, driven less by rates and more by persistent communication gaps. J.D. Power’s 2025 U.S. Mortgage Servicer Satisfaction Study showed overall satisfaction at 596 out of 1,000, 10 points lower than the prior year and 131 points below mortgage originators, with communication and responsiveness cited as the primary driver of the gap. Escrow activity amplified the issue: 57% of customers experienced an escrow increase, and satisfaction among that group was 67 points lower than borrowers who did not see a change.
LERETA’s Escrow Awareness Survey echoed the same pattern. Only 60% of homeowners said they fully understand their escrow account (down from 80% the year before), 68% experienced a payment increase tied to taxes and insurance, and 55% were surprised by the change. Together, the findings pointed to a clear conclusion for servicing leaders: clearer, earlier, and more personalized communication, especially around escrow changes, is no longer optional, but essential to reducing call volume, maintaining trust, and stabilizing the borrower experience.
Speed matters in servicing, but accuracy matters even more when risk and compliance are involved.
Automation and data accuracy moved from optional enhancements to operational requirements especially in flood certification, where speed must be matched by precision. LERETA reported that automation enables immediate, accurate flood zone determinations for over 93% of mortgage applications, while the remaining 7% require specialized exception handling, often influenced by property-specific characteristics and evolving FEMA map activity. With FEMA issuing revised flood maps twice monthly, the industry-wide need for strong exception management only grew.
LERETA’s approach highlights why: exceptions can change insurance requirements, trigger borrower confusion, and create compliance exposure if not handled correctly. Quantitatively, the gap between routine automation and true accuracy shows up in tools like probability scans that provide over 99.9% accurate predictions of flood certification status changes ahead of map revisions, helping reduce cycle time and uncertainty for lenders and carriers alike. In 2025, the organizations that performed best weren’t just automating; they were building disciplined processes around the exceptions that automation can’t resolve alone.
Property tax complexity and risk mitigation intensified as year-end cycles collided with rising cost pressure and shifting agency requirements. LERETA emphasized that there is “no avoiding the Q4 crunch,” noting that half of all property tax payments come due in year-end seasonality, specifically with 18 states due in October, 18 in November, and 13 in December, which makes early preparation a practical necessity, not a best practice. The strain is compounded by broader affordability pressure: homeowners insurance premiums rose 10.4% on average in 2024, following a 12.7% increase in 2023 (nearly a 24% rise over two years), heightening escrow balances and the likelihood of borrower confusion and inbound calls during peak servicing months.
Operationally, accuracy depends on continuously validated due dates, parcel data, and agency requirements, and LERETA noted it engages with more than 24,000 agencies annually to confirm updated due dates and payment preferences while pointing to increasing agency automation (with nearly one in five agencies shifting toward automation in recent years). In 2025, the servicers best positioned for stability treated property tax monitoring as an always-on risk function—one that protects portfolios, reduces delinquency exposure, and prevents avoidable borrower impact when stakes are highest.
Looking Ahead: What’s Next in 2026
As the industry moves into 2026, the priorities that shaped 2025 are expected to continue while servicers navigate ongoing cost pressure, regulatory complexity, and evolving borrower expectations. The focus ahead is less about isolated improvements and more about how data, technology, and operational processes work together to support consistent execution and informed decision-making across tax, escrow, and flood services.
LERETA will continue to support clients through education and industry engagement, including 2026 webinars and thought leadership initiatives that examine operational priorities and emerging servicing challenges. These efforts are designed to help servicers adapt thoughtfully and make decisions grounded in real-world conditions, not assumptions, as the landscape continues to shift.
The LERETA Difference
Progress in 2025 was made possible by the trust and collaboration of LERETA’s clients and partners, and that trust remains foundational as the industry continues to evolve. As servicing grows more complex, LERETA remains focused on supporting clients with experience, perspective, and solutions built for long-term stability.
To stay connected in the year ahead, we invite you to subscribe to LERETA’s quarterly newsletter and continue the conversation. No matter how the market shifts, LERETA remains grounded in thoughtful service, deep expertise, and a commitment to supporting those who rely on our work.
