New Mortgage Products Require Nimble Servicing Technology
Peugh, Tom, Mortgage Banking
I was explaining the benefits of an agile mortgage servicing system at a recent Mortgage Bankers Association (MBA) conference, and my listener asked me to tell him as succinctly as possible what makes our product stand out from the competition. Now, I have answered that question many times, but the man was asking for brevity. So I simply said, "Microsoft[R] .Net Technology."
My answer was short but to the point, which was this: When you unravel the jargon and get down to the grit, the mortgage industry today is realizing something the rest of the business world discovered long ago--that the right technology can free individual workers to be much more productive, regardless of the task and the objectives set.
In loan servicing, the browser-based .Net format frees a servicer from the shackles of 30-year-old back-office systems. The old servicing systems were designed to handle huge loads (millions of accounts) over long terms (30-year), with little demand for speed or diversity.
As the modern mortgage marketplace draws in disparate borrowers and offers a vast variety of loan products, servicers have struggled to keep up. The combination of .Net technology and database accessibility has proven to be up to this challenge, providing the necessary power and agility to service an array of new mortgage products--many of which are short in duration and full of exceptions. Typically, in most legacy servicing systems you have to touch each loan to find the few exceptions that need some notation.
More recent servicing systems access these exceptions, placing loans into a queue for tax processing, escrow analysis, payment processing, etc. This allows a dedicated work group to handle these loans, eliminating manual, unnecessary touches that increase staff time and lower return on investment (ROI).
Smaller and medium-sized mortgage servicers stand to benefit the most from this nimble technology by offering a lower cost per loan. Until now, large servicers had the field to themselves, believing that by servicing large numbers of loans they would produce economies of scale, making them the acknowledged leaders.
However, many large servicing companies cannot deliver data in real-time, which makes business difficult for third parties like contract loan collectors, who are being used more often in today's fluctuating business environment. …