With rising interest rates and compressed margins, many lenders are looking to
their servicing business to grow revenue. However, working with borrowers exiting
forbearance programs adds another layer to an already complex process which
could raise costs. Lenders who want to thread the needle between the
different interests of borrowers, investors and regulators need smart, efficient
mortgage software solutions to meet their servicing goals.
New investor guidelines
Borrowers exiting forbearance plans have a number of options, all of which require
servicers to have a seamless, flexible process to communicate and place borrowers
into appropriate work-out plans. At the same time, those options trigger specific
additional requirements from investors, including reporting principal and interest
collection activity, drafting funds due to the investor, resolving any reporting or
drafting discrepancies, and reconciling custodial accounts.
To make things even more complicated, the two biggest investors — Fannie Mae
and Freddie Mac — continue to adjust their guidelines amid the unpredictable
nature of the global pandemic. And the stakes are high. Regulators have ended
some of the flexibilities they put in place during the pandemic and have put
servicers on notice that they will be scrutinizing how they handle their dual
responsibilities toward borrowers and investors.
In this environment, lenders need mortgage servicing software that automates operations from payment processing to investor reporting according to
multiple variables.
To increase servicing efficiency, choose mortgage servicing software that:
Automates servicing operations
Automation is essential for efficient servicing. According to Craig Martin, mortgage
practice lead with J.D. Power and Associates, “interacting with customers more
efficiently—and more effectively—can reduce costs and increase profit for servicers
regardless of the business model, while having the added bonus of improving
satisfaction.”
Servicers can interact with borrowers more efficiently by automating payment processing, escrow administration, and other servicing tasks with leading-edge
mortgage servicing software and APIs that allow scheduling of recurring tasks. This
allows servicers to quickly deliver accurate information and gives them more time
to respond promptly to unique borrower needs.
In addition, leading-edge mortgage servicing software that integrates with systems
such as the loan origination system (LOS) and a financial institution’s core system
allows lenders to sell loans to the Government Sponsored Enterprises (GSEs) while
retaining servicing. In-house servicing generates service fee income, provides cross-
selling opportunities, and allows lenders to provide better, more personalized
customer service.
For almost four decades, FICS has been delivering state-of-the-art mortgage
servicing software that meets the needs of servicers, investors, and borrowers.
FICS’ mortgage servicing software—Mortgage Servicer and Commercial Servicer—
automates servicing operations, improving efficiency and the borrower experience.
Mortgage Servicer, our residential servicing software, simplifies the payment
process, allows better flexibility in escrow management, and makes it easy to track
and generate reports and accounting for investors in the secondary market.
Commercial Servicer provides complete automation and seamless dataflow for
servicing complex structured loans such as commercial real estate, multi-family,
equipment, and construction loans. The flexible commercial servicing software
offers comprehensive accounting and investor reporting, escrow management, and
more to simplify the complexities of commercial servicing.
Includes web applications
According to John Cabell, Financial Services Practice Lead at J.D. Power, “The
mortgage marketplace is changing rapidly as traditional players and new digital-
native entrants ramp up their digital and mobile offerings.” In today’s digital age,
borrowers—especially Millennials—expect the mortgage process to be quick, easy,
and transparent. Accordingly, mobile or online services are important to borrowers
when accessing loan information or making mortgage payments.
According to the J.D. Power 2021 U.S. Primary Mortgage Servicer Satisfaction Study,
only 38 percent of customers said they found the desired information on their
servicer’s website within the first two pages. Overall satisfaction decreased by 55
points when customers had to visit more than two pages. Customers who indicated
they would switch lenders if given the opportunity gave these top reasons (in
addition to better rates): “better/improved customer service” and “easy access to
help myself to information about my loan.”
Web applications provide convenient, paperless access to mortgage information.
Using web application APIs to integrate mortgage services within a financial
institution’s home banking or mobile application expands the services made
available to borrowers, offers convenient access to their mortgage loan while they
are also engaged with other loan or depository type products, and helps foster a
long-term relationship.
Making mortgage information, statements, and payment capabilities available on
the servicer’s website increases efficiency for borrowers and servicers. A good
marketing campaign can significantly shift borrowers from directly contacting staff
for simple requests to conveniently accessing this information online 24/7.
Additionally, encouraging borrowers to opt out of receiving paper statements
decreases servicers’ costs related to postage, printing supplies and equipment, and
employee time. We’ve all seen rising costs because of the pandemic, so taking this
easy step can reduce expenses even more. Plus, using mortgage servicing software
and web applications to implement paperless servicing helps attract
environmentally-conscious borrowers.
Web-app-based account alerts are an underutilized way to provide exceptional
customer service and promote borrower satisfaction. Account alerts can also be used to encourage borrowers to adopt and be more active on web applications.
According to one survey, receiving account alerts via text message, secure
messages on the servicer’s website or email was associated with high customer
satisfaction.
FICS’ web applications, eStatus Connect and LoanStat, give borrowers 24/7 online
access to their loan information and allow them to make online payments. These
web applications also allow servicers to send tailored email messages to borrowers,
such as encouraging them to opt out of receiving paper statements.
Utilizes APIs
Application Programming Interfaces (APIs) streamline and automate the mortgage
processes for lenders and borrowers from origination through funding, then extend
that efficiency into servicing for
Loan Boarding
Payment Processing
Investor Reporting
Escrow Administration
APIs save time and reduce errors, providing more accurate information and giving
servicers more time to respond to borrowers’ unique needs.
Used with a scheduling tool, the Mortgage Servicer API and Commercial Servicer API
allow servicers to schedule and automate system programs, reports (such as end-
of-day and end-of-month) and interfaces, eliminating after-hours work.
Mortgage servicing software that automates servicing operations and includes web
applications and APIs increases efficiency, saving time and money and improving
the borrower experience. Learn more about FICS’ software at www.fics.com.
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