In terms of service solutions, what should lenders look for?

It’s time to reassess your service as borrowers exit forbearance. Many have turned to their service business to grow revenue in the face of rising IPass interest rates and squeezed margins. Partnering with borrowers exiting forbearance programs, on the other hand, adds an extra layer to an already complicated task, thereby increasing costs. To accomplish their servicing goals, lenders need sophisticated, efficient mortgage software systems that can thread the needle between the many interests of borrowers, investors, and regulators.

Investor guidelines have been updated.

Borrowers departing forbearance plans have a variety of alternatives, all of which require servicers to inform and place borrowers into suitable work-out plans in a seamless, flexible manner. Those choices, on the other hand, impose additional obligations on investors, such as reporting principal and interest collecting activity, drafting money owed to the investor, resolving any reporting or drafting disputes, and reconciling custodial accounts.

To make matters even more confusing, the two largest investors, Fannie Mae and Freddie Mac are still adjusting their criteria in the face of the global pandemic’s unpredictability. The stakes are high. Some of the flexibilities put in place during the pandemic have been removed, and servicers have been warned that their dual obligations toward borrowers and investors will be scrutinized.

Lenders need mortgage servicing software that streamlines activities from processing payments to investor reporting based on many criteria in this context.

Choose mortgage servicing software that meets the following criteria to improve efficiency:

Service operations are automated.

For effective servicing, automation is required. “Interacting with consumers more efficiently—and more effectively—can cut costs and boost profit for servicers regardless of the business model, with the bonus of improving satisfaction,” says Craig Martin, mortgage practice lead at J.D. Power and Associates.

With cutting-edge mortgage servicing software and APIs that allow scheduling of recurring operations, servicers may connect with borrowers more effectively by automating payment processing, escrow administration, and other servicing tasks. This helps servicers to supply correct information more quickly and respond to particular borrower demands more quickly.

Furthermore, cutting-edge mortgage servicing software that connects with systems like the loan origination system (LOS) and a financial institution’s core system enables lenders to sell loans to GSEs while maintaining service. In-house servicing produces revenue from service fees, enables cross-selling, and allows lenders to deliver better, more personalized customer support.

FICS has been providing state-of-the-art mortgage servicing software to servicers, investors, and borrowers for nearly four decades.

FICS’ mortgage servicing software (Mortgage Servicer and Commercial Servicer) automates operations, increasing efficiency and improving the borrower experience.

Our residential servicing software, Mortgage Servicer, streamlines the payment process, improves escrow management flexibility, and makes it simple to track and generate reports and accounting for secondary market investors.

For servicing complicated structured loans such as commercial real estate, multi-family, machinery, and construction loans, Commercial Servicer delivers complete automation and smooth dataflow. The versatile commercial servicing software simplifies the intricacies of commercial servicing by providing complete accounting and investment reporting, escrow management, and more.

Web apps are included.

“The mortgage business is fast shifting as traditional players and new digital-native entrants scale up their digital and mobile services,” says John Cabell, Financial Services Practice Lead at J.D. Power. Borrowers, particularly Millennials, expect the mortgage process to be quick, straightforward, and transparent in today’s digital age. As a result, whether it comes to accessing loan information or making mortgage payments, borrowers value mobile or online services.

Only 38% of consumers indicated they found the information they needed on their servicer’s website within the first two pages, according to the J.D. Power 2021 U.S. Primary Mortgage Servicer Satisfaction Study. When clients had to visit more than two pages, their overall satisfaction dropped by 55 points. Customers who said they would switch lenders if given the chance cited “better/improved customer service” and “easier access to help myself with information regarding my loan” as the top reasons for doing so (in addition to better rates).

Mortgage information is accessible via web applications, which eliminates the need for paper.

Using web application APIs to integrate mortgage services into a financial institution’s home banking or mobile app expands the services available to borrowers, provides quick access to their mortgage loan whenever they are also involved with other loan or depository type products, and aids in the development of a long-term relationship.

Borrowers and servicers benefit from having mortgage information, statements, and payment capabilities available on the servicer’s website. An effective marketing effort can help borrowers move away from calling staff for simple inquiries and toward conveniently getting this information online 24 hours a day, 7 days a week.

Encourage borrowers to opt-out of getting paper statements to save money on postage, printing supplies and equipment, and personnel time for servicers. We’ve all experienced rising expenditures as a result of the pandemic, so this simple action will help you save even more money. Furthermore, implementing paperless servicing using mortgage servicing software and web applications attracts environmentally sensitive borrowers.

Account alerts via a web app are an underutilized tool to provide excellent customer care and increase borrower satisfaction. Account alerts can also be used to encourage borrowers to use web applications and become more engaged.

Receiving account warnings through text messages, secure messages on the servicer’s website, or email was linked to high customer satisfaction in one poll.

eStatus Connect and LoanStat, two FICS web services, provide borrowers with 24/7 online access to their loan information and allow them to make online payments. These web apps also enable servicers to send borrowers personalized email messages, such as urging them to stop receiving paper statements.

Utilizing APIs

Application Programming Interfaces (API) streamline and automate mortgage operations for lenders and borrowers from origination to funding, then extend that efficiency into servicing for 

  • Loan Boarding 
  • Payment Processing 
  • Investor Reporting 
  • Escrow Administration

APIs save time and eliminate errors, resulting in more accurate data and more time for servicers to respond to borrowers’ specific requirements.

The Mortgage Servicer API and Commercial Servicer API, when used with a scheduling tool, allow servicers to schedule and automate system programs, reports (such as end-of-day and end-of-month), and interfaces, reducing after-hours work.

James C. Tibbs