Discover a reliable mortgage subservicing company for efficient management of your mortgage portfolio. From loan administration to customer service, trust us to handle your mortgage servicing needs with professionalism and expertise
Your mortgage loan servicer is responsible for managing your payments and escrow account (if applicable). They can also help you with questions about foreclosure or loss mitigation options.
1. Look for a Reputable Company
You can usually find the name of a mortgage loan servicer on your monthly statement or online account. You should also be able to reach them via phone or email.
While most homeowners don’t have much control over who services their mortgages (Lenders can choose to transfer them or keep them), if your lender decides to transfer it, you should take the time to do research to ensure that they are a good fit. As we learned during the COVID-19 pandemic, a bad servicer can create a lot of headaches for borrowers.
Choosing a reputable company can help to reduce delinquencies and improve loan performance, thereby adding value for investors and mortgage servicing rights holders. To select the right subservicer, look for a company with strong industry experience and expertise in customer service, regulatory compliance, technology and more.
2. Ask for Referrals
In the mortgage business, referrals are often more successful than cold leads. Having a strong network of trusted referral partners and clients will help keep the pipeline full of new mortgage business. To build your mortgage referral network, start by asking previous clients and other lenders for recommendations.
In addition to word-of-mouth, a well-crafted marketing strategy can also be effective at getting more mortgage loan referrals. A professional and easy-to-navigate website, email newsletters, and targeted ad campaigns can all help to attract and engage potential referral partners.
Mortgage loan servicing is a critical service that has a direct impact on the success of your credit union. For this reason, it is important to choose a subservicer that you can trust. By taking the time to find the right company, you can ensure that your mortgage loan servicing needs are met with the highest level of professionalism.
3. Talk to Multiple Lenders
It’s important to talk to multiple lenders when shopping for a mortgage. This will help you get a better idea of the types of loans that are available and will allow you to compare rates and fees. It’s also a good idea to ask for a detailed description of the loan terms so that you can understand exactly what you’re getting into.
Mortgage servicers are responsible for collecting and remitting mortgage payments, managing escrow accounts for taxes and insurance, and addressing delinquencies. Many financial institutions choose to sell their servicing rights to reduce their risk and costs.
In order to make a successful switch, lenders should perform a thorough analysis of their current business and future goals before selecting a subservicer. This should include examining customer service levels, technological capabilities, and overall fit. This can help a lender to find a mortgage subservicer that is the best match for their organization.
4. Look for a Company with Experience
It’s important to look for a company with experience when it comes to mortgage servicing companies. This is because many lenders outsource their loan servicing, and it’s important to know who your servicer is before you sign on. It is also important to make sure that the company you choose is reputable and has good customer service.
Economic, regulatory and consumer pressures have forced mortgage servicers to review their operating models based on their unique portfolio conditions. Whether it’s cost, technology, infrastructure, or risk tolerance, the right subservicing partner can provide financial institutions (FIs) with a high return on their investment. During a recent Five Star webinar, Donny Atkins, Director of Servicing for The Money Store; Chris Sabbe, SVP of Sales at PHH Mortgage; and Seth Sprague, Director of Consulting Services at Richey May discussed the latest industry changes, what to look for in fees, and the pitfalls involved in transferring loans.
5. Ask for a Comparative Price
Mortgage loan servicing is a critical part of mortgage banking and choosing the right company can have significant impacts on your borrower relationships. It is important to take the time to select a quality subservicer that will work with your borrowers and provide top-notch service.
The first step in selecting a mortgage loan servicing company is to compare pricing. This is a crucial step, as the cost of mortgage loan servicing can make or break your business.
To help you with this, Sabbe recommends asking a potential subservicer to provide pricing on their “bottom line,” including the full cost to serve a residential mortgage and the profit margin they would require. This provides a more accurate high-level comparison than looking at only pricing alone. This is because the true price of mortgage servicing includes costs such as re-escrow fees, foreclosure attorneys, and other administrative expenses.
6. Look for a Company with a Strong Customer Service Department
While you may not realize it, your mortgage loan servicing company plays a crucial role in your mortgage experience. Your mortgage servicer manages your loan payments, tracks your payment history, and helps you with any questions or issues that may arise.
Many lenders don’t service the loans they originate, but sell their servicing rights to third-party companies that specialize in this area. These companies are known as subservicers and handle various tasks, including receiving and processing your mortgage payments, managing your escrow account, providing tax forms, and assisting with customer inquiries.
As a result, mortgage servicers and their clients have become increasingly important to the housing market. But with rising interest rates expected to reduce the demand for refinancing, some mortgage servicers are struggling to keep up with the demands of the market. Fortunately, some have taken steps to improve their customer service departments.
7. Look for a Company with a Strong Technology Department
Lenders are increasingly looking to subservicers in order to reduce costs and streamline their operations. In an era where mortgage originations are harder to come by, it is more important than ever for lenders to find ways to reduce expenses and increase efficiency. A company with a strong technology department is one way to do just that.
Mortgage servicing companies typically work with loans backed by government agencies or enterprises (Ginnie Mae, Freddie Mac, etc). Lenders sell your loan’s servicing rights to these third parties after originating it. This allows them to focus on generating new mortgages. In this environment, where interest rates are rising, servicers may see higher profits from loan retention than refinancing. Economic, regulatory and consumer pressures are prompting servicing companies to reassess their operating models (in-house, subservicing and hybrid) to determine which is best for them. Each model has profitability, risk and customer experience implications, which must be balanced with their portfolio size growth outlook, investment appetite and core competencies considerations.
8. Look for a Company with a Strong Accounting Department
Your mortgage loan servicer is a company that manages the payments, taxes, escrow account and other aspects of your home financing. Most mortgage lenders do not service their own loans, instead they sell the servicing rights to other companies that handle all aspects of managing your home finance, including tracking payments and responding to questions.
Sprague emphasized that it’s crucial to examine the base price and cost structures of each subservicer to ensure adequate compensation. He also suggested that a personalized welcome letter or intro video can help reduce customer confusion over changes in escrow balances when a servicing transfer first occurs.
Economic, regulatory and consumer pressures are prompting servicing providers to reassess their options—in-house, subserviced or hybrid servicing models. Each option has profitability, risk and customer experience implications that servicers must balance with their current operating model, portfolio size growth outlook and investment appetite considerations.
9. Look for a Company with a Strong Risk Management Department
When it comes to mortgage loan servicing, a strong risk management department is key. The company needs to have the ability to quickly identify risks and issues that could impact borrowers and investors. They should also be able to provide timely resolutions.
The housing market meltdown brought increased scrutiny to the securitization of mortgage loans. As a result, many big banks have begun to back away from the mortgage servicing market. This has led to a rise in non-bank and regional companies entering the space.
Residential mortgage subservicing provides a great way for PFIs to reduce costs, ensure compliance, and stay seamlessly connected with customers. Midwest Loan Service offers a full range of mortgage loan services to help ABA members increase profit, mitigate risk, and deliver a better customer experience. Their innovative technology creates cost-reducing efficiencies, making them more competitive than most bank servicers. They also offer vendor management oversight tools that simplify servicing regulations and CFPB requirements.
10. Look for a Company with a Strong Marketing Department
Mortgage loan servicing is at a critical juncture, with increased regulatory scrutiny, potential economic challenges and new borrower expectations. While some PFIs may think it is more cost-efficient to retain mortgage servicing in-house, the truth is that performing this function in-house comes with many hidden costs and risks. These include obtaining the proper expertise, maintaining a mortgage servicing system and building the bandwidth to address all compliance issues.
As a result, it can be far more cost-efficient to partner with a company that is experienced in subservicing. In addition, it is important to look for a company that offers the right technology tools to ensure the best customer service and satisfaction. Ultimately, this can help to strengthen the relationship between the lender and borrower. And in today’s rising interest rate environment, this is essential for borrowers.
