Retaining Servicing Provides a Competitive Advantage to Lenders in a Challenging Mortgage Market

Managing a profitable mortgage business can be challenging in the best of markets. When rising interest rates and plummeting affordability decimate loan applications, it’s even more difficult. Mortgage Servicing Rights (MSRs) are valuable assets for mortgage lenders when origination business is slow. Maintaining the servicing rights of loans originated by the lender is equally as important as those acquired through a purchase. Whether they are servicing loans held in the financial institutions’ own loan portfolio, sold to investors servicing retained, or servicing rights that were purchased, mortgage servicers must use all the tools at their disposal to expand borrower relationships and keep their borrowers in their overall servicing portfolio.   

Servicing retention generates servicing fee income and helps servicers improve the customer experience. Modern loan servicing software automates investor reporting and compliance and creates a more efficient workflow, allowing servicers to effectively service loans in-house.

By automating investor reporting, mortgage servicing software makes it simple for servicers to regularly report payment and default activity to the GSEs. These reports must include daily and monthly funding requirements, satisfy other specific reporting requirements, clear any discrepancies, and reconcile the custodial accounts. The leading mortgage servicing software platforms support all industry-standard reporting methods; produce reconciliation, remittance, delinquency, prepaid and balance reports; and perform advance and recovery of Principal and Interest (P&I) and Taxes and Insurance (T&I).

Read the MBA Newslink article.