While rising interest rates have quelled the market for mortgage originations, they have increased profits for mortgage servicers, who are doing quite well these days. But that might not last very long.
For one, the regulatory breathing room servicers enjoyed while they helped struggling borrowers during the pandemic is now over. In fact, the Consumer Financial Protection Bureau has warned servicers that the agency will be watching their operations more closely.
Meanwhile, rising inflation, economic uncertainty and geopolitical events are fueling new concerns about the housing market. Should we see an increase in borrower delinquencies and defaults, servicing costs will inevitably rise as well.
Related: How to Keep Borrowers Happy in Today's Digital Age
For these reasons, many companies are reexamining whether their mortgage loan servicing software will be able to handle these challenges. We think servicing software is up to the task—if it possesses the following traits.
All servicers share the same goals, but they achieve them differently. As a result, they need technology that can be customized and tailor-fitted to how they do business.
For example, when rates rise, many originators transition to a wider range of loan products, such as bank statement loans for self-employed borrowers. Servicers that originate or buy the mortgage servicing rights for these loans need software that can streamline their secondary marketing department activities and enable cash and escrow processing, investor reporting and MBS pool reporting for any loan type, including non-QM loans.
The growing risk of an economic recession also means their mortgage loan servicing software must handle all aspects of default management, including collections, bankruptcy tracking, foreclosures and loan payoffs—whether they expect to need these features or not.
Related: How the Right Technology Can Lower Servicing Costs
All mortgage loan servicing software providers claim their products are affordable. But what does that really mean?
To us, it means having a pricing structure that is completely transparent, with no surprises. There is no reason not to provide software on a per loan cost basis, or not to have easy-to-understand pricing for additional services when they are needed. These pricing structures not only make costs more predictable, they also enable servicers to scale business more easily as well.
As the mortgage industry continues to grapple with cyberattacks, your mortgage loan servicing software absolutely must keep your borrowers’ data safe.
Related: Is Your Servicing Technology Hacker-Proof?
For example, your software should be audited every year for SOC I Type 2 certification, which ensures your provider practices strong internal controls. It also helps if it’s delivered through a trusted cloud provider, such as Amazon’s government cloud, which offers a higher level of security than most online businesses can provide.
With cyber threats continuing to grow, your provider should also protect your data and systems with end point detection and response (EDR) and 24/7 threat hunting, which proactively search for security breaches and malicious activity.
Part of what makes servicing software cost-effective is how much time and effort you must spend ironing out technical issues and getting help when you need it. After all, time is money, and servicing is a time-sensitive business.
One of the most common complaints we hear from other servicing software providers is a lack of customer support. If you have a question or an issue involving your mortgage loan servicing software, you need to get someone on the phone quickly—not a day from now, or even an hour.
Related: What the CFPB's Servicing Metrics Mean for Your Business
MCC Mortgage Solutions has all the traits listed above. Our proven, compliant software empowers banks, credit unions and servicers to handle virtually any servicing strategy. We’ve helped service more than 10 million loans of all types, and we’re able to able to customize our software to fit the needs of any customer.
Learn more about MCC's servicing functionality.
We also continue to roll out new functionalities based on the latest technologies, including cloud-based delivery and online tools for borrowers. And with the threat of cyberattacks, we take serious precautions to make sure your data is secure. In fact, by this summer, our cloud-based systems and network should be in line with FedRAMP, the U.S. government’s compliance program that establishes baseline security for cloud-based products and services.
If you’re ready to experience the most dynamic, flexible, secure and cost-effective mortgage loan servicing software available in the housing market, just reach out to us at 248-350-9290 or drop us a note to email@example.com.