Mortgage servicing is a cost center for lenders. The process of maintaining the day-to-day operations of a home loan is tedious. Between collecting monthly payments from the borrower, paying the borrower's property taxes and insurance premiums, and handling the escrow account, if one is set up, to handling any customer service inquiries and dealing with any issues that may arise, such as a missed payment or a request for a loan modification, mortgage servicing can bog your team down.
There are several reasons why a lender or investor might choose to outsource their mortgage servicing to a third-party company. Lowering your costs associated with servicing a loan will free your team up to focus on high-value tasks that add value. Some of the potential benefits of outsourcing mortgage servicing include:
| 1. | Cost savings: Outsourcing can be a cost-effective way for lenders and investors to manage their mortgage loans. Since servicing companies typically handle a large volume of loans, they can often do so at a lower cost than a lender or investor could on their own. |
| 2. | Expertise: Mortgage servicing companies often have specialized expertise and experience in managing mortgage loans. This can help ensure that the loans are being handled efficiently and effectively. |
| 3. | Risk management: Outsourcing can help lenders and investors manage the risks associated with servicing mortgage loans. For example, if the servicer fails to properly manage the escrow account, the lender or investor could be held responsible for any resulting issues. By outsourcing, the lender or investor can transfer this risk to the servicer. |
| 4. | Regulatory compliance: Mortgage servicing is subject to a number of regulations, and compliance with these regulations can be complex and time-consuming. By outsourcing, lenders and investors can ensure that their mortgage servicing is being handled in accordance with all relevant regulations. |
| 5. | Flexibility: Outsourcing can provide lenders and investors with greater flexibility in managing their mortgage loans. For example, if a lender or investor experiences a sudden increase in the number of loans they need to service, they can easily outsource the additional workload to a servicer. |
By partnering with an outsourcing provider, mortgage companies can save up to 60% on their labor costs. Companies can turn their operation into a 24/7 global team, working while competitors are resting. One of the key issues companies face is finding the right partner. When you are shopping around for the right outsourcing partner, make sure expectations are aligned and that workflows are completely understood.
Our team at Verity has years of experience working with some of the largest servicers in the U.S. Verity performs component servicing and default operations for mortgage lenders. Component servicing includes back-office servicing functions, and special servicing support services, including bankruptcy, foreclosure, loss mitigation, claims management and REO support services at a fraction of the cost, allowing you to scale up and down on demand.
Our expert team is proficient and stays current across all servicing platforms such as MSP, LSAMS, LPS, FICS and others.
Get in touch with our team to learn how much you can save with Verity.