It’s no secret that the mortgage servicing sector is under severe strain, especially when it comes to loss mitigation and default management. In response to massive distressed borrower volumes, servicers have hired armies of new, inexperienced servicing reps and asked them to manage loan modifications for a wide variety of complex borrower situations. This is happening even as fundamental regulatory change is being introduced (e.g., RESPA) and loan modification programs are shifting beneath servicers’ feet.
Meanwhile, the Treasury Department and the courts are pushing for faster loan modifications while investors who have interests in such loans are balking at the kinds of concessions necessary to make the needle move. Thus, servicers find themselves between a rock and a hard place as they face the flood of modification requests.
Because this deluge happened suddenly and is still roiling the industry, there has not been time to automate many of the standard tasks involved in the loan modification process. Indeed, compared to the origination side of the business, servicing automation – or workflow management – is relatively undeveloped . This is certainly true in mortgage quality control, which is why Cogent can tout that ServicingQC is the only quality control system developed specifically for mortgage servicing.
But as a recent piece in MortgageOrb confirms, it’s the case in default management workflow systems, too, and no doubt in other servicing sub-processes.
On the positive side, mortgage servicing is finally getting some attention. With luck, we will see promising technology solutions at the MBA Servicing Conference, which is gathering this week in San Diego. And given the pressure from inside and outside the industry, we should start to see some adoption of new solutions.
Currently, the biggest enemies of efficient workflow are paper and the telephone, as the MortgageOrb article reiterates. Both are inefficient, hard to track and prone to error and both are legacies of the traditional workflow of mortgage lending and servicing. Now that the light of day is shining on the servicing world, we can hope that new technology adoption will lead the way to the Promised Land of eMortgages.