In previous posts, we addressed the facts that the mortgage servicing business is in need of a disruption. However, any disruption that occurs must be driven by the mortgage servicers themselves, supported by their technology partners.
How exactly the servicer chooses to disrupt their own business and, by extension, the rest of the industry, will depend upon the servicer’s unique vision and appetite for risk. There is no template that can be applied across the industry.
What we can do is determine what elements must be built into modern servicing technology platforms that will be most likely to empower servicers to make disruptive changes in their own businesses.
Without the right set of features and benefits, these companies will find it very difficult to innovate and impossible to disrupt either their own businesses or anyone else’s.
The elements that matter in a servicing technology platform
It is not our intention in this post to describe any existing technology, but rather to arrive at a base set of functionality that will finally allow mortgage servicers to take full control of their businesses. When they do, we expect the innovations they create will be very disruptive to the industry as a whole.
We’ll approach this from a number of angles, including the expertise of the developers, the architecture of the platform and the functionality it offers.
The developers must have broad experience
You can assemble a team of experts who are very good at developing a certain type of software, but if they do not also have experience on the team with the other platforms that must integrate with it, there will be blind spots in the development. This will lead to limitations in the functionality or, worse, an inability to connect seamlessly with other necessary software systems.
We see this often on the servicing side of the mortgage business as most developers have developed their expertise and written most of their software for the origination side. Those who have specialized in building servicing software have little experience in the new loan origination systems.
The ideal would be to have a technology partner who employs experts on both the servicing and the origination side of the business as well as experience building software for some of the third-party partners who must provide data to the servicer.
MortgageFlex offers a range of software solutions that together offer the ability to originate and service any type of loan in a single platform. The servicing software allows servicing for both performing and non-performing assets or loans, as well as default servicing.
The software should be newly architected, not rearchitected
Some servicers in our industry are still operating with software that was written 50 or 60 years ago. While these applications have been updated over the years, there is no comparison between an old system with a new user interface and a newly architected system based on the latest technologies.
Updating software that was developed decades ago to take full advantage of the tool’s developers have at their disposal today is impossible. The software must be rewritten.
On the plus side, newly architected software can often make easy work of uploading data from an older platform. In many cases, the data can be transferred from system to system with minimal effort, with built-in data validation. In other cases, an imaging system can convert documents in storage into digital information that can easily be appended to each borrower’s record.
The technology should make integration simple
We have already discussed how a good servicing platform must make it simple to integrate with other platforms in order to seamlessly share data between partners. If the development team is experienced and the software is built on the latest architecture, most of this will take care of itself on the back end.
But the user experience is also important. The days of swiveling to a new screen to see a different interface are over. A modern servicing platform should have all of those screens built in, so the user never has to switch focus to another monitor or platform to complete their work.
Our developers have over 30 years of software development experience and they still see servicers frustrated by the need to swivel between systems. It’s time to move on.
Enterprise data should be centralized and protected
Data security is and will continue to be a critical concern for everyone in our industry. While it is possible to share data in a secure manner between trusted systems, storing data in multiple locations opens up the servicer to additional risk.
All client data should be stored in a single, secure database. In our case, we rely on a SQL server located in a secure Microsoft cloud-based environment. This allows our servicing customers to access their software from any browser on any device at any time, night or day.
The borrower portal makes it easy for borrowers to make payments, check the status of their loan or explore what-if scenarios for making additional payments. Self-service makes it possible for borrowers to get anything they need, including the answer to virtually any question, without calling upon the servicer’s personnel.
It must be extensible by the servicer
One of the most serious limitations that older software has visited upon mortgage servicers is the inability to adapt their systems to a changing world. Older software does not offer servicers the ability to make changes to their own workflows and while developers will promise to add requested functionality, they rarely deliver it on time. In many cases, the new version never materializes.
At MortgageFlex, our templates give any experienced servicer the ability to create their own workflows and extend the servicing system as required to take full control of their businesses.
In the next post, we’ll talk about what we have built for servicers at MortgageFlex and how it conforms to the basic requirements for a platform that will allow servicers to disrupt their industry. And how we’ve gone far beyond that.