It takes good software, but if the contract is bad, lenders still lose
Jacksonville, FL — June 25, 2024 — When the business returns, lenders and servicers will begin to look at better technology, but bad contract terms could erode any gains they hope to achieve. That’s the result of an internal study conducted at MortgageFlex, one of the industry’s original mortgage technology developers and creator of the MortgageFlexONE LOS and its companion cloud-native mortgage servicing system.
“Lenders know what tools they need, but many are not doing enough due diligence when it comes to the contract terms developers are offering,” said Craig Bechtle, COO of MortgageFlex Systems. “Our conversations with new clients, on both our origination and servicing side, have revealed that many lenders are paying more because technology developers hide extra fees.”
The devil is in the details, according to Bechtle, who says he’s hearing about a host of charges lenders and servicers must pay before their new platform ever goes into production. And that could take a long time, up to a year for some loan origination platforms, which Bechtle says MortgageFlex can have in production in as few as 75 days.
“We’ve had a glance into the RFI process of a few of our new clients and the fees they are seeing from some developers are not conducive to their long-term success,” said John McCrea, Vice President of Sales for MortgageFlex.
Lenders should carefully review any new contract and be on the lookout for fees they don’t expect or that haven’t been discussed earlier in the sales process. According to McCrea, those fees could include:
- Onboarding Charges
- Special or Per Transaction Costs
- User license fees
- Monthly cost per loan (all in)
- Cost per loan
- Inactive loan charges
- Annual cost increases
- Contract term
- Unexpected Renewal terms or long required changes
- Termination notices / fees
- Connection fees
- Cancelation fees
- Long Conversion timelines
- Loan boarding fees
- Excessive fees for accessing existing loan data
In addition, McCrea says lenders should watch out for minimums, which end up costing lenders more when times are the toughest, and customer portal charges, which cost the servicer more when borrowers have questions.
“You need a partner who cares about your long-term success,” McCrea says. “You can tell if you’ve found one by seeing what they charge you for.”
About MortgageFlex
MortgageFlex Systems develops smart software solutions for the mortgage industry, offering the most cost-effective mortgage loan origination system and servicing software for retail, wholesale, and correspondent channels. The company offers the industry’s only tightly integrated origination and servicing software, along with 24/7 support, hosting, managed services, and implementation.
MortgageFlex Systems looks to cultivate a strong partnership and is dedicated to helping reach your optimal potential with our LOS, MortgageFlexONE- “The New Peak of Efficiency.” Visit MortgageFlex or reach out to John McCrea, today at 1-860-460-7418 for a live demo.
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