A blog article on mortgage servicing processes. The process is broken down, and the benefits of outsourcing are outlined.
Mortgage Servicing Process
Lenders typically employ a third-party company to provide mortgage servicing. This service can be either outsourced (subcontracted) or in-house. Outsourcing means that the lender pays an outside firm to handle all aspects of the loan, including taking payments, collecting documents, calculating interest and fees, and notifying borrowers of their payment status. In-house servicing is when the company does everything itself. Lenders will often outsource mortgage servicing to take advantage of economies of scale and specialization or because they lack skilled staff for servicing loans.
The mortgage servicing process is the work of handling the various payments, taxes, and other obligations associated with owning a home. It is arguably one of the most important parts of life. The interest rates are at an all-time low right now, which means that homeowners have an opportunity to refinance their homes while they can.
Benefits of Outsourcing
Outsourcing means hiring a third party to handle your accounts receivable and other such tasks. This helps in saving on labor costs, which helps in increasing the return on investment for your company. It also helps in minimizing errors and oversights, which is especially important if you’re dealing with sensitive information like financial records and customer data.
When you have specialized mortgage servicing needs, outsourcing your back office operations to a third party provider is the smartest move. Outsourcing your operations will free up your staff to focus on higher value tasks. This includes finding new clients, marketing, and more. It also allows you to have more time for licensing or expanding your business.