Mortgage servicers are working hard to reduce the cost of servicing, but according to a new study by Nationwide Title Clearing, unless management considers costs across the life of the loan, their efforts will remain frustrated.

Executives at Nationwide Title Clearing (NTC) have shared that mortgage loan servicers will have little chance of lowering their costs if their cost analysis does not include the entire life of the loan.

It is their finding that evaluating budgets on monthly, quarterly or annual bases will obscure some of the costs to servicers, and is an insufficient method of cost analysis.

Michael O’Connell, CEO at NTC, said in the press release: “If servicers fail to consider their costs over the entire loan lifecycle, they run the risk of incurring additional costs. This happens when they pay for the same services multiple times across different reporting periods and when they must manage multiple vendors to complete the same work.”

O’Connell said that solutions exist to reduce costs over the lifetime of loans, but that making such an investment before fully analyzing the costs the servicer is incurring doesn’t make sense. He went on to explain that life-of-loan cost analysis should be performed before servicers invest in additional cost-saving solutions. Once life-of-loan time frame analyses have been completed, choosing partners can be done with less risk and more ease.

“If servicers fail to consider their costs over the entire loan lifecycle, they run the risk of incurring additional costs.”

Michael O’Connell

Bundled services priced over the life of the loan can be the best option for reducing costs and also simplifies vendor management. NTC offers a bundled Life of Loan service platform built upon their expertise and experience that will reduce redundant tasks, control data entry points, and is fully  paperless after the first touch of the actual collateral. Bundled services typically include:

  • Document Intake
  • File Creation
  • Imaging/Indexing/Inventory
  • Secure Collateral Storage
  • Final/Trailing Document Processing
  • Collateral File Audits & Remediation
  • Exception Curative Processing
  • Exception Tracking
  • Side Letter Management
  • Default Collateral Management
  • Assignment of Mortgage/Allonge
  • Lien Release Processing

NTC is the leading post-closing services provider for the nation’s largest financial institutions, investors and servicers. NTC provides a wide range of services to the nation’s top mortgage lenders as well as to various government entities. There website can be found here.