It is a sign of both the tough economy and the changing regulatory environment for mortgage servicers that they are upgrading the technologies they use to manage mortgage defaults.
Arvest Bank, an institution based in Bentonville, Ark., that acts as both a mortgage originator and a mortgage servicer, has upgraded its default management system in the hopes of becoming more efficient, better serving customers and preparing for new rules written by the Consumer Financial Protection Bureau. Arvest Mortgage Co. services the loans that Arvest Bank originates; Central Mortgage Co. services mortgages that it didn't necessarily originate.
The company has been a long-time customer of mortgage default technology provider DRI, which was bought in July 2012 by Pittsburgh-based ServiceLink. "Early on we invested in our servicing platform and default management system in order to have the efficiencies and tracking mechanism that ultimately will make us more effective and benefit our customers," says Rodney Bechdoldt, vice president and mortgage systems manager at Arvest. The bank upgraded to ServiceLink's Fusion default management platform in June.
The upgraded platform provides more automation, better reporting, and better tracking of checklists, tasks and milestones related to loans and loss mitigation, to help servicing agents stay on top of the process and better respond to customer questions, Bechdoldt says.
"Having as much information as you can when you're having a discussion with the customer is really important," he says. "Having that data automatically compiled has become vital because there's been an increase in the amount of information we have to track as a mortgage servicer."
The CFPB recently issued new rules amending Regulation Z, the Truth in Lending Act, and Regulation X, the Real Estate Settlement Procedures Act. The rules revise mortgage servicing standards to provide greater protection to homeowners facing foreclosure, as mandated by the Dodd-Frank Act. The CFPB is requiring more from mortgage servicers—more contact and accessibility, more transparency, and more procedures and policies to protect struggling homeowners. The changes take effect in January 2014.
"There are more regulations coming out and new timelines; this is an ever-changing environment," Bechdoldt notes. "Upgrading to Fusion has positioned us well to respond sufficiently and accurately to those changing market conditions. We haven't done a lot of analysis on time savings, on a per-load or per-milestone basis, but we can see the benefits of being able to using the technology."
Implementation of the software took about nine months. "Within that timeline we did a lot of data conversion checks, end user training, and migration testing to make sure all the data was coming over as we intended and was being cross-referenced as we intended it to be, so we didn't lose any of data quality of information," Bechdoldt says. "That process went very smoothly."
If he had to do it over again, one thing Bechdoldt would do differently is conduct more side-by-side analysis of how the new software would affect the daily workflow of data entry. "With any new system, that is going to change and while we did train on the new system, we would have spent a bit more time examining the process for our end users."
The newer platform lets associates access mortgage information more efficiently. "This software helps with our review, making sure i's are dotted and the t's are crossed and that we're adhering to all the regulations," he says.