Commercial Servicing Platforms of the Future
Ms. Eshoo is president and CEO of National Tax Search, based in Chicago.
Effective data exchange capabilities are crucial for the efficient management of commercial servicing portfolios. However, despite the tremendous increase in efficiency this would bring to lenders, the majority of servicing platforms do not accommodate tax and insurance data exchange with outside vendors. It's troubling that in this day and age, something as fundamental as human error in rekeying tax and insurance information from one source to another is still such a prevalent problem.
This vendor data is extremely valuable to lenders, as well as highly recommended by the ratings agencies. And yet, far too often, lenders are left to devise a way to transfer that information from vendor systems to their loan management platforms. Such great inroads have been made to enable property data information sharing via initiatives such as MISMO that we wonder why leading servicing platform vendors have yet to enable similar data sharing capabilities associated with other critical information fields.
For example, when dealing with property tax data, there are three primary areas of change that must be accounted for: changes that relate to the loan and asset, jurisdictional changes and changes in the parcel itself. A common method for getting data updates electronically transferred and seamlessly fed into the servicing platform should be available, but in most cases today, it isn't. While there are some individual platform vendors moving in this direction, they are very much the exception to the rule.
Another immensely beneficial factor for lenders would be the ability to enable automatic rolling of disbursement dates. As soon as there is a disbursal of a tax payment, the loan record within the management system should automatically roll to the next property tax payment date, without the manual intervention of the lender's staff. Again, while simple, this is a surprisingly rare feature in the majority of servicing platforms.
The advent of service oriented architectures has made it possible to develop common plug-and-play interfaces to facilitate data exchange with multiple third-party tax, insurance and other vendors that support servicers. An open standard for integration would allow end-users the greatest degree of vendor choice, and promote ease of interoperability and data exchange between different platforms. Most importantly, such a standard would provide these benefits without requiring complicated integration development on the part of the lender.
Everyone, vendor and lender alike, wants ease of data exchange, but movement in this direction has been much too slow. The truth is, this sluggish pace will continue until lenders and servicers begin to actively campaign for better data sharing capabilities. Whether this comes by way of third-party interface development or by action on the part of servicing platform providers, demand must be the driver before this functionality will be introduced into the market on a widespread basis.
We all have the same goal, regardless of which side of the business we're focused on - to offers products that are as effective for the end-user as possible. As the industry moves into the future, data exchange will become more important as companies work to eliminate human data entry error, increase efficiency and encourage the seamless sharing of information.
Servicing platform vendors will find themselves ahead of the pack if they can incorporate the ability to import data from as many different third-party services as possible. In addition, avoiding the need to build three or four custom interfaces for every client will cut the costs and time to deployment, while at the same time adding value to their product.
The mortgage servicing industry should take their cue from the success of data standards initiatives such as MISMO and step up the deployment of SOA. There has been so much progress in terms of increased efficiency and the sharing of data across the entire industry that it makes little sense to leave stumbling blocks in the path of future advancement. (c) 2006 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com