Lending Slowdown Puts Focus on Performance

It's not just the mega-servicers that have to worry about squeezing as much value as possible from their mortgage servicing portfolios. Small and mid-sized lenders are paying more attention to their portfolios as well now that origination volume is slowing down.

Cary Burch, president of Lender Support Systems, Inc., told MSN Bulletin that his company's clients are looking for new ways to analyze and understand their servicing portfolio. And the company has seen an increase in inquiries about its servicing technology since formally rolling out the enhanced system.

LSSI's new Servicer 3D loan servicing platform expands upon reporting capability and data analytics. Servicer 3D replaces LSSI's LoanBase Servicer application.

Mr. Burch said between 300 and 350 customers, mostly community banks, credit unions and other small to mid-sized lenders, are using LSSI's servicing technology.

The new system runs on a newer Microsoft platform with 32 bit architecture. That framework improves the users access to data and includes a redesigned workflow, Mr. Burch said. The investor accounting system can be used by lenders for interim, pass-through or retained loan servicing, and it is scaleable up to 100,000 loans, Mr. Burch said.

While Servicer3D is primarily used for managing residential home loans, Mr. Burch said it can be used to service other products as well, including commercial property and auto loans. Seattle's famous Space Needle backs one intriguing loan on the system. (Try finding comparables for that appraisal!)

In June, Pecos Mortgage, of San Antonio, Texas, became one of the early lenders to complete an upgrade to the Servicer3D platform.

Now, with delinquencies rising and a new emphasis being placed on loss mitigation, servicers are in even greater need of technology to make their operations more efficient, Mr. Burch said.

Early payment defaults, loan origination fraud, and the subprime crisis all have created an environment where loan servicing costs are on the rise.

"It really changes the way they do business. They have to staff up. So the cost of servicing a loan has gone up substantially," Mr. Burch said.

Servicer 3D is designed so that it can be used simultaneously with Crystal Reports, a prominent reporting application in the industry.

Mr. Burch said Servicer 3D also allows users to create links to data sources, such as loan origination software and document preparation through a fully integrated import route.

He said that inquiries from lenders are increasing because lenders want more data about their portfolio that they can use in decision-making. He believes the interactive, dashboard approach of the new system should facilitate that.

"For the most part, the servicers are looking for more ability to do analytics and reports," Mr. Burch said. (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.bondbuyer.com/ http://www.sourcemedia.com/