Servicer Switches to Cut Costs
Southfield, MI-In an effort to cut costs and embrace Web technology, Ofori Lenders Services here has opted to switch off of its current servicing system in favor of McDonald Computer Corp.’s Web/T.I.M.E. solution.
Company officials cite dramatic cost savings on technology expenses as one of the primary reasons for the move. “The contract on our system was coming up for renewal. Being a small company, you have to be cost effective,” explained Karen Heller, Ofori Lender Services servicing manager. “We met McDonald several years ago to discuss the system. We were very impressed then so we asked to demo the system. We made the determination that this was a good time to switch.
“Initially I felt the most comfortable with Fidelity. I had used it for 20 years. The technology is wonderful, but it wasn’t cost effective. Over the years, we’ve had large portfolios. We do a lot of work for the government. We’ve had up to 100,000 loans and now we have 5,000 loans. We wanted something Web-based.”
Web/T.I.M.E. is a Web-based mortgage loan servicing system that is offered in a service bureau environment. The technology is a fully integrated, online, real-time mortgage loan investor servicing system. OLS users will have access to screens that are organized to perform cash processing, escrow disbursements, default servicing, investor reporting, customer service, escrow analysis, year-end reporting, inquiry and file maintenance.
Regardless of the features, many servicers are reluctant to move away from either Fidelity or Fiserv. “We were guilty of the same thinking,” added Ms. Heller. “We all resist change. Nobody wants to change when you’re comfortable. However, with the economy being what it is I think you’ll see more companies switching.
“We’ve been on the new system for a year now. My staff loves the system. So far, everything has gone very well. We were set up on a test system first. We played with the system. We were able to get comfortable with it. So when we converted it went smoothly.”
“This client has some unique needs,” added James McDonald, president of McDonald Computer Corp. “There were some adjustments that we made for them. We’ve been in the business for over 30 years so we’ve serviced every type of loan. Our forte is about being flexible to accommodate new portfolios. We’re not Fidelity or Fiserv, and that works to our benefit because we can respond faster to client needs.”
Industry experts agree that servicing costs will be an expense many financial institutions pay close attention to in the coming months. According to Jeff Lebowitz, owner of MORTECH LLC, and publisher of the annual MORTECH survey on lender behavior and technology use, “In this increasingly difficult mortgage environment, investors are micromanaging their servicers. To make sure there is sufficient yield for them, servicers more than ever must bear down on operating and communications costs.”