Venture Encoding Complements Paper Products with Electronic Technology

Kenny Hargis, president of Venture Encoding Service Inc. here, is bringing to the Mortgage Bankers Association servicing conference his company's most important showcase: technology. What he is looking forward to the most though, is direct contact with other participants and grass-root level networking.

He sees networking at the conference site as a business advantage.

"We are very vertical oriented. In other words we focus on the mortgage industry only and in order to do that we have to use every opportunity to create new contacts," he said. "This is the biggest gathering of the servicing crowd."

In his view, as Venture's Internet-based system is constantly going through process enhancement changes, the MBA servicing conference is by far the most important industry event and the best place to introduce new product development features to clients.

"Servicing conferences are a great gathering place for us, because usually servicing managers are there, as well as other front-line servicing people, differently from the other national MBA conferences where you usually meet the most senior executives, who are a little aloof from the specific servicing issues," he said.

So, as usual, there will be a Venture booth to showcase company products and at least a half dozen Venture representatives.

"You see customers you normally do not get to meet, so it's a chance to meet them once a year," he noted. "Most importantly what we try to do is get new prospects, folks that we can get interested in our products. Conferences are a good place to do that."

Venture's marketplace consists of mortgage servicers who outsource their client-related electronic files to Venture, so it can mail-in various documents to their customers, such as the print-mail of monthly statements, delinquent letters, escrow analysis, payment books and other documents. Mr. Hargis said the company makes sure "to have a very strong booth presence" that allows the company to demonstrate product features, "especially our electronic services."

Before attending the conference, Venture executives follow up with the conference schedule of events during the working sessions and on the exhibit floor.

"There is a lot going on at the conference," the executive said. "But definitely, it is a great opportunity for us to do some socializing and that is the most important part of the experience."

Venture operates several modules that support paper products and various printed statements it delivers by mail using a rather long list of electronic services that accompany these paper products. The system includes electronic bill presentment, bill payment and mail tracking.

"Mail tracking is a real hot item for us and we'll continue to add to its list of products," he said.

When mail is sent out to the customer, he explained, it is coded so that once the customer puts a payment back in the mail using the return envelope, the post office can track that piece of mail, than related data are gathered and reported back to Venture. It helps avoid mailing out unnecessary delinquent account warning notes, or direct calls to customers. According to Mr. Hargis, Venture has seen as much as 12%-17% of such delinquency calls being canceled due to notification from the mail tracking system.

"We are enhancing the technology to be able to do lock-box auditing, those are the payment processors that mortgage servicers use to post payments," he said. "That's a big deal because what the so-called subprime guys are being looked at for is time of payment tracking. So technology has helped identify how long it takes the processors to post these payments."

He is proud of additional reporting capabilities added to the technology. Features such as the stopping collection calls tool have helped the collections department, while other features helped increase lock-box efficiency that affects payment processing and treasury management.

However, being successful in the marketplace means following industry trends and developments, Mr. Hargis agrees.

"I think consolidation is the name of the game, in all levels now," he said.

"My competitors are consolidating as are our customers."

One recent example, he said, is the merger of Bank of America with FleetBoston, which shows how "the servicing shops are becoming larger and larger."

"This merging binge has slowed down from time to time, but for the last couple of years that's what you see. I can remember when a large servicing shop was 100,000 loans," he noted. "Today some of the larger servicers up there are servicing two million loans or better."

He finds these "big gorillas do not move very much," but they are very demanding and very large "so they can make or break it."

He believes that "boutique servicing type shops" may be a way for smaller servicers to survive in the current marketplace. They need to deal with "certain specialized types of loans, which is what some companies are successfully doing," he said, praising "some really good players out there" who have managed to combine size, expertise and technology to their benefit.

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