New Products Stretch Systems
The days of servicing different loan types on different platforms may be going away, and companies like Fiserv are helping to make that possible.
Ever cost conscious, some big lenders have started to mix loan types on one servicing platform rather than creating multiple platforms for different products.
That means first and second liens, home-equity lines of credit and even unsecured consumer loans in some cases are being serviced by the same team of employees, the same call centers and the same facilities, giving lenders greater flexibility to allocate resources where most needed while cutting down on overhead and operational costs.
Tom Gorman, chief operating officer at Fiserv Lending Solutions, said that with home prices climbing out of reach for many potential buyers, demand for new, affordable housing loan products is rising rapidly. The lending industry's creativity in helping to stretch a homebuyers earning power has created a host of new loan products that will challenge servicers in the years ahead. That has created challenges for servicing automation vendors as well.
"One of the things we wanted to invest in from a software perspective is the ability to respond to some of these creative financing needs," Mr. Gorman told MSN. "We've already been successful in offering to our clients a single platform that does first mortgages second mortgages and home-equity lines of credit."
As the new loan products proliferate - an estimated one-quarter of home loan originations early this year were interest-only loan products - servicers need to adapt to support these new loan types. In the area of investor reporting, for instance, standard Fannie Mae and Freddie Mac protocols may not be sufficient as the percentage of loans pooled into private mortgage securities proliferate.
And that is a driving force behind Fiserv from a software design perspective, Mr. Gorman said.
Fortunately, service-oriented architecture - a new development in programming - allows Fiserv and other technology vendors to take advantage of the Internet to add functionality that helps to make this possible.
On the investor reporting side of the business, for instance, Fiserv is adding new interfaces that allow a question-and-answer format guide users through the right rules process for a given loan, similar to how popular tax preparation software guides taxpayers through IRS rules.
Service-oriented architecture allows a graphically enhanced, visually appealing interface without burdening the user with making all the rules decisions themselves.
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