New York-based The Money Source recently launched a new subservicing solution, helping bring updated technology to an infamously antiquated industry.
The new subservicing solution, Servicing Intelligence Made Easy, or SIME, offers a transparent subservicing platform in real-time.
Features of the platform include:
- Ability to drill-down into loan details
- Real-time dashboards
- Visibility of all notes/communications between client and servicing staff
- Payment trends to mitigate delinquencies before they happen
Ali Vafai, president of The Money Source, explained in an interview with HousingWire that one of the reasons behind the move is because the company is retaining its own mortgage servicing rights and struggles to find a subservcier with the type of technology necessary to serve its customers.
“Our biggest asset that we have is retaining our loans. As a mortgage company, it’s like your baby,” he said.
After the company realized there’s a void in the market, Vafai said that the company decided to build its own solution.
The announcement comes amid a recent commitment from the government-sponsored enterprises to focus on serving technology.
Dave Lowman, Freddie Mac executive vice president for single-family business, said at a recent conference that the need for new technology is magnified in the servicing market.
Lowman pointed at Freddie Mac as an example, saying that the enterprise hasn’t focused as much on technology for fixing a loan as it has for originating one.
Fannie Mae echoed this same sentiment about technology in servicing, with CEO Timothy Mayopoulos recently saying, “We are devoting attention to servicing. We are in the exploration process now.”
As for why there’s a significant lag between technology innovation in the origination market versus the servicing market, Vafai explained that there are thousands of lenders out there, so IT companies are thinking about how they can sell to that much broader audience.
But on the servicing side, "there are way less of us," Vafai said.
And on top of that, he said, “The second part is that the origination space makes more income. The margins are slim on ROI on the servicing side.”
Due to factors like these, the servicing industry is behind in technology innovation, but this is starting to change. As Lowman said at the recent conference, the time to develop new technology in servicing is now, when the default rates are low.