In the last two years the housing market has shifted dramatically. The refi boom has been replaced by a purchase market. A fixed-rate mortgage that was once at bargain-basement low interest rates is above 5%. On top of that, the regulatory environment remains ever changing. It certainly is a challenging time for many financial institutions that are now focusing on a purchase money market and putting new efforts toward ramping up their Adjustable Rate Mortgage (ARM) products, buydowns, home equity loans and Home Equity Lines of Credit (HELOC) loans. Now is the time to consider partnering with a mortgage subservicer like Cenlar. Cenlar is the nation’s leading longstanding mortgage subservicer that has been around for decades. Our team is experienced in every aspect of mortgage servicing which enables us to deliver a custom, flexible, quality mortgage loan servicing solution to our clients. Here’s why you should consider outsourcing your servicing to Cenlar:
- Regulatory Knowhow
The scrutiny of this regulatory environment has resulted in more work for financial institutions that are either originating loans, servicing loans, or doing both. These companies need to think about how to offer new products in order to retain their place in the market.
The quality of a servicer’s regulatory change management process and compliance is important as financial institutions begin to promote products like HELOCs, for example, to customers as interest rates continue to rise. So while a company is focusing on how to market a HELOC to its customer base, using a suberservicer like Cenlar that has the expertise to manage the regulatory and compliance requirements is undeniably the most critical factor to consider when selecting a subservicer.
At Cenlar, each time new laws, regulations or programs are put in place, we must first determine their impact, then design how to implement them. This includes creating procedures, testing, QC and controls, while at the same time communicating those changes to our business partners, homeowners, and our impacted operational areas. This process allow us to be prepared and we are able to take action.
Our formal process entails working with our legal regulatory lawyers to understand the requirements and provide interpretation of the change to our compliance team. Our compliance team then works with operations and business control managers to understand the impact to business processes and procedures, training, communications, vendors and systems. By partnering with Cenlar, you’ll get the benefits of a robust regulatory change management process.
- Providing the Best Homeowner Experience
While many people associate mortgage servicing as just the administrative function of a mortgage, it’s so much more than that for the homeowner. The homeowner has an expectation that the servicer will deliver an experience to meet their individual needs. For servicers, that means engaging with customers over time to establish relationships and learn their preference for communicating.
At Cenlar, we truly care for our homeowners as if they were our own. That’s why we are always striving to provide the best homeowner experience. We believe the homeowner experience is not a single moment in time – it lasts over the lifetime of the loan. Whether that’s the regular cycle of onboarding, escrow, monthly payments and year-end or challenges facing homeowners, like the pandemic and natural disasters, we are responsive, anticipatory and always caring.
Using data and analytics to determine how our homeowners are engaging us helps us implement tools and efficiencies to obtain that best communication experience for each homeowner. And, we continue to use that data to move the needle so that we are always engaging with our homeowners when they want and when we need them to.
- Ongoing Mortgage Assistance for Homeowners
During the pandemic, nearly 7.2 million American households took advantage of forbearance options. From the very beginning, Cenlar has been quick to adapt and ramp up our efforts. We stay committed to working with each homeowner to help them navigate through their options. Our goal is the same as the goal of our clients and the regulators – we want to help every homeowner we can, so that families can stay in their homes and avoid foreclosure. That is the best outcome for us, for homeowners, for clients, for real estate values, for communities and for our society as a whole.
While many homeowners were able to resume their mortgage payments after the forbearance programs expired, some are still in need of financial assistance.
In response, the federal government has set aside almost $10 billion in a Homeowner Assistance Fund (HAF) for states, territories and other recognized U.S. entities to assist with everything from mortgage payments to utility bills.
Cenlar has implemented numerous state HAF programs and has assisted in providing relief for homeowners who are still in need. Administering this program is far more than just flipping a switch. Cenlar is actively working with all jurisdictions, as well as streamlining what has been a manual review process, to quickly aid eligible homeowners.
- Maintaining the Value of Your MSR and Protecting Your Investments
During the last two years, both lenders and servicers retained the servicing they originated, increasing their portfolios thus increasing their MSR value. These MSR values are now providing an income stream that helps to offset costs to maintain the technology and administrative infrastructure created to manage the refinance boom that occurred during the last two years. Now, those MSR’s need to be cared for. MSR values are set based on the expected future cash flows from the underlying mortgage asset. Any risks to that cash flow – whether it’s the homeowner paying off the mortgage ahead of time or not paying at all, decreases the value. Also, many lenders now are selling MSR’s and the movement of portfolios can be a resource strain and is costly to ensure proper regulatory requirements.
By partnering with Cenlar, we take on the heavy lifting of helping you protect your investment – by managing defaults and providing you with the flexibility to grow or decrease your portfolio size without impacting your day-to-day staffing needs.
- Costs and Staffing
Finding the expertise that you need is hard today too. With the new hybrid environment deployed by so many entities, people are moving easily from one job to another. Managing a staff that understands the market, your portfolio and being one step ahead from a technology perspective is daunting and costly for any financial institution.
We have the infrastructure built, the talent and the regulatory expertise to service loans. Whether you are a small community bank or credit union, or a large lender, Cenlar provides scalable services to meet your requirements, service the way you want to and can help you cut down costs.
At Cenlar, we are always your trusted partner and will help you manage your servicing no matter the market condition.