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Late last fall, in a National Mortgage News webinar, and earlier this year in a LoanLogics podcast series, we began loudly voicing the need to remove the friction present in the transfer of mortgage servicing rights between buyer and seller counterparties (as well as in the wholesale and correspondent channels).
Buyer pain points in this acquisition space can be summarized into 3 intertwined categories.
Lack of uniformity & consistency – It is no secret most sellers lack wherewithal to address all the unique requirements of each buyer they do business with. As such, buyers with presumably more resources are left to deal with wide variations of file delivery received across sellers.
Manual processing inefficiencies – Too frequently, this is managed with people-power hand-keying data in to servicing & other systems of record, often with errors. Buyers are repeatedly left to map document and field naming with each new seller as they acquire portfolios.
Financial & reputational risk for counterparties – This then ups the risk ante. Human labor increases costs and cuts into margins. It creates delays in meeting contractually committed timelines and frustrates borrowers when their servicing experience is interrupted or void of their complete account information. Sellers too become frustrated dealing with buyers who manage the transaction with slow manual processes that delay funding.
With signs that the MSR market has renewed 2021 energy, after it came to a screeching halt just a year ago, buyers are looking to better position themselves for whatever comes next. While rates, forbearance fallout, and the post-pandemic world are largely uncontrollable factors, LoanLogics has specific experience and technology to help address the controllable factors identified above.
Last week, LoanLogics announced LoanLogics IDEA™ for MSR Transfer. This new data and doc processing solution normalizes loan file delivery from sellers, enabling buyers to streamline loan boarding by leveraging a standardized output file for delivery into their servicing & document management systems.
At work is highly accurate, machine learning-based automated document recognition (ADR) technology and automated data extraction (ADE), which can classify documents and extract data from more than 700 data fields on more than 30 most common critical loan documents for MSR acquisition. Automated tests also perform required document checks, document execution validation, document to data tape and document to document comparisons, an evaluation of document completeness, and more.
The result is a consistent, faster and more cost-effective process for both counterparties, as well as greater confidence in data accuracy.
Andrew T. Weber, Founder & President of Marlin Mortgage Capital, a clearing platform for buying and selling residential Mortgage Servicing Rights (“MSR”), voiced his opinion on the prior lack of standard processes in any aspect of MSR transactions during the aforementioned webinar and podcast events.
But that has since changed. To resolve that, the company is now a user LoanLogics IDEA for MSR Transfer.
“Our decision to leverage technology from LoanLogics was driven by a desire for efficient data and documents standardization, which simply was not available from other document processing vendors in the industry.”
To learn more about LoanLogics IDEA for MSR Transfer download our product brochure or request a 1;1 product introduction here.
