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The system of record. It's long been the core technology of any servicing operation in mortgage finance. Before lenders were implementing loan origination and automated underwriting systems-not to mention before anyone ever dreamed of a completely paperless mortgage-servicers were using systems of record like a centralized hub to store mortgage data, track payments and send out that information for tax payment, other escrow account management tasks and of increasing necessity, to assist in default servicing.
These systems have evolved over the decades and new players have entered the space with various offerings to complement and compete with the established providers. But like servicing itself, the systems of record weren't ready for the onslaught of foreclosures servicers are still dealing with today.
That's changed as the industry nears five years since the housing market's 2006 peak, with new technology coming to the aid of servicers. Many predict that even more development and improvement is not only coming, but will be vital to leading the sector out of the crisis and creating a lasting impact on how servicers utilize technology to manage operations.
There are four primary players in the system of record technology space, explained Jeff Lebowitz, president of MORTECH, the Bend, Ore., mortgage technology research and consulting firm. Two firms that have traditionally focused on small to midsize servicing shops, like community banks, credit unions and regional servicers, are Financial Industry Computer Systems and its Mortgage Servicer platform and Harland Financial Solutions, which offers the Interlinq platform.
Both companies also offer loan origination technology, which gives lenders the choice to have their entire end-to-end technology provided and maintained by one vendor.
The sector of small mortgage lenders that a vendor like FICS targets with its technology is increasingly originating more mortgages for sale to the government-sponsored enterprises. In response, FICS said its added new functionality to both its LOS and servicing system of record to provide connectivity and meet new requirements.
Even when these small to midsize lenders sell their mortgages to Fannie Mae and Freddie Mac, many choose to still hold onto the servicing rights. The lenders that implement a combined LOS and servicing platforms have built-in connectivity right out of the box.
It's a feature FICS says helps it stand out among...