The LO Down - Mortgage Servicing

We all have been following the recent changes in the mortgage industry.  At first, interest rates were at record low levels and most lenders had plenty of both purchase and refinance business to keep their employees busy.  But then, rates started to rise. And over the period of several months, they just kept going up.  This caused the industry to take a pause on hiring, which then unfortunately for some, turned into mass layoffs.

What we are starting to see through all of this, is a shift in how the full cycle of a mortgage loan is viewed.  For what seemed like forever, there was the Sales Side with Loan Originators, Processors, Underwriters, and Closers.  And on the other side, there were the Servicers - the people actually handling the customer service and accounting side of mortgages by collecting monthly payments, monitoring and updating escrow accounts, and even helping borrowers that are struggling to make ends meet find suitable refinance options. 

But instead of having these 2 different sides to mortgages, more and more lenders are seeing a new opportunity. 

By offering a full cycle of service with mortgage loans, lenders can bring in borrowers with their purchase loans, and then keep that relationship going by servicing the loan. Borrowers are happy because they get to stay with the lender they trust, and lenders are happy because it increases revenue and offers a direct line to refinances. 

This is even starting to open up new options for some employees that may have been on the edge of that layoff cliff.  With an increase in companies offering Servicing, they are finding that Loan Originators, Processors, and Underwriters have a unique view of how a mortgage loan works, and are better equipped to help struggling borrowers navigate financial hardships.  For instance, the average loan servicing clerk may have a basic understanding of how to say an ARM loan works.  But an Originator knows it from the inside-out and can explain it in a way that helps the borrower better understand the short and long-term details of an ARM loan, and in turn, make an educated decision on the future of their home.  

Though this is a relatively new trend we are just beginning to see in the industry, we at the Knowledge Coop are excited to see where it leads.  That’s all for us.  Thanks for reading and for more content like this, check out trythecoop.com!

That’s all for us.  For additional information, check out the links provided.  And find more content like this on trythecoop.com.  

https://www.nationalmortgagenews.com/news/how-servicers-are-putting-available-originators-to-work