DS News - U.S. Bank

18 A DIFFERENT APPROACH CALLS FOR BETTER TOOLS e mortgage secondary market has been increasing the impact on servicing in recent years. Both private and GSE investors require not only more data, but also more frequent data. Private investors need detailed information on payments and changes in loan status as quickly as they occur. Having access to the most recent data allows them to make decisions at the loan level as well as at the portfolio level, assessing risk as it occurs, not 30–45 days later. Fannie Mae and Freddie Mac (collectively, the GSEs) have pivoted to more frequent reporting, daily and intra-day. e amount of data required by the GSEs to manage risk has increased as well. Servicers must provide accurate reporting with increased scope and frequency. LoanServ embraced a radically different view from the onset. Addressing the needs of investors from a blank page, LoanServ was able to apply a sophisticated development approach that was far more adaptable to any type of investor requirements for greater data and faster reporting. Built as a fully real- time processing system, LoanServ is able to evaluate investor requirements as transactions occur. is advanced technical feature allows LoanServ to create reporting and reconciliation in real time and is the basis for any frequency of reporting from "as-it-occurs" to periodically during the day or daily. With other systems, investor reporting is built on a model of "review and report" on activities that happened all in the past. Most reporting is done looking back over the prior month and re-creating compliant output. As the need for faster reporting and more data grew, many loan-servicing systems became more complex in managing investor reporting. is complexity adds challenges for you as a servicer to manage the system and impedes how quickly you can adapt to new investor requirements. Reporting to investors in real time, or frequently throughout the day, satisfies the need for better data faster. THE POWER OF SIMPLICITY Real time is only one critical component to successfully addressing today's investor needs. LoanServ also added the business rules engine necessary to perform complex evaluations, calculations, and data analysis to investors. A classic definition of a business rules engine is a software component that helps you manage a decision process using pre-defined logic to determine outcomes. e best rules engines do not require programmers to make changes at all, but instead lead users through business-oriented questions to ensure that rules are set up to conform with desired states and outcomes. With LoanServ's simple approach, business users just enter the servicing agreement information using the questions presented in logical sequence, and answers are transformed into business rules. Programmers are not needed to make changes, and users are in complete control. ey will only need to be familiar with the servicing agreement and a few additional details to change investor rules to adapt to any investor. LoanServ provides a fast-path method to set up standard investors like Fannie Mae and Freddie Mac, limiting questions to only those that would be unique to your agreement. While rules engine technology is not new, the application of a rules engine to investor reporting is unique to LoanServ and continues to deliver tremendous benefits today to servicers. is simple but powerful approach provides the ability to add a new investor, transfer loans to that investor, process payments for those loans, and report outcomes to that investor, all in the same business day. is frees up staff time and eliminates any blocks based on the time of day or the day of the month. LoanServ provides a fast-path method to set up Fannie Mae, Freddie Mac, and other standard investors, and imposes no impediments or delays based on the clock or the calendar. SHRINKING A BIG CHALLENGE DOWN TO SIZE Managing recent changes required by Freddie Mac's ICRI initiative was a validation of how easy it is to make changes to LoanServ by servicers. Instead of a massive reprogramming effort, a few fields were added to LoanServ to ensure the rules engine had the data it needed. Clients then were able to make changes to rules configurations to support the new Freddie Mac reporting cycle and data requirements. Instead of a massive effort, it was a "non-event" in the words of one client. Servicers using LoanServ reported the "change for Freddie Mac was a non-event." We feel this is how it should be. Find out more by visiting sagentlending.com. Sponsored Content

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