Today’s consumers are empowered by their smart devices. With the swift click of an app, they can schedule their telehealth appointments, work meetings, have their prescriptions and groceries delivered, their bills paid, or purchase any retail product their heart desires.
However, when it comes to paying their mortgage, the process is far less convenient for borrowers. Why is that, and does it have to be that way? In truth, it doesn’t.
Interim Servicing is loan servicing performed by an originator until a loan is sold and transferred to a new investor and/or servicer. Before loans are sold and transferred, originators are responsible for collecting mortgage payments from borrowers. Interim Servicing generally lasts between 1-3 months depending on the loan type, market conditions, and the originator’s sales strategy.
EarnUp Interim is important because now originators can service borrowers, automate processes, reduce costs, and elevate the borrower experience. Keep reading to learn how.
With EarnUp Interim, you can digitize payment collection and automate borrower communication for an experience your borrowers have come to expect. Moreover, the payments to the servicer can also be more streamlined after the loan transfer because the borrower is already set up to make payments digitally.
There is a short window of time where many lenders miss out on an opportunity to build their relationship with their borrowers. And it all starts with protecting that borrower’s journey post close.
The reality is, without EarnUp Interim, borrowers are left on their own to figure out the details with their mortgage payment. When a borrower closes a loan, they have already succeeded in completing a very complex process. The last thing they want to deal with is having to investigate who to call or where to send their mortgage payment. It sounds simple, but most borrowers find the mortgage payment experience confusing.
Interim Servicing lasts for a short duration and lenders try to collect payments on time. However, most loan payments come in the form of paper checks. Processing paper checks increases overhead costs. And because paper checks need to either be mailed or hand delivered, they require more time and follow-up effort. Not to mention, paper checks often lead to early payment defaults (EPD) and delays in payments.
Once loans are transferred, the borrower must be informed at least two weeks prior to transferring to their new servicer. This gives the new servicer time to make payment arrangements for their new payee. This is called the “Goodbye Letter” or “Notice of Service Transfer Letter.” This is yet another costly manual process for originators to track, along with every sold loan and related borrower communication. It is possible that in some cases, the dates overlap between the servicer transfer and payment due date. In those cases, the mortgage payment is still due to the originator, even after the Goodbye Letter is received by the borrower. This can make the payment process even more confusing for the borrower.
There are many challenges that lenders face when it comes to independent interim loan servicing. It often costs over $120 per loan. Lenders are often responsible for manually managing regulatory risks. Post-MSR transfer processes are complex, expensive, error-prone, and may lead to partner conflict and increased costs. Among the larger issues originators deal with includes a poor borrower experience. Here’s a quick look at how with EarnUp Interim solves these challenges:
Even though interim means temporary, EarnUp Interim helps you deliver lasting value to your borrowers through a seamless digital payment experience.