BANGOR, Maine - Mortgage servicing technology is "saving relationships" for $162-million University Credit Union here, which consistently is ranked among the country's top 10 credit union lenders, despite its smaller size.
The servicing tools give University CU the power to complete a range of functions, including escrow administration, collections, investor accounting, payment processing, loss mitigation and year-end reporting, in Web-based and electronic formats, according to Kristen Perry, VP-finance and technology.
One Primary Institution
"Having the full functionality is key to our members," Perry explained. "That way, the member has one primary institution to do business with instead of being forced to go to a bank or mortgage company for servicing."
University CU runs Mortgage Servicer and eStatus, residential mortgage servicing solutions provided by Financial Industry Computer Systems Inc. (FICS) of Dallas.
Up until 2004, University CU used its data processing platform to service mortgages, Perry said. But core systems just don't do a good job of servicing mortgages, particularly when it comes to escrow administration and reporting, she said.
Mortgage Servicer automatically maintains escrow balances, reports the balances to members and pays taxes and insurance from escrow, she said. "We can calculate escrow projections, too. For example, we can understand what is required for a payment to support the needed escrow on an annual basis, and recalculate the payments and adjust the escrow accordingly, if necessary.
"Our core system really isn't capable of handling an efficient escrow process," Perry continued. "The efficiency gained through Mortgage Servicer has helped our bottom line in terms of the time it saves employees. And obviously, we create a more secure member relationship because the credit union is in control of making sure the member is paying their taxes and insurance."
University CU's core system can't access the breadth of data that the credit union's servicing department needs to properly maintain a mortgage and retain members, she said. So Perry leans on Mortgage Servicer's custom bundled reporting tools to keep as many members on board as possible.
"Every month, we create a Payoff Report from the servicing database," she said. "I analyze the report based on loans that have made their final payment and the age of those loans; which loans are paying off very early; which have hung around for a while; where the loans are going; and whether members are refinancing and why."
The data helps Perry "do what I can to save a member relationship," she said. Additional reports address delinquencies and credit, she added.
Members Check Online
Members can check loan balances and statements or make payments online by logging-in to FICS' eStatus. About 35% of University CU mortgage loan holders use eStatus, said Perry.
"Otherwise, those members would have no choice but to receive paper statements and pay their mortgage via the mail or walk into a branch to make payments," she said.
Though Mortgage Servicer is not seamlessly interfaced with the credit union's core system, tellers can click from the core to pull loan rates, interest and due dates, said Perry. "It's limited, but it's everything we need."
FICS provides the user-defined interface to the core, according to FICS' President Susan Graham. The interface also allows members to make payments with a teller, she said. At University CU, payments are posted to the core system, placed in a batch file and then downloaded into Mortgage Servicer at the end of each day.
University CU's servicing portfolio is valued at $87-million. University CU also owns 50% of the Portland, Maine-based Primary Mortgage Corporation, a sub-servicing CUSO with $161-million in residential mortgage loans, which includes University CU's portfolio.
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For info on this story:
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