What traits do top mortgage servicers share?

The best firms increase their portfolios aggressively - three times faster than average servicers - and rely heavily on Fannie Mae and Freddie Mac loans that undergo stringent underwriting.

That's the word from a "best practices" survey of the mortgage industry by Arthur Andersen, Chicago. The financial consulting firm, a unit of Andersen Worldwide, contacted the 100 largest mortgage servicers. Twenty- seven responded to the servicing portion of the survey.

Superior performers - those wringing the most profit from their operations - mine their portfolios to turn up cross-selling opportunities, the survey said.

The lead bank benefits by providing more services to customers, while the mortgage unit gains from commissions for passing along leads, said Clyde Kofman, one of the survey's authors.

"All the financial information mortgage lenders collect provides a lot of opportunity for additional marketing down the line," Mr. Kofman said.

Car loans, credit cards, and deposit products are among the offerings with which retail banks can follow up, he said.

One thing top mortgage servicers don't do is take a cookie-cutter approach. The best firms use automated systems to handle routine tasks but assign employees to work out complex issues, the survey said. The best- performing firms also work frequently with outside vendors to develop original systems, Andersen found.

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Changes in the mortgage industry are unnerving brokers and the wholesalers with whom they do business, a survey has found.

About 42% of brokers and wholesalers surveyed by Holm Publications, Milwaukee, said it has become tougher to work with lenders.

Mergers that disrupt business relationships are one reason for the difficulties, said Jon Holm, publisher of Holm Mortgage Finance Report. Also, he noted, the survey of 100 brokers and wholesalers was done late last year, after several high-profile cases called into question the integrity of loans that some brokers book.

Concerns about regulations are also on the minds of brokers and wholesalers. About 36% said too many rules and too much paperwork gum up the lending pipeline.

Mr. Holm said the survey did not ask for respondents' names, so that they could speak freely. "You wouldn't expect someone to stand up at an industry meeting and say, 'Let's tighten up on regulations,'" he said. "But in this forum they feel comfortable."

Compensation was also a key issue for 39% of respondents. More than half the respondents, 54%, said their financial agreements had not changed during the past year, while 29% said payments had been raised and 17% said they were lower.

Mortgage companies typically pay brokers about 100 basis points - or 1% - of the loan amount in the form of a servicing released fee.

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