Mortgage Servicing - Overview
Is Highly Complex & Highly Regulated
Is Highly Dependent on Workflow & Scale
Requires Extensive Procedures & Training
Is a Contractual Obligation with an Investor: Mortgage Servicing Right (MSR)
May generate a Return on Investment of 200%. (Measured as MSR IRR)
"Residential Mortgage Loan Servicing is one of the most profitable areas of mortgage activity and presents a series of repetitive tasks that are highly dependent upon a complex workflow design where each function relies upon each members’ ability to precisely complete each task to achieve profitability and to avoid financial, regulatory, and reputational risk present within each activity." by Dr. Schell
Servicing Functions with a Subservicer:
MSR Analysis: Retain vs Release Decision
Servicing Functions without a Subservicer:
Customer Service & Boarding / Transfers
Payment Processing & Escrow Analysis
Cash Management &Accounting
Investor Reporting & Payoff
QC / TQM & TPM - Vendor Oversight
Collections & Loss Mitigation, Short Sale
Foreclosure, DIL & Property Management
Servicing Process Overview
Collect payments from borrowers (ACH, Check)
Each payment has P&I and maybe T&I
Servicer receives and segregates Investor Funds as required
Remit Interest and Principal less Service Fee to Investor
Advance Funds to Investor if required
Agency retains guarantee fee then remits P&I to MBS security holders
Servicer holds Borrower's Escrow Funds per RESPA (1/6th rule)
Pay Borrower’s Tax and Insurance obligations when due
Analyze Escrow activity to assess Escrow reserve amount
Notify the customer of the new payment amount
Servicer implements Collection, Loss Mit, and Foreclosure
Collection activity may start on day 2
Modification efforts are required
Foreclose is state-specific
Property Preservation is Investor specific
Servicer implements Quality Control and Quality Assurance
QC is performed Quarterly applied to all Agency and HUD portfolio loans
QA is implemented perpetually from QC to correct, identify root cause, and remediate
Dr. Andy Schell & Theresa Marie teach Servicing as an MBA Webinar.
Prior recordings may be purchased at MBA.org.
MBS Financial Services supports the following areas:
Growth Strategy – We can help you plan and execute a growth strategy.
Hedging & Pipeline Risk Management - Dr. Schell can help explain how hedging functions, the benefits of hedging, and the risks associated with the activity. See blog posts.
Technology must align with a firm's strategic objective. Every mortgage lender's technology infrastructure significantly impacts its customer experience and employee workflow. MBS will help select, configure and deploy the best technology solution.
CEO Development - Leadership is a learned skill. Dr. Schell can teach you to be an amazing leader, an effective manager, and an inspiring coach that can foster a vibrant culture.
Accounting Services – Dr. Schell, CPA, leads the accounting services team to become your outsourced accounting department. This alternative makes more and more sense for companies wishing to focus on their core business and also want trustworthy accounting and financial reporting support.
About Dr. Schell:
Dr. Andy Schell, DBA (Ph.D.), MSML, MBA, CPA/CFF, CMB
Dr. Schell is CEO, Managing Partner, and Co-Founder of Mortgage Banking Solutions and the Founder of MBS Financial Services ("MBS"), based in Austin, Texas. Dr. Schell is known for his ability to turn "vision into reality" and "chaos into order" as he finds creative solutions to the challenges his clients face addressing Revenue Stability, Technology Enhancement, Financial Management, and Workflow Efficiency.
He has 4 decades of experience as a strategist directing the activity of both small and large groups of employees including mortgage lending activity at Bank of America. His leadership knowledge extends from his hands-on experience and his academic training in his MBA, his master's degree in leadership, and his doctoral work to examine employee dynamics given leader stimulus.
To find out more information on MBS Services, please click HERE
Find more information at
DoctorSchell@MBS-Team.com ; (512) 501-2812;
Doctor Schell the Profit Doctor