ServiceMac’s Bob Caruso: How Technology is Rapidly Transforming Mortgage Servicing

Bob Caruso is CEO of ServiceMac LLC, Fort Mill, S.C., a wholly owned subsidiary of First American Financial Corp. To learn more about the company, visit

The servicing industry continues to evolve and adapt as market conditions change. Given the market shifts, servicers can focus on technology advancements to maximize operational efficiency, manage risk and remain compliant, while providing superior customer service. In fact, the latest advancements in servicing technology are changing the way mortgages are serviced.

Bob Caruso

From sophisticated automated rules to deep portfolio data analysis and continual refinement of rule sets, there are a variety of new tools and strategies that can improve mortgage servicing. Specifically, recent technology advancements can help servicers adhere to regulatory and investor requirements, and provide the best possible experience for borrowers.

Improving servicing with sophisticated rules

Sophisticated rule engines have played a key role in transforming mortgage servicing over the last decade. Rule engines automate complex compliance and loan program requirements, while also providing proactive notifications when portfolio or loan anomalies occur. When inconsistencies or defects are identified, they can be assigned to specialized teams to analyze and determine next steps. As market conditions and borrower behaviors change, automation provides a feedback loop that supports proactive ruleset updates so portfolio risk can be maintained.

Rule engines also help servicers deliver improved customer service to borrowers. With automated workflows and rules, servicers can proactively identify potential issues earlier and take preemptive action to reduce compliance risk in the short term and continually heighten regulatory compliance over time. When utilized correctly, automated tools minimize risk, improve efficiency and strengthen compliance.

At ServiceMac, we started by building a proprietary rules engine that leverages a database of over 19,000 data points on every loan. This allows us to modify and create new rules as auditor or investor requirements and market conditions change. The constant feedback loop enables us to identify trends and potential issues faster, and dynamically pivot strategies.

Continual refinement of rule sets

Servicers must continually refine their processes and rulesets to meet the shifting market and changing lender and regulatory agency guidelines. With a wide range of portfolio types to manage, servicers must have flexible and adaptable systems to validate loan-level compliance while providing exceptional customer service.

ServiceMac utilizes its proprietary Sentry360â„¢ rules platform which provides an intuitive interface where we can create, modify, and test new rules as new potential portfolio risk is identified. This allows us to manage a myriad of different loan products and ensure the proper procedural controls are in place.

Leveraging tools to perform portfolio analysis

Utilizing automated analytic tools has significantly improved mortgage servicer efficiency by providing real-time insights into borrower behavior, payment patterns and other vital indicators. Sophisticated reporting tools have dramatically increased the breadth and depth of data that can be analyzed, which helps identify trends and patterns sooner, allowing servicers to improve their decision-making and quickly determine any necessary changes.

Having access to a large set of data points is critical to effective analysis of portfolio and loan data. At ServiceMac, we have a highly experienced team whose sole focus is to analyze portfolio data and identify trends quickly. This enhances compliance and addresses anomalies before they impact the overall risk of the portfolio.

Recently, our team identified some portfolios that were performing differently than previous loan vintages. The team determined that the origination date of the loan and the loan program played a significant role in performance. Based on this information, we created a process to identify these loans, so we could proactively monitor and report on them. This data was used to identify loans that were potentially higher risk. If changes occurred on the loan, the customer support team would be notified and proactively reach out to the borrower and identify the options available to them, thereby resolving issues quickly. The results were also shared with our clients for transparency and deeper analysis if needed.

This example illustrates how leveraging data, automated rules and highly trained staff allows us to partner with borrowers and provide personalized service that also helps minimize lender risk.

Advancements in servicing technology have revolutionized the mortgage servicing industry, enabling servicers to manage portfolios more efficiently, accurately and cost-effectively than ever before. Sophisticated rules engines, advanced analytics tools and continual refinement processes have all been critical in this transformation.

Whether you are servicing first, second or home equity lines of credit, advancements in servicing technology have made it possible to provide better service, while minimizing risk. At ServiceMac, we are committed to helping our clients achieve these goals and stay ahead of the curve in the ever-evolving mortgage servicing industry.

(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to NewsLink Editor Michael Tucker at or Editorial Manager Anneliese Mahoney at