MBA NewsLink Q&A: LoanCare President Dave Worrall

Dave Worrall is the President of LoanCare, Virginia Beach, Va. Prior to joining LoanCare, Dave was President of RoundPoint Mortgage Servicing Corporation. He also held senior leadership roles in loan servicing at Citigroup, Fannie Mae and GMAC-RFC. While at Fannie Mae, Dave worked directly with the Department of the Treasury on the Making Home Affordable programs. Dave earned his MBA from Texas A&M University as a Ford Distinguished Scholar. He also holds a bachelor’s degree in English from Florida State University.

MBA NewsLink: What are the challenges that lenders currently face with in-house mortgage servicing, and how are they dealing with these challenges?

Dave Worrall: In-house servicers face expenses they cannot sustain. The roaring economy continues to drive up labor costs and servicing is a labor-intense business. New government loss mitigation programs and increased oversight require huge investments in process enhancements and compliance departments. And we haven’t even talked about improving the borrower experience.

In-house servicers try to keep up as these expenses swell. However, without a lending operation that can help pay for everything, many lenders are turning to subservicing to contain future expenses, remain compliant and improve the borrower experience.

MBA NewsLink: How can mortgage subservicing help lenders reduce their loan servicing time and protect against risk?

Dave Worrall: Lenders gain a giant advantage when they use a subservicer to eliminate one of their biggest risks: the increasing cost of servicing. Lenders lock in a cost to service when they sign with a subservicer, allowing them to wrangle the volatility in other parts of their business. In addition, most subservicers work for an array of clients, operating compliance and risk programs designed to satisfy a broad spectrum of regulators.

Using a subservicer ensures a lender keeps up with changes in regulation which drastically lowers compliance risk.

MBA NewsLink: Does subservicing provide lenders with insights into borrower payments, escrow management and other analytics they can use to manage the health of their investments?

Dave Worrall: Subservicers are data providers. Everything that happens with a loan must be converted into data that informs the lender’s view of loan performance. That said, leading subservicers are taking it a step further and doing the analytical work for their clients.

MBA NewsLink: What are some of the best subservicing technologies currently available to lenders, and why are lenders using these technologies?

Dave Worrall: Borrowers expect to self-serve through web and mobile. The best servicers offer the most advanced technology to support this self-service. LoanCare implemented a proprietary web and mobile platform that allows us to routinely enhance our technology as borrower and lender needs evolve. For example, in the current rate environment, more borrowers are considering home equity loans. LoanCare’s investment in proprietary web and mobile platforms means we can support these home equity loans and help our lenders communicate that they are available to borrowers.

MBA NewsLink: What tips or recommendations would you offer to a lender that wants to get started with subservicing or is looking to get the most value out of its current subservicing investments?

Dave Worrall: Before spending time poring over PowerPoints, pricing, or perks, lenders should first evaluate a subservicer’s plan to improve. Good subservicers know they have opportunities to improve. Great subservicers know and have a track record of allocating time and money to these improvements. Long term, you get the most out of your subservicer by giving them objective feedback on their services. If something is missing in digital, tell your subservicer.

(Views expressed in this article do not necessarily reflect policies 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 Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)