The Financial Impact of Servicing
(l-r.: Christine Chandler, Christian Baggett, David Harrison, Beau Jones, Beth Goff-Plourd)
HOLLYWOOD, FLA.–Servicers face increasing market and regulatory challenges, but there are ways to optimize outcomes in today’s evolving landscape, panelists said here at the MBA Commercial/Multifamily Finance Servicing and Technology Conference.
Beau Jones, Executive Managing Director, Global Business Development with Trimont, Atlanta, noted he is seeing more clients leveraging their servicing partners more heavily. “And while that’s great, it can also be somewhat difficult, because sometimes, they’re not necessarily paying attention to the scope of responsibilities of a servicing agreement, yet they’re going through some issues themselves,” he said. “Maybe they’ve got a hiring freeze, and their portfolio is having some issues. They need to leverage their own talent internally at an elevated surveillance and asset-management level. And they need more of us [servicers] to do more of the process kinds of things, which is doing well, but I’d also say that now they’re starting to leverage us more on the actual credit decisions.”
Beth Goff-Plourd, Assistant Vice President and Senior Director with Lincoln Financial Group, Greensboro, N.C., noted that as a lender, she is spending much more time with the firm’s correspondents than she used to. “We’re asking them for more these days based on the state of the current market,” she said. “That’s the only way you can do proper due diligence these days; there’s just too many possibilities.”
Panel moderator Christine Chandler, 2025 MBA Chair-Elect and Executive Vice President, Chief Credit Officer & Chief Operating Officer for M&T Realty Capital Corp., Baltimore, asked about the key regulatory challenges panelists face and how they impact their decisions.
“I think it goes back to one of the points that Beau is making, that there’s a continual compression of work that goes down, it doesn’t go up,” said David Harrison, Chief Operating Officer with Midland Loan Services, Overland Park, Kan. “It doesn’t go back out to homeowners. It doesn’t flow back up to the issuers. It flows to the capital level, under which is the servicer. And servicers do a phenomenal job. We’re making credit decisions. We’re insurance experts, we’re tax experts. We know everything about the entire process. The servicing standard makes you the expert. You’re held to that from your customers and from the regulatory side. And the more of these expectations that get pushed down, the broader the responsibilities are on the servicers, on the asset managers, and on the special servicers.”
Christian Baggett, Director of Business Development with Essex Financial Services LLC, noted Essex is a smaller company. “So, we try to distinguish ourselves by being able to do a lot of things with a lot of smaller clients,” he said. “For instance, we do a good bit of construction services. We’ve had to get special licensing in certain states to do specific things, whether we’re handling cash on behalf of the lender, or we’re approving the draw or something like that. So, staying in front of that has been a has been a challenge for us.”
