New servicing technology is demonstrating that core servicing systems need improving to prepare for future developments.

As servicers deal with unprecedented times, situations and volumes, more and more are finding that their servicing system isn't enough to keep them apace with the market. There are some clear deficiencies in the major servicing systems currently on the market, prompting servicers to turn to other vendors to fill the void.

One area where servicers are particularly challenged is the area of loan modifications. For instance Pittsburgh, Pa.- based Urban Settlement Services has opted to replace its primary analytic and document solution and instead go with a traditional origination vendor, Mortgage Cadence

Urban Settlement, through their home retention work, has processed over 600,000 loan workouts in 2008 and is projecting volumes of 300,000 per month toward the latter half of 2009. The Mortgage Cadence product suite will work to allow Urban Settlement to bulk import upwards of 50,000 loans at a time, validate data, perform analytics and dynamically create and securely deliver the required loan modification documents for servicer approval and fulfillment.

In discussing why Urban chose Mortgage Cadence, James Smith, the president of Urban Settlement, said customer service was the biggest factor. "As our volumes mounted in 2008, we came to the realization that in order to maintain this level of service we needed to make some strategic changes to how we do business, and in particular find a technology solution that could further automate our processes.

"The standard servicing systems store a lot of data, but do not have the ability to aggregate and review this data easily, nor do they have the imperative loan data needed to run the proper validation and analytics required for loan modifications." Mortgage Cadence will provide Urban Settlement with a rules-based enterprise lending system, Web portal and electronic document solution that leverages demand-driven workflow and automated decisioning enabling them to automate the modification of troubled mortgages.

Michael Detwiler, chief executive officer of Denver-based Mortgage Cadence Inc., said, "Servicing systems are antiquated and rigid. There are really only two systems out there and anyone you talk to will tell you those systems aren't that great, but those are the only two out there so they use them. The systems can't analyze data and do predictive modeling. They are very reactionary. Those servicing systems never even contemplated having to do loan modifications because there wasn't a need."

Going forward, Urban will do a bulk import of loans into Mortgage Cadence Orchestrator, which will perform an Urban Settlement specific validation on all the loans. Next, custom analytics are run, based on tasks and parameters defined by Urban, to then slot the proper loans for modification. Orchestrator then exports all imperative information for servicer approval and Mortgage Cadence Finale generates the appropriate modification documents and delivers them securely to the servicer for fulfillment approval. Urban clients will access Mortgage Cadence Harmony for status, results, reporting and production documents.