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What’s Driving Mortgage Servicing?

Steven Frie, Director, Structured Finance, S&P Global Ratings

As Director of Structured Finance at S&P Global Ratings, Steven Frie’s primary responsibilities entail performing onsite reviews of mainly residential, and some asset-backed servicers, with subsequent production of an analysis and ranking of the entities’ operations. He recently spoke to DS News about the new trends he’s seeing in the servicing industry and his insights into the origination side of the business.

What trends are you seeing in the servicing industry this year?

One of the notable trends is the continuous growth of many non-bank servicers as they persist in their efforts to expand their servicing businesses through portfolio purchases of distressed accounts while also continuing to expand their portfolio of prime loans serviced.

Additionally, although the Bureau of Consumer Financial Protection (BCFP) has adopted a somewhat less assertive approach to enforcement, they continue to be involved in investigations, and most notably, many states have conversely indicated they will take a more assertive approach to regulation.

Finally, servicers are more active in exploring artificial intelligence (AI) within their operations to reduce manual processes, and concurrently, reduce costs as the cost to service a loan has risen substantially over the last several years. All of these trends will continue into 2019.

Your previous role at S&P entailed servicing and origination assessments of residential mortgage companies. Can you share some of your learnings about the industry from that role?

The biggest takeaway was that I got to learn more about the origination side of the business during my first year at S&P. My previous experience was always in loan servicing so I gained valuable insight into how a loan is made, in essence, seeing how a process works (underwriting, processing, etc.) before the account is closed and set-up on a servicing system. That really helped me fully understand the entire loan life cycle.

Previously, I had only handled loan servicing from a prime perspective, in that the accounts were mainly sold to Fannie Mae, Freddie Mac, and Ginnie Mae. Once I started at S&P, various other asset types were becoming popular such as subprime, high LTV, and subordinate lines (HELOC and closed-end seconds) so I learned more about the different aspects of servicing these other product lines.   

What does a typical day look like for you and what is the most rewarding aspect of your job?

My day generally encompasses analyzing notes and other materials that I have received as a result of my client onsite reviews and preparing a report that ranks their operations. I also write articles and communicate frequently with my colleagues about industry topics.

The people I work with are some of the nicest and intelligent individuals I have worked with over the course of my career. What makes my job enjoyable is the fact that there are no egos within the team, and we understand the meaning of the term “agree to disagree.”

About Author: Radhika Ojha

Radhika Ojha is an independent writer and copy-editor, and a reporter for DS News. She is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her masters degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha, also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Houston, Texas.
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