Mid America Mortgage, Inc. [1] recently announced that it has completed the transition of its servicing operations to its newly-formed in-house servicing department. As of November 4, 2019, Mid America’s national servicing portfolio, which currently comprises more than 35,000 loans from across the Mid America family of brands, will be managed by an internal staff of approximately 40 employees located in the firm’s Addison, Texas headquarters. The question now is: does this suggest a widespread trend?
“After working with our subservicer for the last nine years, we realized the time was right to bring our servicing operations in-house,” said Mid America Owner and CEO Jeff Bode. “With this transition, our team will be able to provide even more personalized attention to Mid America’s valued customers.”
Mid America's shift to in-house servicing suggests a break from recent servicing trends. A report from the the Urban Institute’s Housing Finance Policy Center's Mortgage Servicing Collaborative (MCS), titled The Case for Uniform Mortgage Servicing Standards [2], notes that sub-servicing volume has been on an incline since Q4 2013 as of Q1 2018. However, subservicing still makes up less than 25% of the share of servicing outstanding.
In order to make the shift to in-house servicing smoother, Mid America is adapting to new technology. Mid America notes that it has made investments in technology to digitize its servicing division by eliminating paper and encouraging paperless billing and electronic payments.
“The benefits of a digital mortgage environment are undeniable, and having committed ourselves to being as digital as possible on the origination side of the house, we felt duty bound to do the same in our servicing operations,” Bode added. “By lowering our operational costs and streamlining borrower communication, we are able to improve service levels while passing on the savings to borrowers in the form of lower rates and origination fees, which continue to pay dividends for borrowers over the life of their loan.”