In today’s ever-changing world of mortgage finance and servicing, there are many obstacles and challenges each enterprise must overcome to remain competitive and compliant in the marketplace. The foundation and core of mortgage financing is providing the needed funds for borrowers to achieve the American dream of homeownership. Additionally, the most fundamental activity that must occur over the life of the loan is the repayment of the debt. It is essential for servicers to make this process as simple as possible for the borrower, while also ensuring efficient acceptance and application of these payments.
Today, servicers have various ways to manage the process of accepting payments, each one unique to the way the borrower intends to pay. The process appears simple: the borrower has a debt and makes monthly payments over the life of the loan with the intention of paying it off. But the reality for servicers is there are often complications and manual interventions due to exception handling. While advances have been made in the payment process, including lockbox (for paper check ingestion), ACH, wire and other capabilities, when the amount due does not align with the amount paid by the borrower, you are faced with an exception process that still requires manual intervention. Even when utilizing outbound calls, letters, emails and other forms of communication, today’s homeowner may be unaware of the issues that have just occurred.
As we look at the payment exception management process, servicers must wonder why our industry has not provided a solid solution to this never-ending problem. Despite the various technological enhancements over the past three decades, payment exception management still relies heavily on manual intervention, whether handled internally or outsourced. The mortgage industry has invested time and resources to develop technology to support underwriting, secondary marketing transactions, due diligence reviews and many other functional processes, but the fundamental process of payment exception handling has yet to be fully addressed.
That’s why REPAY has focused efforts on improving this process within its PaymentIQ platform, working with advanced lockbox providers and other industry partners to spearhead simplifying and streamlining payment exception management. Through these partnerships within the industry, PaymentIQ has been enhanced to support business rule configurations and technology, including OCR, to ensure the proper application of payments, no matter the amount the borrower pays.
Let’s explore a few ways PaymentIQ helps increase efficiency for servicers.
- A borrower sends in a physical check payment via a lockbox and the coupon does not match the amount of the funds sent. Instead of placing the funds into the borrower’s suspense account, REPAY’s LIFT platform can utilize custom business rules and logic to apply the payment to escrow, principal and more, while keeping the borrower informed. There is no need for manual intervention, and because of REPAY’s integration capabilities, every item ties back to the system of record, providing realtime updates and accurate reporting.
- Bill pay and paper checks. For borrowers who utilize a bank that only supports paper checks for payment, REPAY’s technology can read, react and apply the payments to the appropriate accounts. Multiple associated accounts on one check are not an issue, and the ability to perform customer lookups for the specifics of the individual loan account provides a head start in processing the payments.
- Bankruptcy payments made via a trustee. A historically manual process, even if payment was submitted via ACH, still requires research to determine how the funds should be applied as Pre-Petition and Post-Petition payments. PaymentIQ automatically exchanges data with the trustee database to ensure funds are correctly applied as they continue down the path of repayment.
PaymentIQ from REPAY solves many issues that payment exception management presents. It is time for servicers to implement exception automation capabilities to provide time and cost savings and reduce the headaches manual processes can cause for services and borrowers. Contact REPAY to schedule a demo to get started with enhanced payment exception management.