Top 5 Questions We Are Asked About Hosted Mortgage Loan Servicing
For over 11 years ABT continues to work with Banks and Credit Unions who are looking for an easy to use, Mortgage Servicing software tool for use in their Mortgage Departments. These organizations want a system that is hosted and provides a complete loan servicing solution. We have been asked many questions over the years. While each situation is unique, there are 5 questions that always come up.
Question 1: If I host with you, is my data safe?
Answer: A logical question. After all you are handing the financial records of your customer/members, to another company. If this data is compromised it could be disastrous. As I have mentioned in other blogs, research the company you are considering. A great way of doing this is to talk with their current clients who are hosting the same software you are considering. How long have they been hosting that software? Are they compliant with banking regulations and can provide proper certifications? Are they easy to work with? Do they know the software and how available is their Tech Support Group? Finding out the answers to these questions before the contracts are signed will help eliminate suprises later.
Question 2: Will I still need my IT department?
Answer: You are not looking to replace your IT dept. Rather you are trying to offload some of their work, allowing them to concentrate on the core banking systems. It is important to work with a hosting company that understands the software and can work with your internal IT dept. Your hosting company is an extension of your IT group. The two groups should work together and complement each other.
Question 3: If an issue comes up who should be contacted? the software vendor - our IT department - or the hosting company?
Answer: It depends... But a consistent plan of action should be laid out for your team. You do not want your people waisting time trying to figure who they should be calling. It is logical that tech support calls should begin with the hosting company (they are acting as an extension of your internal IT group). They should be able to identify the problem and bring in the approprate group(s) to create a solution to the issue.
Question 4: If my software is hosted by another company how can I get the data back into my Core System(s)?
Answer: Integration into existing systems is very important. You will need loan data flowing into your core system so your tellers can provide information to your customers. Utilizing the core system should provide a way for your customers to have access to their loan data as well. Being hosted does not change the processes of feeding data from one system to another, it is servers "talking" to servers, software "talking" to software. Whether your software is running in-house or is being hosted by a hosting vendor, the integration should be similar. Your options would be whether you would like the info "real-time" or an "end-of-day" feed. An experienced hosting company has probably set up their servicing solution to run with a number of Core Systems. If they do not currently run on a specific Core System, they should have the experience to still offer a helpful solution.
Question 5: What does it cost?
Answer: It depends? With ABT for example the cost of the software is covered in the hosting. This saves a great deal of up front costs. A hosted solution provides other savings as well because the hosting company is also paying for the hardware, the software to run the hardware environment, space in a "data center", personnel to run the data center environment, and qualified personnel who know the servicing platform and can provide your team technical support. The cost is generally 25% to 45% less than if you were to run the system(s) yourself.
Remember if you were to host a system yourself, you need to consider adding IT staff to handle the software (note: you will want a person who understands mortgage software is a great help, since they will be called upon to run last minute reports, manage updates, and train support personnel). When hosting the software internally you need to budget for purchasing and then updating hardware/software licenses as needed for your hosting environment, compliance with the stringent requirements of updates, back-up and Disaster Recovery, as well as fielding support calls from the Mortgage staff.
Hosted services are gaining momentum, and whether you call it cloud computing, Hosted Services, or Virtual Mortgage Desktop it makes a lot of sense to partner with an experienced hosting team.