servicing

ser·vice

S0286800 (sûr′vĭs)n.1. a. Work that is done for others as an occupation or business: has done service for us as a consultant.b. The performance of work or duties for a superior or as a servant: found the butler's service to be excellent.c. An act or a variety of work done for others, especially for pay: offers a superior service to that of his competitors; provides full catering services.2. a. Assistance; help: was of great service to him during his illness.b. An act of assistance or benefit; a favor: My friend did me a service in fixing the door.3. a. The serving of food or the manner in which it is served: The service was good, but the food was lousy.b. A set of dishes or utensils: a silver tea service.4. a. Employment in duties or work for another, as for a government: has been in the company's service for 15 years.b. A government branch or department and its employees: the diplomatic service.c. A department or branch of a hospital staff that provides specified patient care: the anesthesiology service.5. a. The armed forces of a nation: joined the service right after college.b. A branch of the armed forces of a nation.6. a. The installation, maintenance, or repairs provided or guaranteed by a dealer or manufacturer: a dealer with full parts and service.b. The provision to the public of something, especially a utility: a town without sewer service.c. The system or equipment used to provide something to the public: The electrical service was damaged in the storm.7. Sports a. The right of serving in many court games.b. A serve: Her first service hit the net.8. A religious rite or formal ceremony: held services in the evening; a memorial service.9. Copulation with a female animal. Used of male animals, especially studs.10. Law The serving of a legal process, such as a summons or court order.11. The material, such as cord, used in binding or wrapping rope.12. An answering service.tr.v. ser·viced, ser·vic·ing, ser·vic·es 1. To make fit for use; adjust, repair, or maintain: service a car.2. To provide services to: That cable company services most households in the area.3. To make interest payments on (a debt).4. a. To copulate with (a female animal). Used of a male animal, especially studs.b. Slang To have sex with.adj.1. Of or relating to the armed forces of a country.2. Intended for use in supplying or serving: a service elevator; the service entrance.3. Offering repairs or maintenance: a service guarantee; a road service area.4. Offering services to the public in response to need or demand: a service industry.Idioms: at (someone's) service Ready to help or be of use. be of service To be ready to help or be useful.

[Middle English, from Old French, from Latin servitium, slavery, from servus, slave.]Usage Note: The verb service is used principally in the sense "to repair or maintain": service the washing machine. Exceptions to this usage include specialized senses in finance (service a debt) and animal breeding (service a mare). Serve means "to supply goods or services to," as in One radio network serves three states.

servicing

(ˈsɜːvɪsɪŋ) nthe act or process of overhauling or repairing (a car, machine, etc)

servicing

See: common servicing; cross-servicing; joint servicing. See also inter-Service support.

Thesaurus

Noun

servicing - the act of mating by male animals; "the bull was worth good money in servicing fees"servicemating, pairing, sexual union, union, coupling, conjugation - the act of pairing a male and female for reproductive purposes; "the casual couplings of adolescents"; "the mating of some species occurs only in the spring"

Translations

servicing

Debt Service

The amount of money required to make payments on the principal and interest on outstanding loans, the interest on bonds, or the principal of maturing bonds. An individual or company unable to make such payments is said to be "unable to service one's debt." An example of debt service is a monthly student loan payment. See also: Debt service coverage ratio.

servicing

Providing management,oversight,payment receipt,property insurance monitoring,and all other functions related to ongoing loan activities after origination.Most loan originators sell the servicing to third-party companies.

Servicing

Administering loans between the time of disbursement and the time the loan is fully paid off.

Servicing includes collecting payments from the borrower, maintaining payment records, providing borrowers and investors with account statements, imposing late charges when the payment is late, and pursuing delinquent borrowers. In many cases, servicing agents also pay property taxes and insurance with money placed in escrow by the borrower.

The Poor Quality of Servicing Overall: From a borrower perspective, the quality of servicing is generally low. The Department of Housing and Urban Development (HUD) reports that two of every five complaints they receive from borrowers involve servicing issues. J.D. Powers and Associates, which measures consumer satisfaction with business services of many kinds, reports that only 10% of borrowers are happy with their servicing agent.

The financial incentives to provide good service, which work in other sectors of our economy, don't work for loan servicing. The borrower selects a lender or mortgage broker, not a servicing agent. The major focus is the price of the loan. Rarely if ever does the expected quality of servicing come into the picture.

Information on the quality of servicing is not generally available, and even if it was, the borrower has no way to know that the lender making the loan will also be servicing it. Most loans are sold shortly after origination, and while servicing sometimes is retained by the seller, often it isn't. In addition, servicing contracts are bought and sold in an active market, much like bonds. This means that any borrower at any time can find his loan suddenly being serviced by a different firm.

The fact that borrowers have little say in who services their loan would not be so bad if they could fire their servicing agent for poor performance, but they can't. The only way to rid yourself of a servicing agent is to refinance, but then you are gambling that the new one will be better, which is a bad bet.

Since borrowers can neither choose nor fire their servicing agents, quality of service has no impact on an agent's bottom line. For most, there is no business reason to provide quality service to borrowers.

Quality Servicing by a Few: A few enlightened firms have adopted the view that the borrowers they are servicing are potential customers for new services. A business strategy of “targeted cross-selling” requires attention to service quality. A borrower who is miffed because his taxes weren't paid on time is a poor candidate for cross-selling. Unfortunately, this approach has not made major inroads in the industry.

Predatory Servicing:At the opposite pole are the servicing predators, whose business strategy is to extract as much additional revenue from the borrowers they service as the law allows. Here is an outrageous example:

A borrower made his monthly payment on the 16th of the month—one day after the grace period. Without notice, the lender
imposed a late charge on that payment, and then proceeded to collect that charge by deducting it from the following month's pay-
ment. That payment was made on time but recorded as late because of the deduction of the late charge from the previous month, which generated still another late charge. Seven consecutive payments were made on time but recorded as late because of the deduction of late charges on the prior payments.

Predatory servicing agents who purchase servicing will examine each note to determine whether they are entitled to shorten the grace period or raise the late fee. If there is some excuse for considering the property to be underinsured, the agent will purchase over-priced insurance and add the cost to the loan balance. Extra payments to principal will not be credited in a timely fashion and the borrower will not know because monthly statements are incomplete.

Recourse: Since borrowers can't fire their servicing agents, what can they do to protect themselves? If you have been mistreated, you should file a written complaint with the lender addressed to customer service. Do not include it with your mortgage payment, which you should continue to make separately. State:
Your loan number.
Names on loan documents.
Property and/or mailing address.
This is a “qualified written request” under Section 6 of the Real Estate Settlement Procedures Act (RESPA).
I am writing because:
[Describe the problem and the action you believe the lender should
take.]
[Describe any previous attempts to resolve the issue, including con-
versations with customer service.]
[If it is relevant to the dispute, request a copy of your payment history.] [List a daytime telephone number.]
I understand that under Section 6 of RESPA you are required to acknowledge my request within 20 business days and must try to resolve the issue within 60 business days.

If this doesn't do the trick, you can file a complaint with HUD. You can also sue. According to HUD, “A borrower may bring a private law suit, or a group of borrowers may bring a class action suit, within three years, against a servicer who fails to comply with the provisions of Section 6.”

You can also file a complaint with the government agency that regulates the servicing agent. Here are Web sites you can use to contact these agencies:

• For national banks, www.occ.treas.gov/customer.htm.
• For federally-chartered savings and loan associations, www.ots.treas.gov/contact.html.
• For state-chartered banks and savings and loans, www.lendingprofessional.com/licensing.html.
• For mortgage banking firms, www.aarmr.org/lists/members-IE.html.

If you don't know the proper agency, you can send the complaint to the Consumer Protection Division of the state attorney general. It will be forwarded to the relevant state or federal agency.

Preventative Measures: Borrowers should periodically check their transaction history to make certain that a) payments are always applied to the balance at the end of the preceding month, b) tax and insurance payments from escrow are correct and there have been no double payments, c) rate adjustments on ARMs are in accordance with the method stipulated in the note, and d) there isn't anything in the history that looks “funny.”

Any borrower who does not receive a complete transaction statement at least annually should periodically submit a “qualified written request” for one using the form described above.

Servicing for Borrowers: Under existing arrangements, servicing systems are designed to meet the needs of lenders and they won't meet the needs of borrowers until they are redesigned for that purpose. This is possible and may be in the cards. Borrowers must be willing to pay for the service.

Aservicing system for borrowers (SSB) would not replace existing servicing systems. The firms providing the services described below could be called “second-tier servicers.” Borrowers would make their payments to second-tier servicers, which would then make payments to the primary servicers.

With the payments going through its hands, the second-tier servicer has command of information on the borrower's payment history. In contrast to the primary servicer, however, the second-tier servicer will use the information to provide useful services to the borrower. The services, for which the borrower will pay a modest monthly fee, will be provided over the Internet.

Access to Payment History: The major purpose is to provide peace of mind that the lender is properly crediting mortgage payments. The SSB would allow borrowers to monitor their accounts continuously and the “what-if” capacity would allow them to experiment with different future payment patterns.

Access to Details of ARM Rate Adjustments: The major purpose is to provide peace of mind that the new rate has been properly calculated. The SSB would show the details of the ARM rate adjustment, rather than just the resulting new rate, which is all borrowers get now. Borrowers will also be able to forecast what the new rate will be months in advance so they can prepare for a possible refinancing.

Cost-Reduction Refinance Opportunities: The purpose is to flag profitable refinance opportunities. The SSB would continually monitor the relationship between the borrower's interest rate, current market rates, and the borrower's credit as affected by his or her mortgage payment record.

Cash-Raising Opportunities: The purpose is to provide borrowers who request it with a tool for assessing alternative ways to raise cash. The system would already know many of the required data inputs, including the borrower's existing mortgage balance and terms, as well as current market terms. Other data inputs, such as the amount of cash needed, would be entered by the borrower.

PMI Termination: The purpose is to give the borrower a “heads-up” that it may be possible to terminate mortgage insurance. Automatic termination under the federal legislation passed in 1999 does not take account of extra payments to principal or house price appreciation. Earlier termination that does take account of these factors requires that the borrower take the initiative.

Alternative Payment Options: The purpose is to allow borrowers to pay biweekly, bimonthly, or weekly. Borrowers may prefer one of these options because they find the schedule more convenient or because they want to build an early payoff plan around shorter payment periods.

servicing

ser·vice

servicing

servicing

Servicing

servicing

Servicing

REFERENCES

servicing

Debt Service

servicing

Servicing

servicing

Synonyms for servicing

noun the act of mating by male animals

Synonyms

Related Words