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   ARTICLE   |   From Scotsman Guide Residential Edition   |   May 2014

The Benefits of Online Mortgage-Payment Systems

With the right system in place, mortgage banks may reap numerous benefits

For mortgage bankers and originators, technology is often an invitation to streamline operations, enhance convenience and ensure the collection of mortgage payments. These advantages are all the result of the same phenomenon: online processing of monthly mortgage bills, which safeguards credit card or banking information and automates the timely delivery — without penalties or late fees — of payments to a specified institution.

Although this concept isn't novel by design, it’s certainly revolutionary by its outcome: a complete break from the world of physical letters and bills to be sorted, deposited or, in the case of insufficient funds, returned by a lender. Transitioning away from paper-based payment processes and all their erroneous effects — failure to receive a bill, customers forgetting to send a payment, etc. — can be a victory for banks and customers alike.

Mortgage bankers and originators can take full advantage of these opportunities if they’re prepared to not only include but also promote this choice in existing or new mortgage agreements. The availability of online mortgage payments can result in numerous other benefits, as well, including a higher rate of payment, a lower ratio of missed statements and a decrease in the risk of a sudden spike in defaults.

The convenience factor of online mortgage payments is therefore twofold. For borrowers, there is the “set-it-and-forget” peace of mind that comes with using a credit card. For mortgage lenders that offer these systems, online payments can provide a degree of stability missing from the conventional pay-and-mail system of the past. That environment, with its unforeseen events, irregular results and extraneous costs, often lacks the consistency and solid balance sheet that lenders want.

Mortgage companies interested in offering online mortgage-payment systems should ask themselves one key question: Who can we entrust this process to? Mortgage organizations should find vendors that can customize solutions to meet or exceed their own measurements of success. Again, technology can be a source of innovation and inspiration for economic leadership. In today’s mortgage industry, strong leadership is often defined by a commitment to regulatory compliance. In light of that commitment, mortgage organizations should employ rigorous principles when shopping for a merchant-account provider responsible for processing online mortgage payments.

When shopping for vendors of these systems, mortgage organizations should keep their criteria simple and strict: Only offer online mortgage-payment systems that emphasize speed, security and overall success. Without a guarantee of these three S’s, the technology can lead to data breaches, identity theft, customer complaints and delays.

Due diligence is the best way to offset these potential problems, and in this regard, mortgage organizations should shop for systems with a human face behind them. That is, it is essential that the software and hardware be personalized and intelligible. Engineers use this principle to make otherwise abstract ideas accessible to the public. Bankers and borrowers alike should know that dedicated professionals manage and protect their sensitive material, and do so without compromising the seamless processing of mortgage payments.

To accomplish this, and to uphold the respective criteria of lenders throughout the country, a merchant-account provider must avoid the temptation to adopt a one-size-fits-all solution that suits no one comfortably. Instead, mortgage companies should seek to work with vendors that design customized payment-processing systems for their clients.

Finally, originators should seek out vendors who offer a degree of transparency when it comes to their mortgage-payment system processes. In other words, technology vendors should establish their credibility by giving mortgage companies — and their borrowers — the freedom to see the intricacies of the process itself without divulging trade secrets or patented tools. Lenders should be able to tour the virtual factory floor and observe the translation of so many ones and zeroes into the proprietary method for safely and swiftly automating online mortgage payments.

If technology vendors can satisfy their clients’ needs in these respects, mortgage lenders and originators will have another asset to finalize transactions and facilitate the prompt payment of their customers’ monthly mortgage bills. The subsequent goodwill among homeowners will accrue to relevant financial institutions, so long as the technology — or the people who make these applications — have the liberty to complete their jobs creatively and effectively. Ultimately, online mortgage payments can yield the consistent results lenders need, the convenience homeowners crave and the results that the broader economy expects to see.


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