Money
Mortgage servicing problems linger when no one owns the fix
By Bear Creek Staff, . Bear Creek Capital Network.
A servicing exception is an account problem, such as a mortgage payment that was received but not credited, that an automated process cannot clear and a person has to investigate. Say a loan moves to a new servicer and its escrow balance arrives $40 short. If that item lands in a shared inbox with no owner and no deadline, the borrower can end up disputing a late fee weeks later.
Dinesh Kumar Ravikumar makes that case in an opinion column for HousingWire. He designs software used by mortgage servicing teams. His view is that the servicing platform is rarely what fails. What fails is that nobody owns the problem or the clock.
For scale, the column points to Mortgage Bankers Association data from 2024: about $176 a year to service a loan that is being paid on time, against $1,573 for one that is not. Those figures compare the two kinds of loan. They do not measure what unowned exceptions cost, and the column does not claim they do.
Four fixes
The first fix is definitional. An exception label like "escrow mismatch after transfer" tells a worker nothing actionable. His better version names the actual job: find out which servicer holds the December escrow payment, then fix the balance. Vague labels let items sit because no one knows what resolving them actually means.
The second is ownership. He borrows the idea from IT support desks, where whoever logs a ticket stays responsible for it even after a specialist is pulled in. The same logic applies in servicing: when an escrow item moves to the tax team, the original owner keeps responsibility for the outcome. A shared inbox, by contrast, means everyone can see the item and no one answers for it.
The third is timing. Regulatory deadlines set the outer boundary, but the piece argues they should function as a guardrail rather than a target. Items that could affect a borrower's credit or trigger foreclosure proceedings need priority review. Others get a due date calibrated to their complexity and consequence.
The fourth is visibility at the point of borrower contact. A borrower who calls should not have to tell the story twice: the agent on the line should see the problem, its owner, the steps taken so far and the date of the next update, all in one place.
What this means for servicers
The four fixes are Ravikumar's recommendations as a practitioner, not findings from a study.
The test he offers is practical: for every open exception, can someone name the owner, the next step, the due date and the current status, and could a call agent read that to a borrower? A servicer that cannot answer that for its own queue knows where to start. How much fixing it would save is something neither the column nor the MBA data can say.
Source: https://www.housingwire.com/articles/servicing-exceptions-owner-clock/
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