Fiserv, Inc. (NASDAQ: FISV), a leading provider of information technology services to the financial industry, today announced the successful conversion of Pittsburgh, Pa.-based Dollar Bank’s mortgage portfolio to the Fiserv Loan Servicing Platform after a highly accelerated conversion process managed jointly by the bank and Fiserv.
In order to increase profitability and contain operational costs, many financial institutions have looked to back office consolidation. To that end, Dollar Bank sought to replace multiple servicing systems with a single platform to manage both its mortgage and consumer loans. Prior to migration to the Fiserv platform, Security Savings Mortgage Corporation (SSMC), a wholly-owned subsidiary of Dollar Bank, was handling first mortgage servicing and secondary market securitization for the bank on its mortgage platform while the bank was using a different system for its consumer loans.
“The Fiserv Loan Servicing Platform is an advantage to Dollar Bank because it handles all types of retail loans, not just first mortgages,” said Al Williams, senior vice president of Dollar Bank and chairman of the board at SSMC. “Additionally, a single system provides substantial opportunities for reduction in expenses that the bank expects to start realizing this year.”
The Fiserv Loan Servicing Platform supports mortgages, closed-end second mortgages, home equity lines of credit, unsecured credit lines and both secured and unsecured installment loans. In order to replace mono-line loan servicing technology and streamline systems maintenance Dollar Bank now uses the system to service a mix of residential mortgages and home equity loans. The bank will add its installment loans and lines of credit to the platform later this year.
The platform’s ability to provide mortgage and consumer product support has the potential to reduce expenses, mitigate risk and help grow revenues, especially for home equity products.
“Home equity loan terms are extending out to between 20 and 30 years,” said Jeffrey Morrow, executive vice president of Dollar Bank. “A significant percentage of our home equity loans today are residential first liens, which resemble traditional mortgage loans. Dollar Bank is able to use the Fiserv Loan Servicing Platform’s investor accounting and escrow functionality to package these loans for secondary market sale, as well as to escrow for taxes. Systems that only support consumer loans just don’t provide those capabilities.”
Dollar Bank has also gained the ability to process loan transactions in real-time so that every authorized employee is kept aware of loan status changes as they happen. This enables the bank to quote payoff amounts and manage reinstatements more quickly and accurately. Real-time processing facilitates the production of checks online to improve internal control over immediate disbursements and compliance with rescission periods.
Due to contractual constraints, Dollar Bank required rapid conversion of its residential portfolio to the Fiserv Loan Servicing Platform. System implementation typically requires 12 to 18 months, but Dollar Bank only had a six-month implementation window for their portfolio. Morrow said Fiserv was able to implement the conversion in five months and complete the work well within the budget.
“For many software conversions, the plan is something put on paper at the beginning and is never really followed,” said Williams. “In 2003, Dollar Bank installed the Fiserv UniFi PRO loan origination system. The success of that conversion gave us a very positive experience with Fiserv implementation services. This time, Fiserv customized an accelerated conversion plan to meet our needs. The scheduled work was carried out and reported on day-by-day. A successful execution resulted from the discipline and dedication of all the Fiserv and Dollar associates involved.”
“By having both consumer and mortgage loans on a single servicing platform, Dollar Bank is laying the groundwork for future growth,” said Thomas Gorman, president of Fiserv Loan Servicing Products. “Use of the Fiserv Loan Servicing Platform will save hard dollar costs while providing Dollar Bank with an enhanced ability to support a diverse product mix and generate new revenue opportunities.”
