Loan Servicing Manager Job Description

The Rise and Fall of Mortgage Loan Servicing

Loan servicing can be carried out by the bank or financial institution that issued the loans, a non-bank entity specializing in loan servicing, or a third-party vendor. Loan servicing is the obligation of the borrowers to make timely payments of principal and interest on their loans to maintain their creditworthiness with their lender and credit-rating agencies. Loan servicing was seen as a core function within banks.

Banks were responsible for the administration of the original loan. That was before the securitization of loans changed the nature of banking and finance. The servicing of loans became less profitable after they were repackaged into securities and sold off.

The loan servicing part of the life cycle was opened up to the market. The industry has become dependent on technology and software due to the record-keeping burden of loan servicing and the changing habits and expectations of borrowers. Student loan servicing is a big business, as it is worth trillions of dollars and represents the bulk of the loan servicing market.

Only three companies were responsible for collecting payments on 98% of outstanding government-owned student loans in the year of 2018, amounting to $950 billion. The trend among big mortgage loan servicers is to slowly back away from the marketplace in response to regulatory concerns. Smaller banks and non-bank servicers are moving into the space.

The mortgage meltdown brought increased scrutiny to the practice of transferring loan servicing obligations. The cost of loan servicing has gone up, and there is always the chance for more regulation. Some loan servicers have embraced technology to try to reduce compliance costs, and some banks have been focusing on servicing their own loan portfolio to keep their connection with retail clients.

Consumer Loan Servicing Managers

Consumer Loan Servicing Managers are directly supervising a team of specialized clerks to ensure accurate and timely receipt of information and documents within a lending organization, as they are an integral part of the Loan application process. Large financial institutions such as banks, credit unions, and mortgage brokers have a majority of Consumer Loan Servicing Managers who help to facilitate and streamline the loan process by giving responsibilities to other people. The annual income of a Consumer Loan Servicing Manager can vary wildly, and is typically with professionals in comparable positions across the industry.

Most Consumer Loan Servicing mangers make between $60,000 and $70,000 per annum, with the median salary being around $66,000 a year. With each boost to the economy, consumer loans are on the rise, and with each skilled profession, there are always opportunities for advancement. More loans mean more jobs in the business sector, including Consumer Loan Servicing Managers.