The mortgage market is showing signs of recovery. After years of navigating higher interest rates that begin to rise in late 2021, lenders see a way forward. The Mortgage Bankers Association’s (MBA) January 2026 Mortgage Finance Forecast projects that single-family loan volume will increase by 2026 to $2.2 trillion by 2026, up from $2.05 trillion last year.
As originations grow, many lenders see selling loans to Government Sponsored Enterprises or other investors as an important strategy to free up capital and manage portfolio risk. But did you know that there is a benefit to maintaining commercial loan servicing rights that creates a steady stream of income through servicing fees while strengthening borrower relationships that can lead to future business?
Getting caught? Appropriate software is required for this to work.
Hidden costs of using the Core System
At first glance, basic banking system servicing functions seem like an easy option for lenders evaluating their servicing software options. It’s already there, it’s already paid for, and it handles other products well. Why add more software?
The truth is more complicated. Mortgage servicing involves regulatory requirements and operational difficulties that are significantly different from those of other loan types and products. Key systems can handle auto loans and personal loans more effectively because those products follow specific payment schedules and reporting requirements. Mortgages have many layers.
Escrow management alone presents challenges that most legacy systems were not designed to handle. Tracking property taxes and insurance premiums, performing annual escrow evaluations, and managing deficits and surpluses often require operational strategies where basic software lacks dedicated mortgage functionality. What looks like cost savings on the software side turns into labor costs on the operational side.
The same pattern repeats with investor reporting. Fannie Mae® and Freddie Mac® they have specific reporting requirements that may vary by loan type and other factors. Without automated workflows designed specifically to meet these needs, service delivery teams spend hours each month manually compiling reports and reconciling data. That’s not just inefficient, it’s dangerous. Manual processes increase the potential for errors that can lead to compliance issues, strained investor relations, and/or costly payouts.
Building efficiency with purpose-built software
The question is not what the core system is it can be service bills. Technically, it can. The question is the lenders it should reliance on it and that doing so prevents profitable growth in the servicing portfolio.
FICS’ Mortgage Service®dedicated mortgage servicing software, addressing the unique needs of the business. Here’s what separates the Mortgage Servicer from the basic functions that most employees stick to using in their context:
A flexible investor report
The requirements for a Government-Sponsored Enterprise (GSE) are not static. When Fannie Mae or Freddie Mac revises reporting formats or compliance standards, the Mortgage Servicer quickly adapts. Automated investor reporting eliminates manual consolidation work and reduces the risk of missed deadlines or formatting errors that could disrupt investor relations.
Escrow management without headaches
Complete escrow management means that the software handles the initial setup of the escrow, performs automatic annual reviews, processes interest on escrow accounts, tracks all escrow-related payments, and generates required statements without manual intervention. Tax service integration ensures that property tax changes are captured and reflected in borrower payments immediately.
Giving borrowers control
Today’s borrowers expect digital access to their mortgage information. Web applications, such as FICS’ eStatus Connect®allow them to view loan details, access statements, and pay on their schedule. This reduces call center volume while improving satisfaction. Automatic payment reminders and account notifications keep borrowers informed without requiring staff time.
Integration with APIs
Application programming interfaces (APIs) may sound technical, but they bring practical benefits. APIs enable service software to communicate seamlessly with other applications, such as the host system, accounting software, and document management platforms. That automation eliminates duplicate data entry, reduces errors, and frees employees to focus on non-routine tasks.
Current information when you need it
Real-time access (RTA) is important to everyone who touches a mortgage account. When a borrower calls with a question, the customer support team should quickly see the current balance, recent payments, and upcoming due dates. When the teller processes the payment at the branch, the mortgage software should update immediately. RTA eliminates delays and cuts that frustrate employees and borrowers.
Making a business case
The decision to invest in a mortgage servicer comes down to potential and growth strategies. If lenders look at servicing as a revenue opportunity and a way to maintain borrower relationships and generate recurring revenue, then the operational constraints of the core system can hold the organization back.
Employees using purpose-built servicing software, such as a Mortgage Servicer, can handle more loans per transaction because automation reduces manual tasks. They maintain strong investor relations because reporting is timely and accurate. They deliver a better borrower experience by using self-service tools and real-time information to make it easier and more transparent.
Mortgage market projections for 2026 create an opportunity for lenders who are in a position to capture it. Having the right infrastructure in place means lenders can grow their portfolios profitably, meet investor expectations consistently, and build borrower relationships that build business long after the initial loan closes.
