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What Will the Future Hold for Commercial Mortgage Servicers

What Will the Future Hold for Commercial Mortgage Servicers

By Tim Moreland

In 2016, the mortgage industry originated $502 billion in commercial mortgages, which was down just a bit from the $504 billion lenders originated in 2015. The Mortgage Bankers Association had forecast $515 billion in lending activity for 2017.

To find out whether the industry was meeting this forecast and what impact either making or missing this mark would have on commercial mortgage services, SLK Global sent a team of executives to the MBA’s Commercial/Multifamily Servicing and Technology Conference in Phoenix, Arizona.

We wanted to share our key takeaways from this event. First, some background. The MBA’s CMSC show is designed to advance the commercial servicer’s business and professional performance in the year ahead. The trade association puts on a dynamic conference, packed with networking opportunities and great information. Attendees had access to information including:

  • State of the Industry Sessions outlining key trends and economic and market drivers shaping servicing
  • Industry Expert Panels sharing emerging insights and leading practices to help you grow your business
  • Peer Roundtable Discussions providing new strategies for addressing business challenges in the years ahead
  • Special Networking Events

The other thing the association did this year that was well received was to offer special discounts to younger members (35 and under). What a great way to encourage younger professionals to get more involved in the industry. Kudos MBA!

In general, we found the show to be well attended and the tone of the conference to be positive. We connected with many executives at the show, a surprisingly high percentage of whom were younger professionals. We met a number of younger execs that we expect to be future leaders of their companies in the future.

For our part, we were visiting with clients and prospects about our Real Estate Tax Servicing platform for both residential and Commercial properties. There are many cases in which these affordable tools can provide exactly the type of information the servicer needs without going to the expense of a full commercial appraisal. We made some great connections.

Given the continued uncertainty regarding new rules and the new administration, we expected to engage in more conversations around compliance. Servicers were less concerned with compliance this year than in the past and certainly less concerned than rising interest rates and their potential to slow originations. Servicers at this show were very focused on their future pipelines and were seeking information about what their counterparts on the origination side of the business were planning in case rates continued to rise.

On the technology side, we didn’t see much to get us excited on the exhibit hall floor. According to the panel of experts in a session focused on Agile Development, it seems pretty clear that most companies in our space remain behind other industries in this area.

That said, developers of leading servicing systems remain eager to provide their customers with the best technologies available. We had a number of conversations that could result in our tax service being more tightly integrated into more of these systems. The idea of getting tax data from SLK Global’s RETS platform fed directly into the servicer’s primary servicing system would allow servicers to collect data for a few thousand properties but spread the overall costs over the entire portfolio. This seemed very attractive to some of the people we visited with.

In addition, tax management would be streamlined for the servicing system provider because instead of trying to manage all of that date for their hundreds of clients, they could provide it all via RETS through a single channel that would easy and less expensive for them to manage.

Overall, we found Commercial Servicers ready and willing to do more business, but watching the market carefully for signing of slowing origination volume, which many are expecting as the year progresses.

About the author
Timothy Moreland is Senior Vice President, SLK Global Solutions, a firm that provides technology based solutions for the real estate lending and settlement services industry. Tim can be reached at timothy.moreland@slkgroup.com.

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