Go With Highest Quality, Not Lowest Price When Choosing a Servicer

Recently, we shared the reasons why lenders, banks, brokers, and other companies are outsourcing residential mortgage servicing responsibilities to third-party providers. You’ll notice that one of those reasons isn’t because they were the lowest price.

Let’s face it, many companies are saddled with even tighter budgets these days. Yet while reducing operational costs is one of the main benefits of partnering with a servicer, that doesn’t mean choosing the least expensive servicer is the right decision.

Your choice should be based on quality, performance, reliability, and then cost. If the provider doesn’t deliver those first three, it doesn’t matter what they charge you. You’re probably paying too much. Here’s why.

Quality Is Always Worth It

Like the skydiver once said (emphasis on “once”) when his chute didn’t open, “Maybe buying the cheapest option wasn’t a good idea after all.” Your company prides itself on offering optimal services and products to your customers. And, as you know, that requires a constant investment. It’s the same with servicers.

As we pointed out in the previous blog, mortgage servicing is complex and requires professionals with extremely specific skillsets using the latest technology. Both of those cost money to maintain. While it is true that charging the most doesn’t always mean you’re getting the best quality, charging the least every time should send up red flags.

Some servicers may be the lowest price for a reason. Are they cutting corners? Are they not following applicable laws and best practices? Maybe they just can’t offer the same level of services as other providers. You can’t afford to risk any of those. But quality is always worth the price.

Performance and Reliability

Third-party providers are only worth the level of reliable service they deliver. Take a look at your current and previous suppliers. Not just for servicing, but everything. Are the ones you pay the least giving you the best performance and utmost reliability?

If not, why? Are they making mistakes? Are they not communicating? Are they missing deadlines? Are they not committed to you and your success? Are they even still in business?

Perhaps they dropped you to the bottom of their customer priority list because their other clients pay more? Would that be surprising? After all, which clients do you focus on first; those who pay you the most or the least? Why would servicing providers feel differently?

A Low Price Isn’t the Same As Value

It’s surprising how many people consider low pricing to be the same as value. While a low cost may sometimes end up being a value, it isn’t dictated by the actual price tag. Basically, price is the amount a customer pays for a service or product. Value is what the customer feels that service or product is worth to them based on benefits they provide.

It’s even more surprising how many companies choose servicing providers based solely on pricing.
You need to first search for servicers that offer what you feel is exceptional value. Will they be able to help your company help your customers as a reliable true partner?

Also, make sure they aren’t offering a low initial price with the intent of raising it substantially once you’re working with them. Then compare all their quotes and weigh price vs. value. Most times, you’ll realize that the best value isn’t the lowest price.

For True Value, Talk to Selene Finance

If you’re searching for a residential mortgage servicer that provides exceptional value for you and your customers, talk to the experts at Selene. We’re a specialty loan servicer with a history of outstanding performance offering full-service capabilities supporting all aspects of residential mortgage servicing.

Our servicing strategy is designed to reduce, mitigate, or eliminate loss exposure while maximizing cash flow — all at a price that fits your specific budget. Contact us today.