Professional Documents
Culture Documents
ACKOWLEDGEMENT
My project has been influenced by annual report of the company and information
provided by employee the bank. As far as possible they have been fully
acknowledge at their appropriate places. I express my gratitude to all of them. My
deepest sense of gratitude goes to Mr. Chirag Deewan and Pankaj Kumar.
I am very much thankful to my mentor Prof. Khushboo Goyal &Prof. Suman Kumar
Dev who has been Source of incessant motivation for me.
Ashish Saxena
PGDM(2015-2017)
JK Business School
Gurgaon, Haryana
BONAFIDE CERTIFICATE
This is to certify that Mr. ASHISH SAXENA a student of JKBS Gurgaon, pursuing
PGDM, has successfully completed Summer Training at ENTRA SOLUTION
PVT. LTD. (A UNIT OF BSI FINANCIAL SERVICES), GURGAONfrom 09
May 2016 to 30 July 2016. As part of his curriculum, the project report entitled,
Analysis of Operation process in Entra Solution (A Unit of BSI Financial
Services). submitted by the student to the undersigned is an authentic record of his
original work, which he has carried out under my supervision and guidance.
I wish him all the best.
Date -
---------------------------Chirag Devan
(Dy. Manager)
Signature
Signature
----------------------(Prof.Khushboo Goyal)
LETTER OF AUTHORIZATION
INDUSTRY.during
my
summer
internship
at
ENTRA
SOLUTION PVT LTD. in partial fulfilment of the requirement for the Post
Graduate Diploma in Management program.
I guarantee/underwrite my research work to be authentic and original to the
best of my knowledge in all respects of the process carried out during the
project tenure.
My learning experience at ENTRA SOLUTION PVT LTD., under the
guidance of Mr. Chirag Dewan (Project Head), and Prof.Khushboo Goyal has been
truly enriching.
Date:
-----------------------------(Ashish Saxena)
Training Certificate
TABLE OF CONTENTS
Serial No.
Contents
Page No.
Executive Summary
9-22
Company Profile
23-36
Services
37-48
Operation Process
49
7.
50
8.
51
9.
52
10.
Learning
53
11.
Recommendation
54
12.
Conclusion
55
13.
Bibliography
56
14.
Executive Summary
8
Introduction to the
Topic
10
ABOUT TOPIC
Mortgage
A mortgage can be referred to in a variety of different ways, with the most common
being a home loan. Some may refer to a mortgage as a lien, which is the amount
of money a borrower owes on a related property. Whatever is left over from the
original loan amount is referred to as the existing lien.
Others might refer to the mortgage as a trust deed, or deed of trust, which is a legal
document that outlines the terms of the agreement between the homeowner and the
lender.
You can also use to word to describe the conveyance of property, which is the legal
process of transferring ownership in real property from one owner to another.
HOW MORTGAGES WORK
Regardless of the many terms, definitions, and variations, a mortgage is essentially
an agreement between a bank and a borrower to lend money in exchange for a piece
of property. Its a fairly simple concept.
Instead of paying for a home with cash, which most of us cant manage, you take
out a mortgage with a bank and repay it over a long period of time, typically 30
years. The lengthy term allows payments to be affordable.
Bank/Mortgage Lender >Mortgage >Borrower/Homeowner
A bank, otherwise known as a mortgage lender, will loan you a specific amount of
money that will need to be repaid in X amount of years at Y interest rate.
Generally, you must also provide a down payment for a portion of the sales price at
the time of purchase, such as 5-20%.
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Assuming you qualify for a mortgage, the bank will grant you a loan and you will
go into contract with that bank and begin making regular monthly payments until
your mortgage is paid in full or refinanced by another bank or lender.
The property acts as collateral in exchange for the mortgage. So if you dont make
your mortgage payments on time, the issuing bank has the right to take your home.
This is known as foreclosure.
If you sell your home before the mortgage term ends, the proceeds of the sale will
be used to pay off the remaining mortgage debt.
loans made by private lenders to veterans.
This allowed veterans to purchase homes at affordable rates without a down
payment. This was an extremely popular system that created a surge in demand on
the housing and mortgage markets. The economy boomed and Americas mortgage
system was praised for being efficient and stable.
1970s and the creation of Freddie Mac
As Baby Boomers grew older, their housing demands increased. They wanted to
purchase larger and more expensive homes. Unfortunately, the mortgage market
didnt quite have enough capital available to finance the needs of these homebuyers.
Thats where Freddie Mac comes in. In 1970, the U.S. Congress created an
organization called the Federal Home Loan Mortgage Corporation (FHLMC).
Today, we know that organization as Freddie Mac. The organization was designed to
increase the amount of financial capital available to mortgage lenders and, by
extension, borrowers.
To do that, Freddie Mac operated in a similar way to Fannie Mae. The organization
purchased mortgages from lenders, giving them more capital to spend on more
mortgages. Freddie Mac is also well-known for offering 30 year fixed-rate
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However, one of the worst and most predatory mortgage products created during
this period was the option ARM loan. An option ARM loan was an adjustable rate
loan which contained multiple repayment options. These loans often featured
repayment options where buyers owed more at the end of each month than they did
at the beginning. Low monthly payments sounded attractive but borrowers were
eventually stuck with extremely large mortgages they could not afford.
Ultimately, these factors achieved the governments goal of increased home
ownership across the country. Unfortunately, that increased home ownership would
come at a high price.
The Great Recession
The years leading up to the Great Recession of 2008 and 2009 were a great time
for mortgage companies. Unfortunately, the good times didnt last long.
The Great Recession was caused by a number of different factors, including a U.S.
housing bubble which peaked in July 2006, subprime lending, and a lack of
liquidity.
The U.S. housing bubble had generally remained stable throughout modern U.S.
history before reaching an astronomical high in July 2006. By late 2006 and 2007,
housing prices had declined and in 2008, the bubble finally burst as home price
indexes across the country reported record-breaking price drops. This was seen as
being the primary cause of the Great Recession.
At the same time, subprime mortgage lenders fuelled by a lack of regulation
happily gave out mortgages to virtually anyone who asked. These lenders were
accused of using predatory techniques to lure unqualified homebuyers into
purchasing a mortgage for a home that they could never hope to afford.
Many homebuyers defaulted on their subprime mortgages. At the same time, the
housing bubble had burst, which meant that homebuyers were paying for mortgages
15
that were worth far more than the actual value of the home, encouraging them to
default.
All of these factors combined to create the phenomenon we know as the Great
Recession. The combination of predatory lending, subprime mortgages, and the
housing bubble created the worst economic recession of our time.
Fannie Mae and Freddie Mac under government receivership
In September of 2008, both Fannie Mae and Freddie Mac were placed under
government receivership. The government was then responsible for all outstanding
mortgages that had been purchased or guaranteed by both companies a total of $6
trillion dollars worth of mortgages ($12 trillion dollars in outstanding mortgages
existed in the United States at the time).
The government takeover of Fannie Mae and Freddie Mac cost American taxpayers
billions of dollars. The bailout is estimated to have cost around $200 billion and
only a fraction of that loan has been repaid.
The bailout of Freddie Mac and Fannie Mae forced many people to rethink the
modern American mortgage. America simply cannot afford to have another Great
Recession.
Today, mortgages are more difficult to obtain than they were before the Great
Recession. In order to prevent another mortgage catastrophe, buyers need to be
educated about their mortgages and terms.
History of Mortgage
Mortgages have helped millions of people all over the world buy homes. Even if
you dont have $300,000 cash, you can buy a $300,000 home using a mortgage.
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Where did mortgages come from? What makes mortgages different from other
loans? Should you apply for a mortgage? Today, were telling you everything
youve ever wanted to know about the history of mortgages.
Early history of the mortgage
The modern mortgage has only been around since the 1930s, but the idea of a
mortgage has been around for a lot longer.
First, its important to talk about the meaning of the word mortgage. To understand
the word, we need to break it down into two separate Latin words: mort and
gage. Mort means death and gage means pledge. A mortgage is a dead
pledge.
Dont let that scare you! The dead part of the mortgage doesnt refer to you or any
other person. Instead, it refers to the idea that the pledge died once the loan was
repaid, and also the idea that the property was dead (or forfeit) if the loan wasnt
repaid.
Mortgages are mentioned in English common law documents that take back as far as
1190. These documents illustrate the beginnings of a basic mortgage system. They
describe how a creditor is protected in property purchase agreements. Specifically, a
mortgage was a conditional sale where the creditor held the title to the property
while the debtor could sell that property in order to recover the money paid.
Essentially, a mortgage is a loan secured by a property. Most people dont have the
liquid capital required to purchase a house entirely on its own and mortgages help
these people purchase homes and properties.
The first mortgages in America
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The idea of a mortgage started in England and moved throughout the western world
from 1190 onward. In the late 1800s and early 1900s, Americas waves of
immigrants increased the need for mortgages and affordable property.
Unfortunately, mortgages at the turn of the century were different from mortgages
today. In the early 1900s, homebuyers typically had to pay a 50% down payment
with a 5 year amortization period. This meant that those who bought a house or
property typically already had a lot of money. If you were buying a $100,000 house,
you would have to pay $50,000 and pay off the remaining $50,000 within 5 years.
Increasing the likelihood of default was the fact that mortgages were structured
completely differently than modern mortgages. On a 5 year mortgage, homebuyers
would pay interest-only payments for the 5 year term. At the end of the 5 years, they
would face a balloon payment with the entire principal of the loan.
This system wasnt perfect, but it did provide homes and properties to millions of
Americans. However, once the Great Depression hit, mortgages would never be the
same again. During the Great Depression, lenders had no money to lend of course,
borrowers didnt have any money to pay for the hard-to-find loans either.
The Great Depression and the New Deal
Roosevelts New Deal may have made America what it is today. The New Deal
included a number of important regulations that made America a more consumerfriendly nation. The New Deal was designed to stimulate consumer spending and
promote economic growth. At the same time, the banking and financial industries
would face more scrutiny and regulation.
The Federal Housing Administration (FHA) was created in 1934 and was built to
protect lenders and reduce lending risk. Since lenders had become extremely
cautious about lending since the Great Depression, this was severely hindering
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economic growth. The FHA solved this by protecting lenders and substantially
reducing the risk of a borrower defaulting on a loan.
To do that, the FHA created a number of valuable mortgage services. They created
the 30-year mortgage, for example, and reduced the down payment required on new
home sales. The FHA also created an appraisal system that helped lenders assess the
risk in a certain property. The 8-part appraisal system included indicators like
protection from adverse influences and relative economic stability.
Loans that met the FHAs standards of approval were known as FHA-insured loans.
There were also a number of neighborhoods built across the country known as FHAinsured neighborhoods which facilitated the mortgage process for new homebuyers
and encouraged lending activity.
Ultimately, the FHA created the modern American mortgage by adding the
following systems:
Quality standards: In order to qualify for an FHA-insured loan, a home had to meet
certain quality standards. These standards measured the homes likeliness to hold its
value over time. Homes which were more likely to hold their value were more likely
to receive an FHA-insured loan.
Lowered down payment requirements: The FHA started a program that offered 80%
to 90% loan-to-value (LTV). Private lenders had to offer similar rates in order to
compete. This successfully lowered down payment requirements.
15 year to 30 year loans: A typical mortgage before 1930 only had a 3 to 5 year
period. The FHA began offering 15 year to 30 year loans, stretching out payments
and making it more affordable for medium-income individuals to buy a home.
Amortization periods: Prior to the FHA, mortgages did not have an amortization
period. Instead, mortgages involved paying a series of interest-only payments with
one large balloon payment at the end of the term which was the entire principal of
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the loan. This made defaults a common occurrence and discouraged lending, which
is why the FHA created the idea of amortization. Amortization involves paying off
both interest and principal amounts with each payment.
The FHA continues to exist to this day and play a critical role in the U.S. mortgage
market. It regulates mortgage loan insurance, promotes an efficient home financing
system, and improves housing standards and conditions across the country.
1938 and the creation of Fannie Mae
Fannie Mae is the nickname for the Federal National Mortgage Association
(FNMA). The FNMA was created in 1938 in order to increase the amount of money
available to borrowers using mortgage securitization.
To do that, Fannie Mae purchased FHA-insured loans and then sold those loans as
securities on financial markets. This created the secondary mortgage market and
gave lenders a new source of capital. Since loans were packaged and sold together,
they theoretically carried less risk. Even if a homebuyer defaulted on their loan, it
was unlikely that multiple borrowers in a package would also default.
Thats not all Fannie Mae did; the organization also mandated fair and efficient
lending practices. If lenders didnt meet Fannie Maes guidelines, then their loans
would not be packaged as securities and sold on financial markets. Guidelines
included interest rates, underwriting practices, and other loan terms and suggested
lending practices.
As we all know, mortgage securitization played a critical role in the 2008 recession.
However, in the 1930s, Fannie Mae was praised for creating capital in a capitalstarved country.
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Mortgage market:
There are two types of mortgage market;
1. Primary Market
2. Secondary Market
Primary Market:
The primary mortgage market is the market where borrowers and mortgage
originators come together to negotiate terms and effectuate mortgage
transaction. Mortgage brokers, Mortgage bankers, credit unions and banks are
all part of the primary mortgage market.
Secondary Market:
A secondary mortgage market is the market where mortgage loans and
servicing rights are bought and sold between mortgage originators, Mortgage
aggregators and investors. The secondary mortgage market is extremely large
and liquid.
Players in Primary & Secondary Market:
Primary Market;
Borrower
Lender
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Seller
Broker
Secondary Market:
Ginnie Mae (Government national mortgage Association)
Fannie Mae ( Federal National Mortgage Association)
Freddie Mac (federal home loan mortgage corporation) Private
investors
Channels: The various paths through which a loan can be oriented brought &
sold are: Wholesale & Retailer
Wholesale:
The flow in this channel goes from the borrower to the real estate agent
to the broker connected and finally to the mortgage banker. The only
thing that the borrower does in this channel is filling up in the loan
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application from with all the relevant information along with the
corresponding supporting documents. The broker then submits the
completed loan file to the mortgage banker for underwriting and
funding.
Retailer:
The buyer can deal directly with a specific lender by contracting a loan
officer at loan of thats lenders offices. This channel is called retail
because it involves with the consumer directly.
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Company
Profile
24
Company Name
ENTRA SOLUTION
PRIVATE LIMITED
Company Status
Active
Identification number
U72900DL2014FTC27216
3
Company Category
Mortgage Industry
Class of Company
Private
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Registered Office:
A-1/292, Ground Floor,
JanakPuri, New Delhi-110058
Landline no- 011-4163-4951
Corporate Office:
Plot No-248, Incedo building,
UdyogVihar, Phase-4, Gurgaon122015,Haryana India
Phone No-0124-7900
26
ABOUT ORGANIZATION
History
We were founded as Bank Services, Inc. in Titusville, PA on January 2, 1986.
Initially, we serviced motorcycle leases and automobile loans, and we were a
licensed re possessor of motor vehicles.
State licensing regulations later required that we remove the word Bank from our
name, so we adopted the name BSI Financial Services. In May 1995, we were
approved by Fannie Mae, and in the years that followed BSI Financial purchased
mortgage servicing rights.
In 1996, BSI Financial was purchased by First Commonwealth Financial
Corporation; an auto loan servicing specialist located in Indiana, PA. In 1999, BSI
Financial was sold to Richmond Mutual Bancorporation, at that time a current client
and our banking depository. From 2000 and 2001, the company was approved for
loan servicing in quick succession by the Veterans Administration (VA), Department
of Housing and Urban Development (HUD), and Freddie Mac.
We want to make it easy for clients to do business with us, so we look for
ways to make ourselves more accessible and our processes more streamlined.
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We want our clients to have the highest possible return on their investment.
We accomplish this by ensuring that we comply with all laws and guidelines,
and by being conscious of expenses.
Core Values
At BSI Financial Services, we believe our brand is defined by how well we perform
in support of clients, and that every client contact presents an opportunity to shape
our brand message. Accordingly, we encourage our employees to embody five core
values as they perform their assignments and support you, our valued client:
Always do the right thing. Be transparent. Do not conceal mistakes.
The five values are communicated to every employee through a Brand Handbook
that is maintained on a shared drive. Posters and signage placed in our offices
provide visual reminders of the core values and the desired behaviour. Employees
are also reviewed on a regular basis for how well they support the core values.
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Management Team
Gagan Sharma (President and Chief Executive Officer)
Gagan acquired BSI Financial Services from a bank in 2006. Prior to BSI, Gagan
founded a global outsourcing company serving the financial services and technology
industries. He raised institutional equity financing and increased its labour force to
more than 1,200 people before selling it. Prior to that, Gagan was a consultant with
Deloitte, advising clients on matters of strategy and operations in the financial
services and high tech industries. Gagan has an MBA from The Wharton School at
The University of Pennsylvania and a B Tech from the Indian Institute of
Technology, Delhi.
Jordan
Dorchuck,
(Executive
Vice
President/General
Counsel/Chief
Compliance Officer)
Jordan has earned distinction in a variety of roles related to law and regulatory
compliance for the mortgage industry. One of a few lawyers designated by the
Mortgage Bankers Association as a Certified Mortgage Banker, he is a past chair of
the MBAs Loan Administration Committee and of the American Securitization
Forums Loan Servicing Sub-forum, where he also served on the Board. He was also
a member of the executive committee of the HOPE NOW Alliance. Prior to joining
BSI Financial, Jordan held positions as Executive Vice President and General
Counsel of several mortgage banking companies, including Homeward Residential
and Aurora Loan Services. He also served as Deputy General Counsel of
Countrywide Home Loans where he managed a group of lawyers that advised the
Loan Administration division. Jordan had previously been a corporate partner in the
Wall St. law firm of Mudge, Rose, Guthrie, and Alexander &Ferdon prior to its
dissolution. Jordan clerked for the late Hon. Oliver Seth, C.J. of the U.S. Court of
30
Appeals for the Tenth Circuit, and was graduated from Washington & Lee
University School of Law, cum laude, and from the Wharton School of Business of
the University of Pennsylvania.
John Lawrence, (Executive Vice President, and Chief Servicing Officer)
A 20-year veteran of the mortgage industry, John is responsible for all loan
servicing activities, from loan boarding to loss mitigation. Prior to joining BSI
Financial, John was a Senior Vice President and portfolio manager for PIMCO,
where he managed all aspects of loan trading operations, participated in capital
development and was responsible for operations that supported consumer, student
and auto loan investments. John was also a managing director for Penny Mac, where
he developed a post-closing and servicing platform to host 20,000 loans and was
responsible for Penny Macs capacity planning and budgeting. His experience also
includes key roles at Wells Fargo, Indy Mac Bank and Fremont Investment & Loan.
Akshay Singh, Managing Director for Corporate Strategy and Development
A financial professional with 15 years of experience in private equity, investment
banking and management consulting, Akshay leads corporate growth and business
acquisition initiatives. Prior to joining BSI Financial he was a Principal of North
Cove Partners, a private equity group that was spun out of Merrill Lynch Private
Equity. Akshay has managed private equity investments totalling more than $1
billion in value. He has served on Boards of various public and private companies,
including as a Board Director and member of the Audit and Compensation
committees for Rexel (ENXTPA:RXL) and Euromedic, and as Board Director of
Veninfotel. His background includes assignments with Merrill Lynch and Deloitte
Consulting. Akshay holds a degree in Computer Science from the Indian Institute of
Technology Delhi and an MBA with high honours from The University of Chicago
Booth
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School
of
Business
Science
from
the
University
of
Nebraska.
BSI.
Jill has been with BSI for more than 24 years, overseeing customer service,
accounting, investor reporting, originations, compliance and administration,
servicing QC and management before being promoted to Senior Vice President. In
her current role, Jill is responsible for human resources, corporate training, licensing
and audits. Jill holds a degree in Business Administration from the University of
Pittsburgh.
Julie Zygutis, Senior Vice President, Quality Control and Due Diligence
Julie leads the loan review department for BSI, which includes post origination
quality control and due diligence. Julie has worked with BSI for more than 19 years
in various capacities, including roles as underwriter, auditor, and project manager.
Prior to joining BSI, Julie worked as a manager in the telecommunications industry.
Michael Whitfield, Vice President, and Loan Administration: Mike joined BSI
Financial from Rushmore Loan Management Services, where he was Vice President
of Loan Administration, leading key servicing functions that included payment
processing, audit, tax and insurance tracking, loss drafts and loan boarding. He has
also served as Vice President, Servicer Compliance for 3Point Asset Management,
and Director of Loan Administration for PennyMac. His career track also includes
Assistant Vice President for Customer Service and Loan Administration for Fremont
Investment & Loan.
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Future
Prospectus
34
Future Prospectus
Capable of supporting you in fast-changing times, we apply new technology and
employ an experienced global workforce that is empowered to reinvent the role of
technology, to develop and apply best practices and to adapt our company to how
our clients want to conduct business. We are optimized to manage change, turning
market volatility to our client's competitive advantage.
Our culture promotes values that encourage efficiency, integrity, teamwork,
economy and responsibility; values that we believe translate into superior
performance for our clients who are focused on maximizing ROI and minimizing
risk. These values are ingrained in our daily operations and are the criteria for how
we evaluate and reward our employees.
We believe transparency is an imperative, so we have engineered transparency into
our processing and information technology, our business processes and reporting
methods, and even our company culture. This empowers our clients with visibility
and understanding that is critical for both compliance and investment management.
We say that BSI Financial Services is the new standard for performance. That's
because we hold ourselves to impossibly high expectations for accountability,
efficiency and stewardship. In doing so, we believe we are positioning our clients
for future success and prosperity.
Global Team
BSI Financial Services clients benefit from our offshore team of mortgage
professionals, specially selected and trained to deliver exacting and responsive
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support.
Entra Solutions Pvt. Ltd. is a part of BSI Financial Services and located at Plot 248,
UdhyogVihar, Gurgaun-122015, India.
Entra Solutions operates in a secure, cloud-based environment that allows for
seamless interaction with our on-shore teams and real-time support for BSI
Financials diverse financial and technology operations.
SERVICES
Overview
One of the largest, independent loan services providers, BSI Financial Services has
grown steadily since its inception in 1987. Today we offer services that can be
tailored to meet your individual needs, whether you need loan servicing capabilities,
an independent quality control and loan review provider, due diligence on loan
assets or asset management services. We employ cloud-based technology and
operate with a high degree of transparency, affording you complete visibility and
access to our services.
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We provide Loan Servicing for both performing and non-performing loans that can
be private- labelled or branded using BSI Financial Services. Our clients receive
problem-free loan boarding, personalized service and support, and 100%
compliance with all applicable policies and regulations using business practices and
technology that provide complete transparency. We call this your performance
advantage.
We also offer a complete Loss Mitigation solution that ranges from loan
modification to reinstatement and forbearance, and all liquidation options. You can
order foreclosure management services under a wholly-owned subsidiary, Entra
Default Solutions.
Quality Control services are managed using BSI CARES, a proprietary process
control and reporting platform that enables efficiency, transparency and a range of
reporting options that meet investor guidelines while providing you actionable
information for improving loan quality management.
Our loan Due Diligence service delivers a thorough review of loan assets covering
regulatory compliance, collateral review, all note- and mortgage-related items and
insurance policies. Examined with the experienced eye of an investor, you will
receive a thorough assessment that can include strategies for loss mitigation, as
required.
If you require Asset (REO) Management services, we are a one-stop national
resource capable of handling large or small assignments, including asset reclamation
to sale and closing.
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Loan Servicing
BSI Financial Services provides unparalleled transparency into loan servicing of
performing and non-performing portfolios. Whether from new loan originations,
bulk acquisition in the secondary market or purchases of distressed loans, BSI
Financial will customize a program to fit your needs and be fully compliant with all
applicable regulations.
We call this "Your performance advantage" because we go the distance to make loan
servicing problem-free, fully compliant with all applicable policies and regulations,
and completely transparent, which enables you to focus on managing your
investment portfolio.
A complete, transparent solution
We offer a complete, national servicing solution that complies with current
investor guidelines and government regulations.
Our variable cost service is likely lower than a fixed-cost in-house solution.
You can private-label our servicing or we can brand it as BSI Financial
Services in borrower communication.
38
Escrow administration that provides for account set-up for taxes and
insurance, hazard loss recovery and annual escrow analysis.
Inbound customer service, with inquiry and response by phone, mail and Fax,
delinquency prevention and resolution, all with comprehensive quality
monitoring.
Loss mitigation and collections in accordance with prescribed procedures:
late notice and demand letters, skip tracing, credit bureau reporting, and loss
mitigation options from HAMP to 2MP.
Foreclosure / bankruptcy sample workflow that includes referrals to a
nationwide attorney network, notifications of bankruptcy, Proof of Claim and
Motion for Relief filings, litigation process management, preparation of bid
and sales and eviction monitoring.
REO services that maximize investor return.
Quality Control
Know where you stand when it comes to loan quality
Advanced process control and reporting technology, nearly three decades of
experience in loan management and continuous training in new loan guidelines and
regulations combine to make BSI Financial Services your ideal partner for
managing loan quality. From project initiation to completion, we work closely with
your team in all phases of the loan review process, delivering actionable information
that will help you meet investor guidelines and improve your business practices.
Quality review projects managed using advanced proprietary technology
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All assignments are coordinated through BSI CARES, our proprietary order
management, process control and reporting application.
We provide you details of loans that are eligible for pre- and post-funding
review and work with you to select loans that represent your production or
your portfolio.
We coordinate shipping and receipt of paper or electronic files and establish
review and testing requirements.
We review for credit, documentation, collateral and compliance. Exceptions
are rated using three levels: Trivial, Moderate or Critical and documented in
BSI CARES.
You will receive custom reports generated by BSI CARES that satisfy
guidelines for investor reporting while providing you actionable information
for process remediation. These loan-level exception reports identify defects
and the corresponding severity of each item noted. Special Eligibility
Violation Indicators alert you to quality issues that can affect program
qualification.
Our representatives are available to review with you in detail the findings of
QC reviews.
A fully transparent process guided by advanced, cloud-based technology
Compliant with Fannie Mae, Freddie Mac, FHA and VA pre- and postfunding guidelines.
BSI CARES uses cloud-based technology to ensure the efficiency and
consistency of your loan quality review program.
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45
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CUSTOMER (CLIENT)
BSI
ENTRA
Loan
Escrow
Review
Team
48
Doc.
Management
Business
Investor
Reporting
Reporting
Monitor company licenses to ensure good standing with each licensed state.
Licensing department required to file quarterly and annual reports with each state.
License examinations randomly performed by state regulators - performed onsite
and off-site.
Research all state audit requests - Gather all of the requested documents, company
information and loan level documents to provide to the examiner.
Licensing department monitors our licensed mortgage loan originators (MLOs) Although BSI does not originate loans, required in some states to hold a MLO
license in order to modify terms of mortgage loans.
This licensing requires education courses and state license testing.
Licensed MLOs are required to complete continuing education on an annual basis.
The licensing department schedules and monitors continuing education to ensure
compliance with this requirement.
Investor Reporting
Investor reporting department is responsible for:
Preparing monthly reports for investors showing current status of accounts
Reconciling P&I accounts with investor funds
Invoicing the service fees in QuickBooks
Remitting funds to the investors
Transferring internal loans
Auditing reports
Managing records
Transferring Internal Loans
Investor Reporting is responsible for completing these responsibilities in a
controlled, timely, and accurate manner.
51
Cashiering
Cashiering is responsible for the accurate processing of payments remitted by the
borrowers and/or 3rd party remitter.
Payments may be received in a variety of ways, including
Checks, in-house or via Lockbox
ACH, one-time or recurring weekly, bi-weekly and monthly
Online bill pay Western Union
Cashiering handles reversals of payments including, but not limited to the following
reasons:
Application error
NSF
Stop payment
Mod errors Courtesy adjustments
Cashiering will pull copies of payments when needed.
Cashiering will also assist with the understanding of payment history as needed.
Escrow Cash Control
Escrow Cash Control (ECC) is the cash processing department for the Escrow
department.
ECC is not part of Escrow department.
ECC is under the Cash Management team which includes cashiering and funding
departments.
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Insurance FedEx forms - Forms provided by insurance team along with invoices
when insurance premiums need to be sent FedEx.
All checks that print out are imputed on spreadsheet when printed - except 000
series checks. When these checks are sent out they are recorded for the day they are
mailed and as to how they are mailed (regular mail, priority mail or FedEx).
All payments that are FedEx show in Global Notes with tracking number.
ECC responsible party to check Texas Capital Bank to see if checks have cleared
bank.
If request is sent by any recipient beside the escrow team - request is accepted and
reviewed.
If check comes back not cleared - person requesting information put in correct
corresponding CIT to Escrow department to research if further information is
required.
Only checks that will be voided and reissued without an Escrow member requesting
will be Escrow Payoff Encase checks and Escrow Analysis checks.
These checks are for 1 borrower and do not require documentation be sent out.
Escrow team member requesting information and check has not cleared - request
check have stop pay issued.
ECC void and reissue or replace check to be re-sent when team member provides
documentation.
ECC processes all Global and REO disbursements for Escrow team.
Escrow team sends spreadsheet of checks payable to and the correct amounts.
ECC team member process - once processed check information sent back to escrow
team member.
Escrow Tax
Another role of servicing is the management of escrow accounts.
Before 1934, borrowers paid their own taxes and property insurance. Lenders were
often unaware of unpaid bills until taxes became delinquent or insurance coverage
was cancelled.
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A new feature of an FHA loan was the creation of an escrow account (the practice of
collecting a portion of insurance and taxes as part of the monthly mortgage
payment).
Escrow
What is Escrow?
Escrow is money collected from a borrower by a servicer that is held in a trust
account and used to pay taxes, insurance, or other bills.
The purpose of escrow is to protect the lender against the financial consequences of
a borrower not paying taxes, insurance, or certain other charges.
Those responsible for managing escrows perform several functions:
Paying taxes and insurance
Conducting escrow analysis to determine whether enough funds are collected for
taxes, insurance and other bills when due.
Paying mortgage insurance payments.
Escrow reduces risk, enabling the lender to make loans to borrowers who would not
qualify otherwise.
Establish the amount of escrow payments.
This is a critical function because real estate taxes and insurance premiums change
from time to time. Once a year, the escrow department examines escrow accounts to
determine if the current monthly deposits will provide sufficient funds to pay taxes,
insurance, and other bills when due. Based on its analysis of anticipated
disbursements and current payments, the escrow department adjusts required escrow
payments accordingly.
Prepare annual escrow account statements.
At the end of each calendar year, the servicer prepares an annual statement advising
borrowers of payments to and disbursements from the escrow account.
Borrowers use this information to prepare income tax returns.
Escrow Insurance
The three major components of an escrow account are as follows:
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MERS Specialist maintains information that controls system access and security includes reviewing BSIs list of contacts at least monthly, assigning MERS System
User IDs and updating user access.
Monthly, members review Corporate Resolution and attached list of Signing
Officers to ensure that it is current and accurate.
Quarterly, members complete Quarterly Attestation for each Org ID and SAA
Relationship they manage in CRMS.
Members that utilize third-party vendors (each an "SAA Vendor"), for the purpose
of executing documents such as assignments and lien releases, request Signing
Authority Agreement ("SAA") so signing authority be granted by MERS to the SAA
Vendor.
SAA Vendor authorizes certain employees to act in the name of MERS in relation to
loans registered to the Member on the MERS System. BSI currently has an SAA
with Orion. MERS - Periodic Reviews
MERSCORP Holdings conducts Quality Assurance (QA) reviews to audit
compliance with MERS System QA Standards specified in Procedures and Rules
and monitor effectiveness and accuracy of Members training, tools, and procedures.
QA reviews may include mortgage documents related to Members MERS Loans
and data on Members System of Record related to loans.
MERS - Periodic Reviews
MERSCORP Holdings performs types of QA reviews:
Data Review: System-to-system comparison of active MIN data from MERS
System and Members System of Record that verifies required and conditional data
listed on MERS System, including loan status and Rights holders, match
Members system of record. Member selected for Data Review because current
Servicer for MERS Loans. Note: Members System of Record is source of data for
MERS System.
Document Review: Member selected for Document Review based upon size
portfolio of serviced MERS Loans or for adverse reasons. Document Review
evaluates Members compliance with MERS System requirements concerning
actions taken in name of MERS and corresponding transactions performed on
MERS System. During Document Review, MERSCORP Holdings selects random
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sample of Members MERS Loans and requests documentation based upon loans
status in MERS System.
Compliance Review: MERSCORP Holdings conduct Compliance Review, include
on-site visit, review Members MERS System operations and discuss process
improvement opportunities. Compliance Review due to high number mismatches
from Member. Review covers Members MERS System operations.
Quality Assurance Profile: MERSCORP Holdings issue Quarterly Quality
Assurance Profile (QQAP) requires Members response within 30 days. Members
selected for QQAP based on regulatory requirements. QQAP response includes
details about total number MINs in Members most recent reconciliation, mismatch
percentages as compared to MERS System, and total MIN status mismatches.
Special Loan Services
System adjustments and research on any loans past 30 days from the boarding date,
through requests submitted via CIT/Ticket
Updating the Indices daily
Running reports (Monthly, Weekly, Daily, and as requested)
Running scripts (By Requests)
Completing BSI Cares findings
Making SOL (Statute of Limitations) adjustments
Mod Reversals
Collections
Notify borrower when payments are past due
Collections calls are made to borrowers who are delinquent from the 1st 59th day
Variations per client direction
Calls not made before 1st day or after 60th day
Calls made to borrower using Five 9 auto dealer system to collect past due funds in
efforts to bring account current
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Default Operations
The Making Home Affordable Program (MHA) is a strategy initiated by the Obama
Administration whose intention is to help homeowners avoid foreclosure, stabilize
the housing market and improve the nations economy. The Making Home
Affordable program has four programs in relation to servicing:
Home Affordable Modification Program (HAMP)
Home Affordable Unemployment Program (HAUP)
Home Affordable Foreclosure Alternatives (HAFA)
2nd Modification Program (2MP)
HAMP is a modification program that is aimed to assist homeowners who are
having difficulty making their mortgage payments. The payment reduction is
achieved by reducing the interest rate, extending the loan, deferring a portion of the
principal balance, and/or a combination of a few or all of those components.
HAUP is a forbearance program that assists unemployed homeowners struggling to
keep up with their mortgage payments. With this program, mortgage payments are
either reduced to 31% of the homeowners income or suspended altogether for 12
months or more.
HAFA is a foreclosure alternative option that allows homeowners to gracefully exit
their properties by either a short sale or deed-in-lieu. In addition, the homeowner
may be entitled to up to $3,000 relocation assistance.
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2MP is a program for homeowners whose first mortgage was modified under
HAMP. The second liens payment is also made affordable by reducing the interest
rate, extending the loan, deferring or forgiving a portion of the principal balance
and/or a combination of a few or all of those components.
Customer Care
Customer Care is the face and personality of BSI. We are responsible for quality
Customer Service at all times.
High Importance is placed on being able to answer the majority of all calls with the
borrower on the first contact.
Extensive training at the beginning of the agents time with BSI and throughout their
employment is a high importance as well.
Multiple systems used including system of record Fiserv, phone system Five9 and
other internal systems to document, speak with and store information regarding the
borrowers and their loans we service.
Property Preservation
BSI provides property inspections, preservation work and property registration for
clients using multiple vendors
Utilizes vendors to provide property inspections, preservation and registration to
stay in compliance with federal, state and local laws and regulations
Intent is to take action to preserve asset and perform regular maintenance to
minimize exposure due to lack of maintenance on secured property.
Preservation Services provided:
Property Inspections
Property Preservation services pre REO Property Registration Services
Adhere to Investor Guidelines when performing services
Provide clients with quality results while keeping Investor costs to a minimum
Utilizes services provided by approved /vetted vendors to provide property
inspection, preservation and registration services in compliance with federal, state
and local laws and regulations.
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of
property
inspections
loaded
to
Business
Reporting
(Y)
Loss
Mitigation/Property Inspections
Property Preservation reviews, orders assigned to appropriate Preservation vendor
via the SFTP site/User/vendor Name:
IMS- Primary Vendor handles most Inspection Order - https://www.imstoday.net
Homestar- Secondary Vendor
http://homestar.portfoliotrax.com
Inspection turn time 15 days from date of order ex: If orders on the 15th of the
month, results are to be returned not later than 30th of the monthType of inspection based on status of loan in Fiserv
1- Occupancy Inspection
2- Drive by Inspection (loans in Bankruptcy or in Litigation)
Property Preservation Occupancy Inspection
Exterior Visual Inspection of Property to determine occupancy. Typically verified
via following: Utilities on/off
Yard Maintained
Personals present
Furniture present
Pets/animals present
Noise can be heard
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Property Preservation
INSPECTION Results
Each state was given the chance to develop programs that would best assist their
residents based on the amount of funds the treasury provided. Hardest Hit Funds
Department How it works!
A borrower in need of assistance first has to reach out to their state, the state reviews
their specific situation and evaluates whether they could qualify based on the states
specific guidelines.
If a borrower is deemed conditionally approved by the state, they contact the HHF
department with the HHF version of a Hardship application (i.e. I file).
This application includes basic borrower information used to identify the loan as
well as the program they are applying for and potential assistance amount.
Hardest Hit Funds Department Whats next?
Once the application is received from the state, the HHF agent forwards the
information to the Loss Mitigation agent.
The Loss Mitigation agent then informs the investor as to what the state is offering.
Either the investor agrees to accept the states proposal and allow the application to
continue or they deny assistance (dependent on each borrowers situation).
If the investor agrees - HHF agent completes the application (similar to a
Verification of Mortgage) and sends back to the state for further review.
If the investor denies assistance - HHF agent notifies the state and the file is closed.
HHF Department If the Investor Approves
The state reviews information provided by BSI and makes a final determination.
If the STATE approves, a funding date is scheduled and the account is brought
current (can be a reinstatement, recast or Modification).
All assistance that is used to bring a borrower current is recorded as a subordinate
lien on the property.
HHF funds do not have to be paid back to the individual states unless the borrower
sells the property, moves out, or the property goes to foreclosure sale how much is
paid back depends on each situation.
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Bankruptcy
Bankruptcy is a process in which consumers and businesses can eliminate or repay
some or all of their debts under the protection of the federal bankruptcy court. For
the most part, Bankruptcies can be divided into two types:
Liquidation & Reorganization
Among the different types of bankruptcies, Chapter 7 and Chapter 13 proceedings
are the most common for individuals and businesses.
Bankruptcy Chapter 7
Chapter 7 bankruptcies normally fall in the liquidation category. This means that if
you own property, it could be taken and sold in the process of liquidation in order to
pay back your debts. Chapter 7 proceedings typically last between 3 6 months.
The debtor has to make a choice between:
Allowing the creditor to repossess the property that secures the debt
Continuing to make payments on their debt to the creditor Paying the creditor a
sum equal to the replacement value of the property that secures the debt
Some types of secured debts can be wiped out during a Chapter 7 bankruptcy
proceeding.
Secured claims such as mortgage liens remain on the debtors property; however
after the discharge the debtor is no longer personally liable to pay the debt.
Creditors only recourse is to foreclose against the secured property following
bankruptcy.
Bankruptcy Chapter 11
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Bankruptcy Chapter 13
Chapter 13 bankruptcies generally fall under the reorganization category
Meaning the borrower may be able to keep their property, but they must submit and
stick to a plan that will allow them to repay some or all of the debt within three to
five years.
Bankruptcy
Bankruptcy rep receives notification that the Borrower has filed Bankruptcy
From the court
Through the mail
From the Borrowers attorney
Directly from the Borrower Or, through the Lundquist scrub
For some of BSI Financial Services clients/investors, BSI sends loans to Lundquist
Consulting, Inc. to scrub for Bankruptcy filing, initially upon loan boarding and
monthly, thereafter.
Foreclosure
When attempts to work with the borrower fail and the loan is not reinstated the loan
is referred to an attorney to begin Foreclosure. This is done as a last resort to protect
the lenders investment.
Significant changes in asset management strategies have been made in recent years.
Because of the recent financial crisis, subsequent unemployment, and economic
conditions, servicers assist distressed borrowers in danger of losing their homes.
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delegated authority matrix. Once a deal is agreed to, the REO department oversees
the final stages of title curative as escrow (closing) is opened and the closing
process is proceeded with until close of escrow and the sellers wire is received.
Throughout each phase of the REO process some of which overlap with one
another it is the REO departments responsibility to ensure that the clients liability
is protected and their public image is not impacted negatively. It is critical that all
costs allocated to the management of each asset are met with their due diligence and
spent in good faith on behalf of the client.
Quality Control
A strong quality control program for mortgage servicing is critical to ensure that
required policies and procedures are being followed and that problems can be found
and corrected before costly penalties are incurred.
Quality control functions work to ensure that the quality of loan servicing is within
investor, regulator, secondary market agency, and applicable state and local
requirements.
The Servicing Quality Control departments responsibilities encompass all areas of
operation within BSI, e.g. HAMP, Foreclosure, Bankruptcy, Escrow, Call
Monitoring, and other areas where potential risk can be identified.
Loans that are not serviced properly can be costly.
Improperly serviced loans may have to be repurchased or significant monetary
penalties paid because of a variety of errors or other problems, such as late payment
of real estate taxes and noncompliance with investor requirements and regulatory
guidelines.
Our internal quality control department is charged with reviewing the servicing
operation on a continuous basis, utilizing a variety of techniques and programs.
One technique is by utilizing a checklist and extracting data from Fiserv into BSI
CARES to make loan selection for review.
Call Monitoring DOs
State the mini-miranda and call recording disclosure
Verify the borrower
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Vendor Management
Due Diligence for potential vendors
Gain appropriate approvals
Obtain and evaluate information provided from vendors Contracts
Obtain contracts prior to signing up new vendor
Monitor contract status after signed Document storage and updates
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Docunym
Sales Force
Reconciliations
The Reconciliation team is responsible for balancing the custodial cash flow of BSI
and maintaining records that tie it to the balances of the loans on our system. This is
done by using various system reports, excel records and bank statements.
Essentially, the activity of every other department within BSI can have an impact on
the in-flow and out-flow of cash and loan balances, it is the duty of the
Reconciliation team to make sure it is accurate and accounted for.
Daily the Reconciliation team reviews teller cash activity posted by Cashiering,
Escrow, Conversions and outside clients. They confirm that all of the teller activity
flows to the proper custodial and clearing accounts via our automated funds
movement and address any exceptions as they happen.
Monthly they process formal reconciliations for P&I (Principal and Interest), T&I
(Taxes and Insurance), Disbursement and Clearing accounts to ensure that cash is
flowing properly.
Complaint Resolution What does CRU do?
Reviews and responds to Qualified Written Requests (QWRS) per the Consumer
Financial Protection Bureau (CFPB) Guidelines
Includes
Notices
of
Error and
Requests
for Information
Maintains and uses tracking systems for each QWR BSI receives
Does not take phone calls
Complaint Resolution Tracking in Fiserv Active Inactive
CRU Response Timeframes Acknowledgement = 5 Business Days
Pay-Off Request = 7 Calendar Days
Owner of Note Request = 10 Calendar Days
General QWRs = 30 Business Days
CFPB = 15 Calendar Days
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Post-Boarding
Generate following letters day after Loan Boarding. If this cannot be successfully
completed, notify Conversions Manager of reason and potential compliance impact:
Welcome Letters/Notice of Transfer* *Note: Pursuant to 12 CFR 1024.33
(Regulation X) requires that the transferor servicer shall deliver the Notice of
Transfer to the borrower not less than 15 days before the effective date of the
transfer of the servicing of the mortgage servicing loan; The transferee servicer shall
deliver the Notice of Transfer to the borrower not more than 15 days after the
effective date of the transfer; and the transferor and transferee servicers may
combine their notices into one notice, which shall be delivered to the borrower not
less than 15 days before the effective date of the transfer of the servicing of the
mortgage servicing loan.
Debt Validation Letters (Mail within 30 Days of effective transfer date)
Privacy Notice
Review and confirm accuracy of Letters
Forward both Letters to Print Vendor to print and mail to Borrowers
Conduct follow up to confirm loans moving through MERS have had batch
Conversions Loan Boarding Overview
Loan Boarding is a process by which prior servicer transfers servicing of loans from
their system to another servicers system
Done through a series of steps that includes obtaining preliminary data from prior
servicer, 30 days prior to the actual transfer of loans
Ensure all information required and requested is available, scrub data for gaps and
inconsistencies and use specifically tailored testing protocols to evaluate
compatibility of transferred data with transferee servicers system verify transfer
of loans successful, by boarding Prelim Data in Test Region in Fiserv.
Conversions Policy
Policy of BSI Financial Services
Make every effort to obtain most up-to-date and accurate data/documentation from
previous servicer to ensure smooth transfer of loans to BSIs system and to flag all
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loans with pending Loss Mitigation applications (complete and incomplete), as well
as approved loss mitigation plans (including trial modification plans) to ensure that
systems can process loss mitigation data upon transfer
Conversions Procedures
Review incoming transfer data and verify needed files received
Create / update mapping documents for incoming transfer
Route transfer to correct automation teams
ESPL for transfer that involve pulling data from documents
Axtria completes all other transfers
Review spreadsheet provided by India team for completeness
Run script to input data onto the Fiserv system
Review reports day after boarding to insure data correctly added to system
Conversions Questions
Where can a detail list of incoming transfers be found?
Why are transfers scheduled so far in advanced?
Do all prior servicers send the same data?
How much and what kind of information is boarded into Fiserv?
How long does it take to board loans?
What if the Data does not match the documents?
Conversions Phase II
Overview
BSI will validate data specific to special loan product using final data, upload
verification and documents
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Policy
Post boarding, special loan boarding team review 100% of all special products and
10% of fixed rate loans to ensure data accuracy
Special products include ARMs, interest only, option ARMs, balloons, SCRA, DSI,
HELOCs and ARM/step modifications
ESPL review all loans for additional borrowers
Conversions Phase II
Procedures
Transfer Deal recorded in Phase II Tracker from Master Status Report
Upload Verification Report generated and downloaded in Transfer Folder
Special Loan Boarding Team filters 100% of Special loans (ARM/ Option ARM,
Buy down/SCRA, HELOC/HELOAN, DSI, Balloons, and Interest only) and 10% of
random selected fixed loans from transferring population
Team identifies loan terms, characteristics and criteria for selected portfolio from
data boarded in Fiserv
Qualifying data elements verified with Loan Document Images received from
Previous Servicers
De-Conversion
Loan Transfer Overview
Receive notification from the current investor
Contact new servicer to obtain transfer instructions for RESPA letter and transfer
information - RESPA stands for Real Estate Settlement Procedures Act used to
notify borrower of servicing transfer by law
Send RESPA letter for approval - transfer date 15 days from date letter sent
Once RESPA letter approved, send to Triangle to be mailed
Triangle is BSIs mailing distributor
Generate preliminary data and send to new servicer
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Rocket Shuttle used to generate reports. Need loan numbers to be able to generate
the 15 reports to new servicer. Send new servicer a code breaker excel spreadsheet explains what each type of report is and what fields mean
Send notification email to all branches at BSI and to tax/insurance vendor Tax
vendor Lereta
Insurance vendor - SWBC
Set number of loans in transfer to release with contract ID and number on Fiserv
system
Create ID and Contract number by setting it up
Update master status report on Google Docs with information for transfer - Master
status is document that keeps records of transfer
On the day of the transfer date - generate reports again and send to new servicer
Two days after the transfer date - generate pay history/collection comments and
send to new servicer. Pay history and collection comments are reports that show
servicer why principal balance was reduced and collection comments are messages
Update master status report on Google Docs with final information
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Entra Solution Pvt. Ltd. is a mortgage service industry a Unit of BSI Financial
services Company which is Located in US. The working of Entra Solution is to
review or service the loan with the order of customer (client). Entra operates the
loan cycle service with help of five departments. The Department are:(1)
(2)
(3)
(4)
(5)
Loan Review
Escrow Team
Doc. Management
Business Reporting
Investor Reporting
Roles & Responsibilities given to me in the dept. in loan review & doc.
Management are as follows:
LEARNINGS
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RECOMNDATIONS
ENTRA should hire more experience employees who has more knowledge
about the mortgage industry.
ENTRA will adopt different strategy to overcome with his competitor of
mortgage industry.
It should be cleared within a target date deal can be completed for make a
good relationship with our patronage partner.
In the Entra employees Salary have low comparison to US employee thats a
reason client should give the more work and trust to our quality service.
Entra create a monthly basis Rewards and Recognition Session for our
employees give motivation and appreciate towards work.
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CONCLUSION
The study at Entra gave a vast learning experience to me and has helped to enhance
my knowledge. During the study I learnt how the loan origination aspects are used
in practise during the operations of loan servicing industry assessment. I have
realized during my project that a mortgage associate must own multi-disciplinary
talents like financials, technical as well as legal know-how.
In the loan review process department works should be divided into
Five parts:
1. Loan Review
2. Log Audit
3. Audit Report
4. Credit Report
5. Appraisals
To ensure that I have to know about the credit report, audit sampling
and loan origination process and knowledge about
working as well as environment.
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the corporate
BIBLIOGRAPHY
1. WWW.BSI/ENTRA FINANCIAL SERVICES.ORG
2. ENTRA SOLUTION ANNUAL BROCHURE
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