Doing more with less is every business’ goal, especially with limited resources in today’s economy. However, sometimes companies wind up doing less with less. And what’s worse is when they find themselves doing less with more.
Amid ongoing struggles with inflation and staff shortages, banks and credit unions’ loan departments can’t afford to do less when it comes to escrow property tax services. However, for some, less is what they are getting when managing escrow taxes—regardless of how hard their loan department staff are working.
Banks and credit unions face unprecedented challenges in servicing their loan customers’ escrowed property tax accounts, thanks to a combination of understaffed departments, record-setting loan volumes, and municipalities that are bogged down due to the shutdowns of the last few years.
Continued Hot Housing Market Increases Escrow Property Tax Service Work
As mortgage rates continue to climb above 4%, with more hikes to battle inflation expected, buyers are rushing to get into new homes before being priced out.
Many of the new loans being written for these home sales are coming with less than 20% down, leading to even more of them requiring escrow.
Earlier this year, during an Info-Pro Lender Services Educational Webinar, Mark Daniels, SVP of Sales, Marketing, Account Management & Client Services at Info-Pro, told attendees that the company had seen a 40% higher rate of loans that require escrow over the past five years. He added that he expected that to continue due to lower down payments and more government-backed loans.
To help manage the avalanche of property tax escrows from new and existing mortgages, some have turned to outsourcing these services. By modernizing and automating them, they are seeing a reduced drain on staff. This shift allows them to increase productivity and focus on servicing customers and members while growing the overall business.
In a recently published case study, long-time Info-Pro partner Cornerstone Community Bank explained why they have relied on outsourced property tax escrow services for 15 years.
“We knew we had to be more efficient with our tax disbursements and analysis,” said Christie Gutknecht, Vice President of Loan Operations at Cornerstone Community Bank, in the case study. “Our core processor, UFS, introduced us to Info-Pro, and our tax servicing has become much more efficient and less stressful. With the Premium Escrow level service, we streamlined our processes for paying escrows. It saved a lot of time and frustration!”
Finding the Right Vendor for Outsourced Property Tax Escrow Services
Of course, choosing the best vendor to work with for escrow tax services can be just as challenging and time-consuming as handling escrow payments and property tax delinquencies themselves.
It is essential to do due diligence and find a vendor that provides more than technology and automation. You need an escrow tax outsourcing vendor who will work with your organization and provide the personalized service you need—from the initial call through the continued growth of your property escrow tax service.
You want to look for a third-party vendor who will:
- Provide access to a tax agency database and escrow management tool
- Offer solutions that assist the institution by providing the level of service needed to ensure that escrow taxes are paid on time and accurately
- Deliver customizable reports electronically and on-demand
Regardless of outside economic influences, monitoring and paying property escrow taxes will always come with challenges for banks and credit unions. However, working smarter will always trump working harder, allowing your loan department staff to focus on things that help the institution grow rather than monitoring and chasing down escrow tax information and delinquencies.
If you’re considering outsourcing your escrow tax services, download our buyer’s guide to learn what to look for in a vendor to make the most of your outsourcing investment.