An adverse action notice is a document sent to a loan applicant stating a bank’s rationale for denying a loan. It may also contain a counteroffer, such as a lesser amount or a request for an approved co-borrower.
An authorized signer form is a document that allows an account holder to grant a range of clearance levels to individuals to perform certain functions within a bank account.

A loan servicing specialist manages elements of consumer or commercial loans from the time immediately after consummation through pay-off. Some financial institutions retain loan servicing in-house, while others sell this off to a third party.

Initial Loan Servicing Tasks

Immediately after a loan is consummated and booked to the core, the duties of loan servicing specialists (sometimes referred to as loan administration assistants) begin. Depending on the bank or credit union’s processes, all the documents in the loan file will be reviewed for missing signatures or initials and notate any other custom exceptions. Then, all paper documents in the loan file are scanned and digitally organized. Loan servicing specialists also set expiration dates for tracking recurring items, such as insurance and UCC filings, and confirm that collateral is perfected.

Ongoing Loan Servicing Specialist Activities

Once a loan has been processed, the financial institution relies heavily on loan servicing specialists to monitor the account. Some of their responsibilities in this stage can include:

  • Paying property taxes on escrowed accounts
  • Issuing past-due and cure letters
  • Analyzing escrow to notify customers of shortages or overages
  • Managing escrow rate changes and sending notification letters
  • Collecting payments
  • Processing paid loans, which entails releasing collateral, contacting the account holder’s insurance company to inform that the lien has been removed, and (in the case of an auto loan) sending a title to the borrower

Checks and Balances

Loan servicing specialists work in tandem with lenders to resolve and clear exception reports; this serves to ensure compliance and minimize risk. Typically, the loan servicing department produces exception reports, and then the lender contacts the borrower to resolve any issues. Additionally, the loan servicing department directly receives documents, such as recorded deeds of trust and insurance policies. Depending on the financial institution’s document management system’s capabilities, scanning these into the system could automatically clear the exception and remove that item from the lender’s exception report.

Resources for Loan Servicing Specialists

Looking for more information for or about loan servicing specialists? Be sure to check out our extensive resource library with free spreadsheets, whitepapers, videos and eBooks.

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Exception Tracking Cost Calculator

Exception tracking has many moving parts—from notice generation to recordkeeping and reporting. How much does it cost your financial institution each year? Find out with Alogent’s free calculator.
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