One of the most prominent trends for much of the past decade has been the transition of lenders scaling back to just ‘stick to their core competencies,’ which are:
- Seeking consumers with financial needs
- Developing products
- Underwriting and funding loans
- Navigating legal, regulatory, and compliance frameworks
- Servicing portfolios of loans
This skinny-down trend has steadily dismantled prior decades of the seismic sized scope-creep pursued by lenders, especially the big ones, trying to do absolutely everything in-house. It’s not our place to judge how well that worked, although the industry-wide retreat from those days likely tells the tale.
Today, almost every internal department and function can be up for consideration for outsourcing, even underwriting. Some of the areas that often loom large in such evaluations are loan servicing, IT, operations, and appraisal management. Being an AMC, we shall focus on the dynamics in play that generally cause lenders to outsource to AMCs.