Cenlar is a loan subservicing firm that handles administrative, financial and legal matters for mortgage lenders and banks, according to the company's website. Although Cenlar handles these tasks, all communication, correspondence or paperwork with borrowers continues to use the mortgage lender's name and logo. Cenlar also provides the lender with comprehensive reporting on issues such as call statistics, turn-around time on customer requests and overall performance.
Loan subservicing is an arrangement between a mortgage lender or bank and a third-party company, such as Cenlar, to handle tasks such as processing mortgage payments, managing escrow accounts and handling collections and foreclosures on delinquent customers, explains SF Gate. The subservicing firm also handles customer service and makes insurance and tax payments for customers with escrow accounts.
This arrangement gives the mortgage lender the financial benefits of originating loans while saving money and time on the actual management of the loan, says Cenlar. The firm has the necessary resources, infrastructure and staff to handle these tasks efficiently, relieving the mortgage lender of the need to update its current system or hire more help. Cenlar also keeps track of loan regulations and ensures that the lender remains in compliance with the law, reducing the risk of fines or other regulatory penalties.