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Mortgage Lenders Identify Top Challenges in Managing Escrow Tax Payments
April 29, 2025
Published in MortgageOrb
By Patrick Barnard – April 29, 2025
Mortgage lenders identified rising costs (39.8%), staffing limitations (11.7%), regulatory compliance (29.1%), and inefficient processes (21.4%) as major hurdles in managing escrow-related payments for property taxes in a survey recently conducted by Autoagent, which offers an escrow tax and government payment processing platform.
Over half of the 2,500 mortgage industry executives polled expressed frustration with subservicers acting as middlemen rather than directly handling transactions with agencies.
The online survey, carried out in March 2025, aimed to gauge the challenges faced by mortgage lenders in managing escrow tax payments and their interactions with subservicers in the process.
Approximately 40.8% of respondents indicated that escrow management accounts for 21%-30% of their overall operational costs.
In addition, 59.2% of respondents say federal regulations were having a very significant impact on operational costs.
The survey reveals that a majority of organizations manage property tax payments through a combination of in-house teams and third-party vendors (40.2%).
Respondents identified key features in escrow management platforms including user-friendly interfaces (26.2%), real-time data access and reporting (19.4%), scalability (21.4%), integration with existing systems (18.5%), and vendor support and training (20.4%).
“The results of this survey highlight the critical challenges mortgage lenders face in managing escrow tax payments,” says Steven Pals, director of business development at Autoagent, in a release. “It underscores the need for a more direct relationship with the servicing process to enhance efficiency and reduce costs. Direct servicing not only helps lenders reduce costs and maintain control but also positions them to respond swiftly to changing market dynamics.”
Photo: Towfiqu Barbhuiya
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