Midland Pioneers Shared Servicing for Commercial Portfolios.(Midland Loan Services)

Midland Loan Services, based here, is at the forefront of a subservicing niche that it is labeling "shared servicing."

Stacey Berger, executive vice president of the Overland Park, Kan.-based company, recounted that Midland identified this niche as a possible area for growth back in 1998.

At that time, Midland saw that life insurance companies and portfolio lenders presented opportunities for Midland to expand its servicing business. Life insurance companies were seeing their business altered because of the growth of the CMBS market, as well as through the "demutualization" of these companies.

Midland realized that while it was essential for these companies to maintain their relationships with borrowers, in the case of their portfolio loans, there were also opportunities for them to outsource the servicing of their loan portfolios.

Mr. Berger noted, "We concluded that there was an opportunity to deconstruct the (servicing) process."

This would be done by disseminating the various aspects of the servicing functions between the different parties involved, with the Internet serving as a facilitator.

Thus, in a shared servicing situation, the lender performs certain functions, while Midland performs certain other functions, in real time. For instance, clients have the option of outsourcing processing and administrative activities, while retaining ...